If you let me list the top 3 wastes of American’s daily life, it will be electricity, gas and food.

In the summer days, I’m still covering myself with a blanket when I’m watching TV in the living room. Maybe it is better to adjust the AC temperature.

I don’t want to talk about too much of gas, because pickup truck is the dream of most Americans.

But food, the everyday item, and I see a lot of waste here and there.

Last week I just threw away half bag of rotting potatoes. Because to buy a 5 pound bag of potato is cheaper than just pick a couple, but I can’t finish a 5 pound bag before they start rotting. Same for bread, same for carrots. Eat half and throw away half become American kitchen normal behavior.

If you have a family of 5, maybe this is not an issue anymore. But for a small family, it is hard to not waste food. We want the variety of food, not eating same thing again and again. Maybe it is the best to find another small family and share the food. I just don’t like wasting food!

Frugal is a choice, with 200K annual income, you can choose to have a simple life. After the tax and expense, set the annual saving goal to 100K. In 10 years, you can reach financial freedom and not afraid of layoff anymore. Meanwhile, still enjoy this 10 years, that’s part of the life as well, very important 10 years.  Don’t push too hard on yourself, enjoy every day, on a planned budget.

But if you are only making minimum wage, cheap is the only option. Otherwise, you won’t have enough for retirement.

I saw people with 200K income struggled when they were on the layoff list. Because they have a huge house to pay off, lots toys, non-stop monthly bill, unlimited data package on smart phones. They wanted more when their income increased year after year. People can not be satisfied with what they already have. If they maintained the same lifestyle as when they were making 100K and saved enough, then they won’t need to struggle when the layoff day came.

The higher level you are in a company, the higher chance you have when the layoff come. When a fresh graduate kid who only needs 50K salary can do your job, why keep an expensive senior guy who is happy with the current life and has no more motivation at work.

I always say “hope for the best, and prepare for the worst”. Live simply and save more, you can have more choices when a bad day arrives.

Sometimes we are limited to the money, so have to compromise on the quality to buy cheap stuff that does not last long. But if you can wait, save a little bit more, to buy a slightly more expensive item but last you decade of years. Long term speaking, it actually saves for you.

A good example is bath towels. I always buy high quality bath towels. When they are on sale, around $10 you can find a very decent one. The cheap kind is around 3.99, but those don’t last long. On Black Friday, I will receive $10 coupon from Kohl’s. Every year I use it on the bath towels.

How much do you spend a month? Not everyone can answer this question, especially when the spouse is paying for the bill.  But this is a very important piece of information. The couple should sit down and share the knowledge. It is better for the family finance planning.

When I’m looking at a very wanted item, I’ll ask myself 2 questions. Do I need it? Can I afford it? To answer the 2^nd question, I need to know how much I have and how much I can spend.

“Affordable” does not mean keep swiping the credit card until you can’t catch up with the interest anymore.

My cousin is working in a factory, and taking home 35K a year after tax. When I saw him buying expensive gifts for the children, such as the new ipad with ipad pensile, not just one, but one set per child, and each of them also has new iphone, every 2 years! I guarantee you he has no savings for the future. Even they live in an old small house, the monthly expense is not that low at all.

Have you heard “one paycheck away from homeless”? Yeah, if he lost the job, he won’t be able to keep the house for too long. Live paycheck to paycheck has too much risk. I will feel so stressful if I’m waiting for the next paycheck to pay for the bill. But this can be managed and avoid if you don’t spend it all.

Let’s do a math together to figure out the monthly expense.

Housing, Utility, Food, Transportation, Insurance, and the rest.

Housing cost varies so much depending on location, renting, ownership, or even become zero cost if you still live with the parents.

If you own a house, there are 3 main buckets. Mortgage payment, property tax and maintenance.  

If you are renting, I guarantee you the cost is more than owning the house, because the owner wants you to cover mortgage payment, property tax and maintenance, of course, also the owner’s profit.

So I’ll recommend all the young people to save a lot in the beginning of your career, and buy a house as soon as possible. Then you can rent the spare room to your friend who never saves. Have that friend pay for your mortgage.

