Best resource to ease someone in to tracking / reducing expenses?

[Weebit]

Hello all!

I lurk a lot but post rarely. I do most of my & DH's retirement planning and am about to go through another closer look at our expenses, savings, etc.

DH expressed an interest in reducing spending but not reducing his standard of living. I see this as a potential hook to get him to look more closely at ways we spend that are not as rewarding as they might appear to be.

Does anyone have any recommended sources I could point him toward that are along the lines of "painless hacks" that reduce spending?

I KNOW that this is a rather unrealistic way of thinking about spending, but I see any interest on his part in scrutinizing spending as a potential a "gateway drug" toward more careful spending and thus, earlier retirement. (He's on board with saving, so we've got half the battle under control...)

So if you can withhold the judgement, I'd love some recs! (And for those who can't withhold judgement, good recs still appreciated!)

Thanks for all the info you all share on a regular basis. It has been helpful.
jkf

 

[pacergal]

First off, both of you could sit down and go through the past few years spending very carefully. Look at anything you could stop/drop and still maintain what your DH considers a good standard of living.

Sometimes small sustainable reductions work better. Look at cell phone costs, tv/cable/internet costs--can they be changed or reduced?
Groceries/dining out changes?
How often do you replace cars? Can you delay a few years?

Those are a few things I can think of.
Many more folks here will have other ideas and references.

 

[PaunchyPirate]

I think the best way to set oneself up for expense reduction is to meticulously track your spending so that you are presented with the obvious facts as to where you spend your money.

I started tracking pretty much every dollar I spend 2 years prior to my retirement because, prior to that, I really didn't know exactly what I spent my money on. I didn't start tracking in order to identify places to reduce my spending, but it certainly could serve that purpose.

I've been retired for 3 years now and I still meticulously track my spending. I don't have a budget. I buy what I want. But every day, I see where my expenses are up to that point in the year. I now have a 5-year history of my spending - in great detail.

I use Quicken to track my expenses into categories I have set up. I make all my purchases on credit cards and download those transactions directly into Quicken and then apply them into my categories. About the only thing I pay cash for is a haircut or a lottery ticket now and then.

If you have a well-documented list of your expenditures down to enough detail that it clearly identifies your category totals, then you should be able to talk through that list with your spouse and decide if you have the desire/means to reduce the spending in specific categories.

 

[SnowballCamper]

DH expressed an interest in reducing spending but not reducing his standard of living.

Then look at what actually defines his standard of living. Those expenses would have to remain, or possibly be found for less money. Then the things or services that don't contribute to standard of living can possibly be done away with.

It seems to me that this is a very individualized process. For example, clothing has very little to do with my standard of living beyond fit and comfort. But our camper is a rather high end fiberglass model that we wouldn't trade in (and it's a sunk cost anyway). While I was still working, the (in retrospect) expensive to-go coffee was essential, but now it's all home brewed coffee. Eating out is not a regular event for us, but camping trips are, and we stay at the cheaper public campgrounds.

Good Luck!

 

[racy]

We didn't focus on spending but rather on saving. So, our method was:

(1) Did savings via automatic deduction, saved a lot & increased with every annual pay raise.
(2) Never carried a credit card balance; always paid it off monthly.

Then, spent the rest.

 

[FLSUnFIRE]

First thing I would look for it "subscribed expenses," they offer the biggest bang for the buck and involve on decision but the savings continue:


Media subscriptions (streaming services, magazines, etc)
Unused loyalty memberships that charge fees/credit cards with annual fees that don't pay off in rewards
Cell Phone (Shop around for better plans. I'm on PCS which cut my bill in half with no issue in coverage, could probably go lower with Mint as I know several friends on Mint and are happy as well)
Insurance (Shop it every year or two... lot's of threads)
Basically any recurring automatic payment, look at your bank/CC statements and ID any recurring charges that can be reduced.


