Is your site monetized?  Do you receive any income from your own blog or site?  If so, take our quick five question survey!

So far, we've introduced over 100 LTNE readers to the premium, but frugal, Dollar Shave Club shaving experience!  Click here to check out Dollar Shave Club!

Your Amazon purchases through this box support this site at no extra cost to yourself!  Thanks!

Click to Follow Us On...

 

Tuesday
Jul242012

How I Saved My Family $214,292 This Week 

(** Welcome visitors from Nord's superb Military Retirement and Financial Independence Blog!  I'm really happy to welcome you to my site.  Please pull up a chair and stay for awhile!  Please check out the hot posts links below the newsletter sign up form to the right of the blog posts!  Drop me a note on the bottom right if there is anything that I can do for you! **)

I realize the tone of my writing recently has shifted to frugal living and I hope all of you are still with me.  Perhaps this is a natural segway since it is obviously going to take many more months, if not years, to develop some additional income streams (though at least a few of you have helped in this capacity, particularly by signing up for the free Mint.com online money management service and, in doing so, kicking a small amount of money to this site-- thanks!  My review of Mint.com is here.) and this entire blog is the chronicle of my eventual transition from the military, which is still at least two years away.  Anyhow, right now my mind is on frugal living, so bear with me!  

While I was deployed to Afghanistan in 2010, I bought my wife a Nespresso coffee machine (Amazon link).  Click to Open at Amazon.comBoth she and I are hopelessly enamored with good coffee and we've tried a variety of machines throughout the years in search of the perfect cup of home-brewed coffee.  After reading a review of the machine from Robert Scoble, I hit purchase on Amazon (yes, from my Polish satellite internet provider in Afghanistan-- isn't technology and globalization wonderful?) and had it sent to her back in the US.  She was thrilled and we've both been in love with the machine since, as the brewed coffee is tasty, the machine has a built-in milk frother to make lattes and cappucinos, and clean-up is a breeze (clean up hassles were always the problem with other machines).  So how does an expensive coffee machine have anything to do with frugality?  Two things really.  One, we like a lot of coffee and in proper European fashion, the Nespresso brews dainty little cups of coffee.  So, inevitably given our caffeine addiction, we end up drinking two or three cups a day each.  This leads to problem two:  the little pods that fuel the machine are about $.70 each, so we were spending about $75 a month on coffee pods

Newly frugal me is deeply troubled by this amount, especially when I lump coffee into the "groceries" part of our budget and I'm trying mightily to get our family of five below $1000 a month on groceries.  So, we came up with a plan:  

This week, we moved the Nespresso up to our bedroom and made a bedroom "coffee bar," where we'll enjoy our fine quality Nespresso coffee when we wake up on weekends.  The big 12-pot normal coffee maker is back in its place in the kitchen for weekday coffee consumption.  Now we get to truly enjoy the premium coffee experience on weekends (take that, hedonic adaptation!) and save during the week.  Total savings:  $8,960 over ten years.  What's that you say? Nearly $9,000 by switching our coffee consumption habits?  How?  Well, I will save $50 a month by not buying coffee pods and that money instead applied to some investment compounded at 7% a year ultimately adds up to $8,960 over ten years.  

I know this sort of thing might seem tedious, but I'm suddenly making these ten year calculations with everything we do.  

Haircuts every two weeks for me and every month for the boys:  $15 each after tips.  Haircuts with clippers at home:  $0.  Savings invested over ten years:  $8,448.  Yes, my wife is our barber and she is getting better all the time at home haircuts...

Click to Open at Amazon.comI've also begun to shave with one of these (Amazon link).  Good enough for Grandpa, right?  Well, it is good enough for my wife and I too.  Shaving soap is $2 at the military commissary and it lasts six months.  The brush should last much longer than that.  The kind of shaving gel we were buying was $4 and it lasted one month, plus clogged some landfill after we used it up.   Switching to shaving soap yields $660 over ten years.  Plus, since I shave first thing each morning, it is a good reminder at the beginning of each day about living a frugal lifestyle.  How about those four-blade razors that they lock up at the store?  Gone, as soon as my current stockpile is exhausted.  

Cut $200 from the grocery bill?  $35,840.00 over ten years.  Get rid of cable television?  $17,024.00 over ten years.

Going to one car instead of two (assuming ten years of car payments, gasoline, and average maintenance costs)?  A staggering $143,360.00 given what I have been paying to this point

Why do all of this?  Well, for one, these ultimately aren't big sacrifices.  They do, however, add up to big gains if you have the discipline to leverage savings with compounding.  I've thought a lot lately about the one big concept I missed in my first 40 years of life and I think this is it:  think like a producer and not (just) a consumer. Investments in lieu of consumption are the very essence of producing, since you are creating instead of just consuming wealth.

OK, so the decisions I made last week didn't actually save $214,292 right now, but they will over the next ten years, as long as I stick to them!

What are you going to give up or downsize to increase your wealth creation?  Just think:  giving up a $5 cup of coffee every day for the next ten years can actually translate to $26,880 in accrued wealth.  (<-- Click here to Tweet this).

I need your help!  If you want to recognize the work that we are putting into quality content here, you can have a direct impact on this site's success.  (1) Leave a question or comment below, and click the Tweet, Like, or Pin It buttons directly below this post to refer this article to your favorite social media sites.  (2) Like our Facebook page (3) Sign up for the recently launched LTNE email newsletter on the right sidebar and receive monthly (yes, weekly was just not working out!), non-spammy LTNE goodness via email. (4) Finally, if you'd like to help in a more direct way, please check out any of our site advertisers or, if you are an Amazon.com shopper, use this link where your purchase doesn't cost you anything additional, but passes a little bit of money back to this site!  Thanks!

I would be remiss if I didn't refer you off-site to Mr. Money Mustache, my new source for all things frugal living.  From my foxhole, he is absolutely the standard bearer for the frugal lifestyle and is the inspiration for my new, incessant 10-year calculations. 

PrintView Printer Friendly Version

EmailEmail Article to Friend

References (3)

References allow you to track sources for this article, as well as articles that were written in response to this article.
  • Response
    Response: coffee recipes
    How I Saved My Family $214,292 This Week - LTNE: - Live the New Economy.
  • Response
    Response: #Dressorthotics
    How I Saved My Family $214,292 This Week - LTNE: - Live the New Economy.
  • Response
    Response: #Dressorthotics
    How I Saved My Family $214,292 This Week - LTNE: - Live the New Economy.

Reader Comments

There are no comments for this journal entry. To create a new comment, use the form below.

PostPost a New Comment

Enter your information below to add a new comment.

My response is on my own website »
Author Email (optional):
Author URL (optional):
Post:
 
Some HTML allowed: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <code> <em> <i> <strike> <strong>
« Lending Club First Month Review | Main | Tuning Out »