Cash Back Christmas, 2015 Edition

It was a close one this year but we managed to carry on our tradition of covering our holiday expenses with cash back from our rewards credit cards.  Last year we got a boost from the $450 sign up bonus from our Chase Sapphire Preferred card (which was closed before the annual fee was due this year) and while we did open a new card earlier in the year (Capital One Venture) and get a bonus, it was mileage used towards the 5 incredibly expensive airline tickets we purchased for our Thanksgiving trip in November, 3 of which we were thankfully able to pay with mileage/rewards.

Because of the trip and things on the horizon, we did cut back some this year on both our gift and food budgets but still had a blast and somehow our living room still looked like a toy bomb went off despite the reduced budget.

The final tally for Christmas 2015:

Source	Amount
AMEX	$530
Discover	$235
Ebates	$64
Total	$829

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Meat

I'll start off by saying that if you're a vegetarian this post is probably not worth your time, no guarantees for the rest of you either for that matter.  This was the scene in our fridge at the beginning of this month, a carnivore's dream fueled by cost effective monthly(ish) meal planning and some shopping/an impromptu workout.  Beef (ground, in tube form), check.  Chicken, check. Pork (chops), check.  Steaks are a treat that we slip in on occasion but it wasn't in the cards this month after an expensive November and Christmas on the horizon.

At one point we did actually plan out our meals for a month but now with enough regular staples under our belt we have a good idea of what we need to sustain us for ~4wks and can put together a shopping list without a detailed meal plan.  We have also done our research as to the most cost effective locations to purchase various food items, Sam's club being the best choice for all things animal protein.  The prep takes a little time but we've found is well worth the saved time/effort throughout the month, especially during busy weeks.  Beef is sectioned and bagged in 1lb increments and chicken trimmed and bagged ~3-4 breasts per which is how much we typically cook for a meal/leftovers for lunch.

The 10lb tube 'o 90/10 ground beef and pork chops will last more than a month since chicken is typically our go-to but for the sake of simplicity here's the cost rollup (in nice rounded numbers) for an average month at today's market prices for our family of 5:

Chicken:  1.97/lb x 25lbs = $50 (~14 meals)
Beef: 3.18/lb x 10lbs = $32 (~5 meals)
Pork chops: 2.98/lb x 6lbs = $18 (~5 meals)
Total: $100 (~24 meals)

A couple notes:
-# of meals assumes  ~6oz per serving per person, an average that works well for us as our 3yr olds are balanced out by a hungry 15yr old
-This leaves 5-6 days for the occasional pizza, sandwiches, and a meal or two out

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Coffee

Took a little longer than planned to throw this together but I'll start off the money saving posts with one of my favorite substances on this earth, coffee.  I feel slightly hypocritical for writing this while sitting in a starbucks sipping an americano but it's too cold outside to sit at the baseball field during practice and they've got free wifi here so what the heck...

I've never been an every morning Starbucks drinker but was guilty in one stage of life of paying a visit to the lady in green several times a week after calorie and MSG filled lunches with co-workers which definitely added up over the course of a month.  This coupled with my mail order gourmet coffee bean habit for my morning fix added up to just shy of $60/mo or $720/year which is a chunk of change, if you're a 5 morning a week $4 latte drinker you could be spending close to $1000 a year on coffee.  I love my java but not that much.

Going out to lunch less as I mentioned here not only helped the food budget but also led to fewer caffeine stops and more free coffee from the breakroom at work.  I also started buying my beans in bulk from Sam's Club where a 2.5lb of (Fair Trade) French Roast can be procured for ~$15.  BAM,  $40 back in the monthly budget or almost $7000 if that monthly amount was invested over the course of 10 years.  Pretty crazy that a minor modification like that could lead to enough money saved to cover a whole semester of college for one of our kids.