To me those are the absolute easiest, next would be looking for waste. Are you in the habit of turning off lights when not in the room, A/C programmable or smart so you're not heating/cooling an empty home. Low flow shower heads (might be an impact to "standard of living" but I enjoy high pressure and lower flow myself), etc.


Next elimination of habits that add no value to life. Are there things you do by habit but don't need to? Dryer sheets, would you miss them? Etc.



Next level would be substitutions; do you buy name brand groceries and household products? Have you tried cheaper alternatives? I find the quality of some store brands now exceed some of the national and are cheaper too. If you can find alternatives that offer the same value to you for lower cost you've saved without any change in living standards.


After that, you are probably getting into trade-offs that may impact quality of life but even there... Will you really use the highest options package on your next car or will the next lower package have every feature you'd use and enjoy.


To flip it, these are the most important things to me and my level of thrift increases as I go down the list and it is less important:


1. Health and wellness (I buy fresh fruit and veggies, fitness equipment/memberships, seeking care when needed, hiring out "back breaking" tasks I would have used to do myself but less likely to risk injury now, guitar and lessons are not cheap but add a mental challenge and source of accomplishment...when not frustrating me)
2. Social activities (probably should be 1.1 as having social connections is really a health and wellness thing) I track "socializing" as a separate category.

3. Daily comfort (A/C is cranked down at night as I'm a hot sleeper, ergonomic/comfortable furnishings)
4. Travel (big range, personally I don't need fancy hotels as I am going to experience wherever I am, not going to use the amenities beyond the "free" breakfast and I hate paying to park/valet!)

5. Laziness... paying someone to do something I could so myself. -Dining out alone/take out (not a social meal) for example.
6. Conspicuous consumption/fashion or any spending because it is "expected" of me or the primary purpose is to impress others.

 

[Bamaman]

Expense reductions is often a product of a bunch of small changes.
We seldom eat out, and when we do it's not at very expensive restaurants.
Stay at home (if you're retired) for a couple of days. Every time you go out, money's spent.
Drive automobiles until they expire. Cut back on the # of vehicles in a household. (I have 5 cars/trucks.)
Go on less expensive vacations.
Cut the thermostat up or down--depending on the season. (I only run my upstairs furnace/heat pump in Summer.)
Start grocery shopping at Aldi's and fill in at other grocery stores only buying that week's sale items. (Steak is not on our diet any longer.) We're both great cooks, and we're not suffering in the food dept.
We virtually never walk into a sticks and bricks department store or a mall. We seldom buy any clothes--since we already have a closet full of them.
Shop your auto and homeowners' insurance policies--my biggest personal expense.
Stay out of drive in markets. If we anticipate we're going to need snacks and drinks while traveling or running errands, it comes from home.

 

[oscar1]

Commit to reading this blog for 30 minutes a day for a week and see if anything catches your interest?!

https://www.mrmoneymustache.com/2013/02/22/getting-rich-from-zero-to-hero-in-one-blog-post/

 

[FLSUnFIRE]

One other thing, you mentioned in your title.... track spending. I build a budget now that I'm FIRED but it's more of a projection than any sort of limit. Budgets can feel constricting but tracking is just information!



I've tracked for years, just measuring and being aware changes behavior (feedback loop) so if you can find a tracking system that works for him encourage him to do it (maybe a spreadsheet down to the penny like I do, or possibly looking at bank statements and notating the charges)

 

[disneysteve]

I can't suggest a single resource. I think it's far more about mindset - looking for opportunities to cut spending without cutting what you're getting for your money.


Start with recurring expenses like insurance policies, cable packages, and subscriptions. We saved hundreds by switching our auto insurance a couple of years ago. Same coverage, just way cheaper.


Take advantage of as many loyalty and reward programs as possible. Free travel, free meals, and more are easy to get when you learn to play the game.


Take full advantage of reward credit cards. We charge everything we possibly can to our cards and earn hundreds per year in cash back and free travel.