In that mortgage payment, the principle is like the investment towards your house, when you sell the house one day, you maybe get it back. But the interest is pure expense, the bank will take as much as they can. The first five years of the mortgage payment, more than half is interest.  I always recommend people to buy the house they can afford and pay it off as soon as possible, especially when the rate is more than 3.75%. We can discuss this in more detail later.

Anyway, my house is all paid off, due to my frugal life style. So I only need to cover the property tax, which is $4000 a year, and spare another $2000 as maintenance fund. That is $500 a month.

Now let’s talk about utility.

Unless you live off the grid, you have to pay utility. If you have city water, electricity, gas, even you don’t use any, you still need to pay for the basic. How do I know this? I had the previous house, locked it up for a month, turned off everything because we were not living in there anymore. And it was spring time, so heater and AC were both off. My water bill was still $40, electricity was around $30, and gas was also around $30. That was $100 out of the door and I did not even use any of them. Is it ridiculous? But this is how everything was set up. You have to pay for the basic plus what you used.

My monthly utility bill is around $200. In the winter time, I pay more for the gas, less for the electricity; in the summer time, less for gas, more for the electricity.

I’ll add internet and TV cable in this catalog as well. Not too many people can live without internet anymore.

TV is totally a scam. Does not matter what company you choose, the first year is pretty fair price, then it doubles or triples for the next year. It forces you to switch the provider. Over the years, we tried so many providers, and I was tired of it. Other than tons of advertisement on the TV, I did not see too many good shows. So we decided to try couple months without TV, but only internet. That totally changed our life. We use Netflix, YouTube, HBO, Amazon, and Hulu. I’m not missing my TV cable at all. We give the account password to siblings as Christmas gift, and the big family share lots of these accounts. Netflix is paid by us, HBO is paid by the brother, and Hulu is paid by another brother. It works out perfectly.

This cut our cable bill from $200 to $80.

I just transferred my cellphone service from Verizon to Spectrum mobile. That cuts our bill from $60 to $28 for 2 phones. Yeah, just found this deal in last month, when spectrum allowed you to bring your own device.  

Transportation is another big expense. We own 3 cars, it’s all paid off, but the expense is still there. We will pay it in the future, so better save it now. Let’s say it cost $30K for a car that can drive 10 years. If you have the skill to make a $3000 car to run 10 years, that is good for you. Unfortunately I don’t. So I budget $60K for 2 cars every 10 years. That is $6000 a year, and $500 per month. Plus another $200 monthly for gas.

Insurance is simple, every year, I pay $1000 for the house, and another $1000 for the cars.

Food is another catalog that varies so much either cooking yourselves or dining out. With my family, we spent about 200 in grocery and 400 dining out every month.

All of the items above add together is about $2300 a month.  This is just the basic living expense though, not counting any fancy things.

If I use $2300 now, I’d better spare another $2300 to the retirement account to make sure I can maintain the same life style when I retire, whatever left is what I can play with.

I just opened a bag of Easter chocolate and this came to my mind. I’d like to share my chocolate tip with you.

I love the after-holiday sale, especially the holiday chocolate.

Christmas, Valentine’s Day and Easter are the 3 major holidays that has tons of chocolate on sale one week after the holiday.

I’ll wait for the price to drop to 70% off at least, then load the shopping cart with all of my favorite brands. Those are fresh made chocolate, with special packages for that particular holiday. Chocolate is the same, who cares about the package.

I will buy a lot, share with family, friends, and coworkers. I have plenty chocolate to eat till the next Christmas.  

We moved last year because of the job relocation. We moved from a 1500sqf main floor+500sqf basement house to a 2200sqf main floor+1200sqf basement house. Yeah, we upsized. Because I cannot find a same size house in a reasonable price range. A much bigger house and a much nicer house was only 30K more. So I think it is a good investment. So we ended up in a larger house. Functionally speaking, it only adds one formal dining room to the previous house.

When the moving company loaded the truck and took it to the scale, I can’t believe that just between my spouse and me, we have 6 Metric Tons of stuff. 6 Tons! The current employee paid for the relocation, otherwise I would sold them all. Because the moving expense is weight related. The final bill is more than what I paid for those stuff.  

The surprisingly heavy weight in a full truck container makes me wonder do I really need those stuff, or do I need anything more in the future?