If convenience is key, k-cups can be found at your local warehouse club or on Amazon (search San Francisco Bay Coffee, great and the cups are biodegradable!) for ~$.40 each.  Factor in $100 for a Keurig machine and you're making your morning java for 1/10 the cost of a cup at the coffee joint, paying the Keurig off in less than 30 days as well as saving yourself time standing in line (or time AND gas sitting in the drive-thru).  If Espresso is your thing, a nice machine that's just about automatic can be found for several hundred dollars which might take more like 4-6 months to hit payoff but after that you'll be the happiest barista in the world saving cash while making a myriad of fancy coffee drinks.

As I divulged above, I still enjoy a cup of strong coffee made by someone else from time to time and in fact had 7 or 8 over the course of the 2 week vacation we just returned from which I will consider savoring the sweet taste of budget victory since it was changes like this that gave us the ability to actually take that vacation!

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Nuts and bolts

With the newly announced coming of our 4th child there has been quite a bit of discussion and planning going on in the Simon household.  From real estate planning inside our house to budget analysis with another mouth to feed on the way, we've been re-looking at our budget and some of the things we leveraged in the past to make ends meet.

That said, during one of our conversations over the weekend we came to the conclusion that this would be the perfect time to pick things back up with the blog and share our findings, both old and new, in the hopes that the info may help others get and keep their financial house in order.  This will obviously be a chronicle of our own personal journey of supporting a family of 6 on a single income and there are a ton of sites out there with great information so I'd definitely encourage some google searching and poking around on savings blogs as well.  

We have a few ideas in work and plan to make some shorter posts as we pull info together, in the meantime a summary of where our initial changes landed can be found here and a list of posts on the topic of Financial Responsibility here.

Stay Tuned!

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Down and to the right!

Certainly not the trend you want to see in your investments, but after some recent tinkering in my budget spreadsheet I was pretty happy to see (in graphical form) the impact of the spending changes we've been making.  As I briefly mentioned here we've shaved about $2000 from our monthly budget since 2011 with the heat turned up over the past 2 years after going to a single income with 3 kids in tow.  Some of the $2k was related to commuting expenses for the Mrs and some to other things not 100% applicable to everyone so I'll focus this post on the $1200 or so that is most relevant to the outside world.

I started poking around on Financial Independence blogs about a year ago after hearing about Mr Money Mustache and while I don't plan to retire at 40 (although that does sound pretty fantastic), the principles and practices put forth on FI sites are beneficial to anyone regardless of what their financial goals are.  There are tons of sites out there with tips on how to save but what I like about Mr Money Mustache's philosophy is it's focused around contentment stemming from a mindset change that helps you realize that any dollar not spent can be put to work for future you thus increasing your margin and in his words "badassity".  In our case it was a gradual process that is still evolving 3 years after we started the making changes but has resulted (thus far) in a 28% reduction in living expenses.  By basically paying less for necessities and buying less crap we don't need we've not only improved our bottom line but have been able to add luxuries such as our new "Activities" budget category that includes a YMCA membership, select baseball (which in itself amounts to a monthly payment on a nice CTS-V Wagon), as well as other fun and usually healthy family activities.

I want to start off by stating that like everyone else's, our budget fluctuates due to unforseen circumstances as well as good 'ol fashioned wasteful spending.  Also, as I mentioned in the post linked above, we completely blew it in May (and again in July) and doubled what we planned to spend going out to eat (this would serve as appropriate soundtrack, right click, "Open in New Window" if you want tunes while you read).  In May, this was compounded by the fact that we couldn't keep our family healthy and ended up in the doctor's office just about every week (horay high deductible plan!).  Thankfully, despite all that we still ended up in the black due to budget cutting in other areas, something that definitely would not have been true in the past.   

Food: $500

This is where we've wrangled the most savings and my wife gets most of the credit here.  A little prep/planning and some research goes a long way, once she started planning out meals a week or two ahead of time we not only saved from not overbuying but were less tempted to grab a pizza due to being undecided on what to eat.  As I mentioned here, we also started comparing costs ($/oz, lb etc.) between our local grocery store and Sam's Club and found that quite a few things are actually cheaper at the store.  Coupons are also king for non store brand items and handy apps like Checkout51 and ibotta make it incredibly easy to get rebates (which we're storing up for Christmas expenses) on things you buy as well.