Comparison shopping. The internet makes this easy. Check on things you buy regularly and see if you can't find cheaper places to get them. My wife takes an OTC medication. Initially we bought it at CVS or Target. Then we found it was cheaper on Amazon. Then we discovered it was even cheaper at BJs, so much so that what we save on that one item alone is enough to cover our annual club membership. Everything else we save by shopping there is an added bonus.


The first step, as others have mentioned, is to sit down together and review where your current spending is happening. Then you can gradually look for ways to trim the costs without cutting back on the outcome.

 

[OldShooter]

Make it a game to never pay list price for anything.

I have a router/WAP here that I bought as "refurbished" direct from Linksys, about half list price IIRC.

I have a "working outdoors" (not fashionable) Cabela down parka that listed for around $400, bought in March a few years ago for $150.

Yesterday I ordered a book from Amazon. "Used, good condition" was about half the price for a new copy. Wherever possible I order from the used book inventory and almost all of them come in like new condition.

On bigger things, CraigsList and Facebook are your friends. A couple of weeks ago I bought a pair of Klipsch "Heritage" speakers for $850; Klipsch is now selling them new for around $3200, a sum which I would never pay. Craigslist and Facebook usually take some patience. I probably spent a couple of months waiting and watching for what I wanted. But it's like hunting --- fun. Prices on eBay are usually high and shipping on bigger items can be a killer, but you can watch there too. Use bid sniping software like EZSniper and never bid until the last 10 seconds of auction.

 

[disneysteve]

Make it a game to never pay list price for anything.

Definitely use the internet to your advantage.


Join your local Buy Nothing group on Facebook. We have gotten countless things on there for free that we otherwise would have paid for. It has saved us hundreds. (We've also given away many things in our ongoing effort to clean out our house though that's a separate topic.)


Always check Amazon and ebay before buying most anything. You can very often find the item at a better price. As OldShooter noted, factory refurbished items can be a great savings too. My wife recently bought a refurbed heat press for her sewing endeavors. It was about $300 which is half or less than a new one. But even everyday purchases, like printer paper or ink cartridges or tools or light bulbs or whatever can generally be found for less.

 

[FANOFJESUS]

I find putting everything on one credit card is very helpful and easy. Everything other than taxes and utilities are all there in one number.

 

[Midpack]

Assuming you already track your spending in some detail (if not, start there). You might be surprised how much you spend in a year on small but frequent categories, those who don't track aren't likely to realize.

We just periodically review every spending category to see if we see value in what we've spent, especially the big ticket categories - but that's an individual decision we can't make for one another. Big ticket meaning the most $ spent whether it's 1-2 big charges (insurance) or LOTS of little charges (grocery shopping, subscriptions, TV, etc.). Just examples:

• It may lead to getting new quotes on insurance and saving there.
• It may lead to looking at what we're buying at the grocery store, and making more conscious choices - store brand vs national, substitutions (raspberries vs bananas), soft drinks vs water/tea, Costco coffee vs Peet's.
• It leads to revisiting what we pay for TV, mobile, internet at least once a year, and adjusting - we've saved thousands there over the past 4 years.
• It leads to buying new vs used cars. Or replacing cars every 6-7 years instead of 4-5 years.
• For us it leads to avoiding subscription services like the plague. It's amazing how $10-15/month for a bunch of different subscriptions adds up to some serious money over a year.
• When you plan travel and vacation, it's very easy to spend 2X and not get 2x more enjoyment. We don't spend a lot on hotels, because we only sleep there, we're out and about all day - so there is almost zero added value in staying at a waterfront Hilton over a Hampton Inn.

I could go on and on. But we track spending, and revisit every category sooner or later.

Doesn't mean you always choose the cheapest option by any means - I am not advocating that at all. We spend lavishly on a few things because it's worth it to us, and more mindfully on most.