Now the house is bigger, shall I fill it up?

The answer is no.

1. We lived happily with what we had in the past years. If we don’t need it last year, we won’t need it this year.
2. Less furniture means more space in the house.
3. Remember those household auctions? I feel sad for those people though. When you downsize again, or pass away, all the extra furniture would be gotten rid of.

The formal dining room was in my mind for quite a while. All the pretty home pictures show a dining room table with a hutch or a buffet table next to it. But do I need one?

The dining table we have fits in the room perfectly. And the bistro table goes to the breakfast area. So I don’t need to buy another expensive set. But shall I buy a hutch or a side table?

My home is not for showcase, it need to be functional. Do I need more furniture to hold stuff? I guess not. All the china dishes and wine glasses fit in the kitchen cabinets. Do I need a surface for candles and flowers and all the cool home deco? No, other than collecting dust on them, they are useless.

After I made up my mind, I feel relives. When guests come over, we can add more chairs and don’t need to worry that they would scratch the nice hutch behind it. When I clean the floor, there’s no bulky item blocking my vacuum.

Remember, it is the people living in the house make the home happy, not the stuff stored in the house make the home happy.

6 Tons of stuff is way more than enough.

Frugal is not equal to cheap, so Ribeye and lobster are still in my meal plan from time to time.

The only difference is that I don’t eat them in the restaurant anymore. A good slice of ribeye is about $20 in the local fresh meat market. While in the restaurant, they usually charge 40-90 including some potato as sides, price varies if it is a chain restaurant or a steakhouse.

Ribeye is very easy to cook. A good slice of ribeye will remain tender even it is over cooked. Grill in the restaurant did not add more flavor to the steak but take more from your wallet. Also, when ordering steak, you will feel guilty not ordering a drink. That easily adds to the final bill, and make it over 100 for 2 people, plus appetizers and tips, yeah, and tax of course.

Same with lobster. Steam lobster can be easily copycat at home. There’s no technics to it, just need to find a fresh lobster.

Cooking at home can be so much cheaper than dining out. But we still need romantic dates, just something special to enjoy. But I will not order ribeye or lobster any more, instead, I focus on those ingredients that I can’t find from a local market, such as some good fish, New Zealand lamb chop, pork belly, roast duck, etc. Also, I don’t order drinks anymore. Water please.  I will store several bottles of good wine at home and pull myself a glass when I return home from the restaurant.

When I see the tips is equal to a slice of ribeye, I hope the waitress can take that and buy herself a slice of good meat and cook at home.

My family membership to YMCA was 800 a year. My previous employee reimbursed half of the cost as their health program. So it was not too bad for $400 a year, including swimming pool and indoor tennis.

After I relocated for my new job, there is no YMCA nearby. So I did not renew the membership. We were looking for a place that has both pool and tennis, but unfortunately, there’s no such place around.

There are some Gym selling the membership, which has those equipment that you can spend hours on and hopefully lose some weight if not eating too much after that. I’m not a big fan of those Gym. First it smells bad, second, why spend time there when you can also lift things at home when you put the dishes back into the cabinet, or move the vacuum machine up and down.

Only if it is a social need, I would recommend you to do house work instead if you want to stay in active. Well I do see people use the Gym shower as a purpose of the membership, which is another story. If you are like me, never use the Gym shower, can enjoy the long hot good smell shower at the sweet home.

In the summer time, there are so many nice outdoor hiking places, biking places, fishing places. Fresh air is so nice, why breathing in the smelly Gym air.

In the winter time, stay in the basement and play some dancing game on Xbox.

In the spring, there are lots garage sale. I just paid $25 for a very nice pingpang table. I can see myself playing that for hours in the cold winter.

We’ve been without a Gym membership for over 1 year now. Actually we did not miss it at all. We go swimming when on vacation, any play badminton in the backyard instead of tennis. The high school here do have a swimming pool, so if we really want to go swimming, we can go to the school, fair price as well.

Reconsider what you get from the Gym membership, maybe cancel it and spend your time at home, help the spouse to do some house work, and play with your children. If you are single and want to make friends at the Gym, well, you can keep it.

Thanks for joining me!

Good company in a journey makes the way seem shorter. — Izaak Walton