Our diet has also changed quite a bit in that time and now includes more fresh fruit, veggies, and healthy fats/proteins.  People say eating healthy is expensive but really look at the cost of your salty sugary snacks and you'll see that when bought/prepared right, good fats/oils and lean proteins probably aren't much more expensive.  Junk food also doesn't serve as a meal replacement so it's really just adding (delicious) cost to your grocery bill without adding dietary value.  This is a fact that we validated on our summer vacation when loosening the dietary reins not only upped our grocery spending but also the diameter of our waistlines. That said, I wouldn't have had it any other way!

Eating out was another area of big spending in the past that we've essentially cut by more than half, from lunches at work to indulging in happy hours and dinners out when we were feeling too lazy to cook.  Obviously kids and lack of opportunity for dates plays into this, but we also came to the realization that it was a lose-lose as we were forking over quite a bit of money to essentially make ourselves fat.  A social life and quality time doing fun things as a family is of course important and I'm still willing to pay 4x cost for a pint of beer for the atmosphere and chance to get away so our new budget still includes provisions for date night at our church (can't beat $16 for 3hrs of babysitting!) and an $8 weekly lunch with my buds along with occasional special celebration averaged in. We have also made a habit of packing lunches and snacks for baseball tournaments but an unpredictable schedule still leads to eating out sometimes more than we planned.

Bills: $300
This area is one where a minimal amount of effort and change has led to huge savings with little to no impact to quality of life, from $140/mo savings ($202 to $62) on our cell phone expenses to $50 related to cutbacks on satellite and internet including 10% savings that was had just by calling and asking.  We were also the "lucky" recipients of a new HVAC system last fall, something that when combined with a cheaper energy provider and setting our thermostat at 80 in the summer has led to an average savings of $60/month. Little things have added up to the other $50: paying our car and homeowners' insurance annually, water saving shower heads etc.

Gas: $260
Big one here, we live in the urban sprawl of the suburbs of Austin, TX and have to drive (large distances at times) quite a bit, something compounded by our traveling baseball schedule.  We took a small step by driving more efficient car (a $1200 Volvo mentioned here) and a big one after trading our gas guzzling Sequoia for a Prius. I also started Bike commuting (~4 days/week) which netted an additional savings of $60/mo with the added benefit of my commute becoming my daily workout.

Misc: $140
In the past misc (clothes, toys, other junk) was our wildcard category and would typically make or break the budget for a given month.  I covered this in decent detail in my Worth the Wait post, but planning misc budget spending months in advance has helped us to know and plan what's coming up as well as ponder whether those things are really needed at all in comparison to what those Benjamins could be doing for future us.  Although I still wear the same set of shirts and pair of shoes purchased 2 years ago to work on a daily basis (shoes purchased 9/5/12 according to Amazon order history), I realize that I'm married to a female (and would like to remain so) and like the occasional gadget myself so we also started budgeting a small bucket of fun money for each of us a few months back which seems to have been a big help in keeping this category in check as well.

Final Savings Tally

Food $500

Bills $300

Gas $260

 Misc $140 

Total $1200

All in all, a few big changes and multiple small ones gave our income a huge boost in a time where the economy could not and while we weren't able to make up for the full amount of my wife's social worker salary, we got close enough to make it work and now have a sustainable budget that will allow us to continue paying things off and save for the future.  In the end, we're all called to be good stewards of the abundance we're given and making the most of our income is one way to accomplish that.  Taking a hard line at maintaining (or reducing) expenses as our income (hopefully) goes up as we come out of the recession will also set us up for an even better savings rate, something we will desperately need as we look towards 3 sets of braces, college educations, and all the other things that come with a growing family.

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