 

[mystang52]

Many, many resources for HOW to budget, save, control spending, etc. But often these disregard the real world of the specific individual's spending habits.
Solely as a starter, here are some practical tips:
1) Add up every current fixed bill you have: e.g., monthly utilities, mortgage payment, insurance, property and other taxes that you manually pay, loans, subscriptions, credit card payments, etc.
2) Add up your total net income.
3) Total net income less fixed payments = your discretionary income.
4) You then have 2 general categories to reduce spending: some of those fixed bills such as subscriptions, and discretionary income.

Pick and choose where you may be able to cut without changing lifestyle such as canceling subscription you no longer need or want, eat out one less time per week or month, or most importantly pay credit card bill in full each month if you're not doing so now.
After this beginning, only then look for more budgeting, saving and spending tips.

 

[Exchme]

It's clear your husband is less enthused about this than you, so start with the things that truly have zero impact on lifestyle. We went through our regular bills and found that we were not getting the best available deals - Internet, TV, auto insurance, alarm system, cell phones, we even had a land line phone line for some reason. Combined, we were throwing away a few thousand per year. Every time we found something, we would multiply it out and discuss the annual savings - that makes it a lot more meaningful. You have to celebrate each little win to try to make winning a habit.

Now I need to get DW interested in Fidelity's 2% cash back credit card.

 

[brett]

I am not big into spreadsheets. Had enough during my working life. Stopped doing retirement spreadsheets when I realized we had more than enough to go early. We do not have a budget. We just keep track of our after tax spending so we know how much to draw down over the next several months.

But....we do shop on value and we have always tried to make every dollar count.

We make a practice of reviewing our large annual expenses. We check the numbers, check the competition. Utilities we just locked in for three years-gas and electricity. Insurances we review deductables. We do not switch for a small difference but have when the differences were 10 plus or more.

We have kept our older cars in great shape. Affordability is not the reason for not buying new ones. Happy with what we have and they work just fine. Besides...who wants to absorb so much depreciation? We would rather spend the money on travel.

We do not scrimp on food-especially fresh fruit and vegetables. But we do buy some items in bulk and we pay attention to pricing. We do not care what we paid for toilet paper or peas last year. It has no impact on our purchases this year, or next year. Rather, our focus is on getting the best value, price/quality combo, that we possibly can today.

We travel frequently. We found that that buying last minute air, hotel etc can often be better than locking in months ahead of time. But...we do a fail amount of shoulder season travel. We have been doing this, pre covid, for the last eight years. Usually 4 months of international travel per year over two trips.

I am a big believer in the 80/20 rule. Start with spending 80 percent of your effort monitoring and squeezing as much value as you can on your top 20 percent dollar expenditures.

Last week we took a hard look at our cable/internet/cell costs. There is increased competition where we live. It took all of 20-30 minutes of phone and wait time to get our monthly cost reduced from $181 to 82. It also included an enhanced service level. I think of this in terms of a $100. monthly after tax saving that will extend well past the current year.

A year ago it was home insurance. Dodged a 24 percent increase from our insurer and managed to remain with them. Over time these savings or expense avoidances really add up.
When we first retired we moved to an area with good public transportation. We decided to get rid of one car and felt that if we needed another one for a short period we would rent one. Never needed to rent. Big saving year after year.

All of our calculations, pre and post retirement, were always based on after tax income. We monitor our investments more closely than our spending and we engage professional tax advice from time to time.

We think that it is mostly about common sense and understanding numbers more than any other skill.

 

[harllee]

I suggest that your husband read the book Your Money or Your Life by Vicki Robin. It has been around awhile so your library probably has it. It was a life changer for me about reducing expenses.

 

[daylatedollarshort]

I suggest that your husband read the book Your Money or Your Life by Vicki Robin. It has been around awhile so your library probably has it. It was a life changer for me about reducing expenses.

I like that book, too. Living better for less is my main hobby. We live in a high cost of living area and were able to cut around $40K from annual the budget while improving or maintaining our lifestyle. I also like the Tightwad Gazette books. They really helped to bring down our grocery bills.

