TILT # 35 - Know where your money goes (frugal tip #6)

As mentioned in the introductory post (#24) on this frugality series, the main principle for frugal living is to choose to have as little “miscellaneous” spending as possible. Refer to the photo I shared in that post. Most of the people in my circle do not have $27.40 a day to spend without much thought. But I know of a good amount of people who would fork out $14 a day easily for a quick lunch out plus a sweet treat or a fancy coffee. That means a $5,000 a year expenditure that may not have been planned. This same amount if saved could pay for a luxurious one-week Caribbean vacation for 2 or a decent all-inclusive one-week Caribbean vacation for a family of 4. Imagine!

One last frugal tip that has served us well over the years is to be keenly aware of where our money goes. Sometimes just a bit of extra observation and a wee bit of effort could help you stretch how far your money goes. I remembered this tip when a few days ago, my hubby cleaned a path through our snow-laden yard so our gas tank for our fireplace could be refilled (sorry, terrible photos for this post). Here's the lesson though, my hubby had noticed that the company supplying the gas for our fireplace was coming every two or three months to top up our gas tank for our fireplace the first couple of years. Considering we hardly used our fireplace, that was like $8 to $10 worth of gas each time BUT with the ridiculous delivery fee of $25 each time. So, we were paying something like $140 a year for the little amount we were using. When my hubby called the company, he was told that if he did not want the automatic top-up service, he would then have to be responsible to call the company for service whenever we were low on gas. My hubby’s response? “No problem. I know how to read a gauge and dial your number.” That call was 10 years ago.

Well, yesterday was our first top-up delivery since that call. Yep. We are not big users of our fireplace. We put in on when we have guests and/ or on really cold days. We have not needed any top-ups till now when the tank was almost empty. The charge? $240 plus the delivery fee. So, can you do the math? If we had not noticed and simply chosen the automatic top-up service, we would have paid $140 per year for the last 12 years. That’s $1,680 spent, most of it on payment for delivery. Because we noticed and chose to add an annual reminder to our to-do list to check the gas gauge, what we ended up spending in the last 12 years on gas for our fireplace was approximately $280 (first 2 years) + $265 (yesterday) = $545. We saved a good $1,000 over the last decade. I find it good to equate this number with something I can see. This paid for perhaps half a dozen lovely date nights, or a couple of romantic weekend getaways, or a decent car seat and a nice crib or baby pram (if we were expecting) or a few good quality bicycles for the kids or several fun staycation days as a family visiting our own city and eating out. When I see it this way, I am more apt to choose more carefully, how I spend my money.

For the first 5 years of our marriage, my hubby and I carried the DINK status (double-income, no kids). We were two professionals, living in a simple one-bedroom apartment, with one car, saving up for our first home. When we bought our first home, we did so at a time interest rates were low. We took a 20-year mortgage, and we paid it off in 6 years, opting to do that instead of paying into our retirement because we chose to pay off the debt that we knew off instead of investing in a stock market that was not investor-friendly. The house price appreciated during our stay and when we sold it 12 years later, it was priced at two and a half times the price we paid. In those 6 years of paying off the mortgage, we still managed to take small local weekend trips for our annual vacation and two big trips to South East Asia.

Maybe I’m too calculative. This is too restrictive a life. Maybe it is. Strangely enough, my “restrictive” life enabled by frugal choices has paid for "bikes for the kids, date nights and romantic, and fun staycation options for the family" as well as huge trips to Asia every 3rd year or so. By the time they were 12, my kids, although never having visited the Caribbean like lots of Canadian families, had nonetheless swum in the warm, tropical seas surrounding famous islands in Thailand, Malaysia, and Singapore. They’ve also eaten sushi 🍣 in Japan, noodles 🍜 in Hong Kong, shortbread 🍪in London, and seen the deserts of Qatar (albeit at airports ✈️)

Reject what the world shouts you “must-have” and live with what you need and not what you want. Your older self will thank you.

Yes, this way of life is not for everybody. Delayed gratification is not something easy to appreciate. All I can do is share my lived experiences and be grateful that at such a difficult time as a world pandemic, I am debt-free and have a roof over my head, quite a long way from the life below the poverty line when I first arrived in this country.

PS - I would be remiss if I did not add that one of the ways we "saved" was to give our money away. Yep. A non-negotiable family tradition is to allocate a minimum of 10% of our gross salaries to charity. Here in Canada, that is a sizeable income tax return check back every year which we then put into our retirement fund. Donating our money keeps us disciplined in being good stewards of what we are given here and now. We imparted this to the kids as soon as they started receiving a very humble monthly allowance in Grade One. That first allowance came with 3 glass jars. One labeled "10% Charity" and the other two labeled, "20% Savings" and "70% Spending". We always made sure there was enough change in the make-up of the allowance so our kids could do the math and allocate the money accordingly into their jars.

PPS - nope, our kids did not always make good choices with their allowances but that is their own lesson to learn. 😊