This dream started nearly seven years ago, but that doesn’t mean we started saving seven years ago. In fact, I went through a brief period where I wanted to buy a house, but I also wanted to have a 20% down payment. That goal lasted for about a week. After a series of different “dreams,” we finally really started pursuing this dream in a financial sense around the time of our wedding in October 2010. We were able to get a good start from our wedding guests, but before we started our own savings, we had to pay off my credit card debt.
I’ll get into the whole credit card debt story another time, but that was our first goal in moving toward our dream. Oh right, I also had to get a job.
We paid off the last of the credit card debt in November 2011. While we paid off that debt, we also started a small savings for emergencies and things we knew we needed to save for, such as vacation (hey, this is a long process) or medical expenses.
In the process of paying off debt, we had quite a few major expenses come up – many (many!) car repairs, cat getting sick, gigantic tax bill (only our second year of marriage and first where I had a good paying job), last minute trip to LA for my aunt’s 75th birthday, etc. Of course, emergency savings didn’t quite cover all of that. We ended up pushing our departure date back by a few months, which in the end, has to turned out to be a good thing.
Stop looking at me pig!
Here’s how we do it…
One area where I’m not willing to compromise is with the quality of our food. We shop almost exclusively at our local natural foods store, New Seasons. For toilet paper, cleaning supplies, we generally go to a bigger store (where I can usually find e-coupons) like Fred Meyer. Anyone who has been to New Seasons before (similar to Whole Foods) will testify that it can be hard to get out of there without spending double what you meant to spend. There are just too many tempting treats there and it’s not cheap. I used to be guilty of this. Now, each week when the flyer advertising weekly sales comes out, I spend about a half hour creating a meal plan for the week. Since Shawn gets lunch at work, I only have to worry about my lunches, for which I usually bring leftovers. I rarely eat lunch out – it’s not really worth it to me anymore. There aren’t many good places to eat around the area and I work in a hospital, so the food at work is definitely not worth the cost. I generally cook most nights. Sunday is when I make our biggest meal and try to extend that into a lunch or two and at least one night of leftovers. All this planning has helped us in me in my biggest area of weakness….eating out.
This is a hard category for us because I stick eating out under this umbrella. It is entertainment for me and with all the new restaurants and carts popping up in Portland all the time, one of the hardest areas for me to cut back.
We also, once upon a time, would go to at least a concert or two a month. This isn’t a huge expense since there are plenty of cheap shows to see, but pair that with a couple beers each and suddenly we’ve dropped $50 in a night.
Here’s basically what’s covered under the title of Entertainment: alcohol (except for a six pack from the store each week and an occasional bottle or box of wine – don’t judge, it’s good now); meals out; concerts; records/music; clothing; yoga classes; sporting events – it’s a bit of a catch all. I do usually try to plan separately for our bus trips to Seattle to see my family, though.
Here’s where we made our biggest sacrifice – we sold our car. The one and only car. I went back and forth on this issue for, well, about the amount of time I owned the car. Cars feel like such a waste of money to me, but it’s hard living without one. Well, that’s what I thought until I actually did it. I get a free bus pass from work. Without that, we probably wouldn’t have done it. That saves us $100/month, which is what we pay for Shawn’s bus pass. We use car share programs like Car2Go (LOVE) and, rarely, ZipCar for times when we need a car, like taking the cat to the vet. We sold the car in October 2012 and while it’s had its challenges, overall, it was the best boost we could have given our savings. It was paid off, but I was able to sell it for $3,500, and even though my insurance was minimal and my gas expenses weren’t too bad, the impending threat of emergency repairs not only boosted our savings, but also brought my stress levels way down. I can’t tell you the hours I spent worrying over that thing.
The decision to sell our car became a bit easier once the Bolt Bus came to town. For those of you not in a Bolt Bus serviced area, let me explain. Basically, it’s an express bus service that started out with just service between Portland and Seattle. It’s now expanded to Bellingham and Vancouver, BC, with more plans to expand, I expect. Tickets start as low as $1. Granted there are few times when you actually get a $1 ticket, but I’ve gotten it before and generally our round trip tickets cost anywhere from $19-36. That’s right, round trip. So, if I’m riding solo, it’s so much cheaper than driving. It’s not a bad way to ride–wifi, relatively clean bathroom, and decent seats–although you have to be careful at what time you choose to leave. Traffic is traffic. It’s generally on time and the pick-up/drop-off location is in Chinatown in Seattle, so it’s always a good excuse to grab dim sum before I leave on Sundays.
Yes, MORE savings. We have a few different categories: trip savings; emergency savings; kitty savings; retirement savings.
The emergency savings became less important once we got rid of the car – those were usually the expenses we didn’t predict. So now we only stick about $50/month in there for things we can’t predict, but we haven’t touched it in months (knock on wood).
Shawn is still contributing about 5% of his paycheck to retirement savings. I reduced mine to 3% this year because the cash is more valuable to us at this point, but I wanted to still reap the benefit of the match program at my work. It’s tempting to forgo this contribution, but really, the tax deferment helps, the contribution is pretty minor, and who am I to turn down free money from my work? I also have been adamant about saving for retirement since I was in high school thanks to my mom who works in the stock market. I don’t have a lot, but it’s better than nothing.
What makes our savings an extra challenge is that we earn the highest interest rate on our checking account through our credit union – 2.25% up to $25,000. That means, we have to virtually save all this money. It’s all in one big pot, so I can’t just shove it to another account and ignore it. I have to manually keep track of every expense. I’ll admit, it gets overwhelming at times. I’m sure I make mistakes, but I usually round up when tracking our expenses, so I figure there’s a little leeway thanks to that method. It’s a bit like virtually collecting our change.
We also just got a travel rewards credit card. After a lot of research, we decided the best card for us was the Capital One Venture card. We get two points for every $1 purchased, plus 10,000 bonus points when we spent $1,000 within the first month (easy to do when you buy tickets to Mongolia). The $59 annual fee is waived the first year and the points are good for any travel-related purchase, so it’ll come in handy. It is a little daunting to make sure we use our checking account enough to reap the benefits of the interest rate and use the credit card enough to get points, but we’re managing.
These are just some of the ways we’re saving and I’m sure more of my little tips will pop up as I continue to blog…but the point is, we’re not rich. We’re not special. There’s nothing magical about how we’re driving this dream. Shawn does social work, I’m an executive assistant. We don’t make gobs of money. We are lucky to have options, but what we’re doing is just a choice. We just make different choices because this is what we want. It’s hard, for sure, but this is a part of our journey. As much as I’d like to deny it, we are currently living our dream. It’s not terribly glamorous, but we manage to live a good life while saving a big chunk of our money.
And it’s worth it.
What other tips have you found helpful for saving?