I find reading books on happiness research helps. Most of the factors that really make people happy, like social connections, music, art, meditation, mindfulness and expressing gratitude aren't expensive. The happiest person in the world on brain wave studies is actually a Buddhist monk - Is this the world's happiest man? Brain scans reveal French monk found to have 'abnormally large capacity' for joy, and it could be down to meditation | Daily Mail Online

Some specific thing we did to cut expenses without hardship were to make the house energy and water efficient, change where we grocery shop, and find cheap but fun entertainment - seat filler tickets, annual passes, and college events.

 

[almosttime]

Such good info here. In addition to many of the above suggestions, I began using YNAB (You Need a Budget) a year before retirement. Bit of a learning curve, but YNAB continues to be so helpful. I realized that I spent a little too freely! Mindful spending is, for us, a powerful tool. I buy what’s important to me, know where I stand at all times. Check out YNAB’s Webpage and YouTube stuff.

 

[Gumby]

I am not big into spreadsheets. ...

I am, and I credit that with helping me retire. For years, I closely tracked our spending on a spreadsheet I created. Summing everything up every month often made me stop and think about how and why I was spending my money, and often led me to consider whether I could get a better deal, do it a less expensive way or eliminate that expense altogether.

 

[kgtest]

Make it a game to never pay list price for anything.

I have a router/WAP here that I bought as "refurbished" direct from Linksys, about half list price IIRC.

I have a "working outdoors" (not fashionable) Cabela down parka that listed for around $400, bought in March a few years ago for $150.

Yesterday I ordered a book from Amazon. "Used, good condition" was about half the price for a new copy. Wherever possible I order from the used book inventory and almost all of them come in like new condition.

On bigger things, CraigsList and Facebook are your friends. A couple of weeks ago I bought a pair of Klipsch "Heritage" speakers for $850; Klipsch is now selling them new for around $3200, a sum which I would never pay. Craigslist and Facebook usually take some patience. I probably spent a couple of months waiting and watching for what I wanted. But it's like hunting --- fun. Prices on eBay are usually high and shipping on bigger items can be a killer, but you can watch there too. Use bid sniping software like EZSniper and never bid until the last 10 seconds of auction.

This is actually practical advice. Making it a game, hunting. I love this comment most out of all of them.

I always look for used - like new on Amazon. Likely someone just decided they didn't need/want something and amazon marks it down.

I also like the idea about whittling down subscription costs.

I don't track meticulously, but I track core expenses and keep a close eye on those.

I tried multiple times to find cheaper auto insurance but so far haven't had any luck. Same with homeowners, even tried doing them separate but nothing beats our combined policy savings.

My ol man takes 'the game' waay too far. He washes those plastic dixie cups, and plasticware to re-use it. I never did get this since he has perfectly good silverware that can be re-used. He still wears his free work shirt and I don't think he's ever bought clothes that I am aware of...mom buys his pants, sister buys his shoes every other Christmas or so (He still has his new pair in a box), I get him hats to wear. He isn't a great tipper, I think he does like 5 or 10% where I usually do 15%. He's used the neighbors recycled oil from their oil changes in his vehicles. He waits till the wires are showing on the cars tires before he deems them ready for replacement. He is insane about his gas usage, runs the house too cold, for too long in the winter...and same with AC, it can be quite warm in his house in the summer. He will water down the juice he buys from the store to get 2 containers out of one. He does this weird thing where he will try and cook with just what he has in the pantry for months on end without going to the grocery store.

I shop at discount stores and buy in bulk. I never pay retail for gas, its either from CostCo or with a coupon, or my grocery has reward or a rewards credit card.

I play the cash back game, but even my ol man is way better than I am at that. Sometimes I prepay utilities if its utilities category to the top of the max cash back reward, or same with groceries I will stock up on things at the end of the cash back cycle.

I use electricity sparingly, unplugging everything that I don't use. I don't know if I totally recommend this but sometimes I go a day without a shower, only on the days that I had like no physical activity. I will re wear a pair of jeans like 2 or 3x before tossing it in the wash as long as they are clean.

I try to buy things that have multiple purposes. I buy my books used like new. My wife is great about finding free books no her kindle. We do pay for amazon prime, and netflix, but our folks split the cost of those memberships with us. We have a family cell plan and Sister in law and parents pay us the monthly fee, so its more reasonable. We don't pay for Uber, for instance we are travelling to San Francisco and again to Vegas, it was over $220 plus tax for airport parking, so I offered to fill my dad's tank if he brought us and picked us up...he was more then willing.

We keep it in the family. A real DIY family that helps eachother out, sort of trading labor and loaning tools/borrowing tools rather than paying for a service call.

I wash my own vehicles as often as possible. DO as much maintenance as it makese senese, changing my own wiper blades, filling fuel, brake jobs and any small easy repairs like alternator and battery swaps. I shop around for tires.

I return things when I get buyers remorse. It happens. I return things I don't use rather than letting them sit on a random shelf or tossing them into a box in a corner. I sell what I haven't used in a while on Facebook. Dropping the price until someone bites. I buy used stuff off fb marketplace.

I keep things in my amazon cart and watch for price change notifications. I avoid impulse purchases.

I avoid fee's and interest like my life depends on it.

 

[kgtest]

I am, and I credit that with helping me retire. For years, I closely tracked our spending on a spreadsheet I created. Summing everything up every month often made me stop and think about how and why I was spending my money, and often led me to consider whether I could get a better deal, do it a less expensive way or eliminate that expense altogether.

My spreadsheet is my bible. I literally never would have been in a position to ER without it. I'm still accumulating but tracking progress is essential to any plan, and without a plan, there is nothing to track so it works both ways which is important.

I forgot to mention, when I see discounts on things I bite. I got 25% off movie gift cards for Marcus for xmas and loaded up. Kohls cash is huge. Using the target app is huge. Even my energy company gives us cash back for every kwh of energy saved, and offers discounts for nest thermostats and rebates for energy saving improvements.

I do my own taxes, and manage all our money myself so I don't have tax accountant and advisor fees.

I could probably go on forever about what we save. It's not what you save though, but rather what you spend, how you invest and WHAT you invest.

We pay ourselves first. I set a target and do my damndest to hit it. This year we plan on putting in 1/3 to 1/2 of our NET income into investments which is very hard with 3 kids, travel and a large mortgage payment.

I should go to the library more, I hear they have free books to read there.

I don't eat fast food, but if you do, I hear you can get deals using there apps like McD, Taco Bell, etc.

If I go out in a group, I try to pay with my card and have folks pay me for their share to get cash back rewards. I am always the first to throw down a card and have buddies just hit me back with cash or venmo

 

[kgtest]

Budgeting and going over the numbers is hard, but it puts a baseline out there and sets expectations. It requires respect and discipline, along with trust and validation to bring it all full circle without ending up in marriage counseling. And even then, counseling is cheaper than a divorce

I'll never forget this big billboard I saw a few months ago it said "You don't need a divorce, you need a bigger house!" Thought it was fitting with us all working from home with each other couped up inside.

If you are feeling stressed about money, go for a walk in the woods, its free and will help you clear your mind. And if you have no woods, substitute for a walk around a lake, or in the desert if you have to.

Buy One Get One is another idea of how you can save.

 

[daylatedollarshort]

I kept a detailed budget and expense spreadsheet during our college financial aid and ACA cliff years. Staying under both max taxable income limits meant an extra $40K or so in after tax money between financial aid and ACA tax credits. One of my spreadsheets I started a few years ago is all our special events with a total cost and fun factor. A lot of our "10" fun days really didn't cost too much. I have almost 400 events now on our spreadsheet, and the ones that were the best bargains added to half the fun, like wine tasting with a Groupon passport, or seeing a concert on seat filler tickets and getting front row seats.