Yes, I know that some people think that we are creating our own economic crisis by not spending the way we used to. But I believe that what is happening, even though it is tough and we will suffer, is good in both the short and long term. I think that as a society we were living way beyond our means and that an adjustment was long overdue. This is a great wake up call for this amazing country, and I'm sure that we will come out of this one pretty strong.
Now that our family is on its own, with no more payroll coming in bi-weekly, we realize how many things we don't need, how many things we could avoid spending money on, how little you need to live a great life.
Like many, living in the rat race drives you to buy that big house, that new car, the best vacation. Expenses grow along with your salary, your family, and your ego. Instead of saving more or investing in businesses that could generate income, we spend money on things that are a liability and, in many cases, that lose value.
Since there is nothing we can do about our big fat, rat racer LA mortgage, my wife and I have decided to analyze the rest of our expenses and cut where it makes sense.
Here are 5 things my wife and I are doing that I would like to share with you:
1- Canceled NetFlix ($30): Instead, we go to the supermarket and rent movies from Red Box for one dollar a pop. We figured that we would never watch the 30 movies a month that would make NetFlix worthwhile. And it gives us a good reason to walk to the supermarket together.
2- Sharing my car and loan payment and riding my bike more ($250): I have a car that has 6 years and only 35K miles on it. I rarely use it, and my mom didn't want to spend money on a new car. She is happy, and I'm sweating more.
3- Letting my wife go to Costco alone ($200): For some reason, every time I went to Costco I ended up spending $300. Half of it was in the electronics department. My wife is much more focused and goes straight to what she needs.
4- Canceled the gym membership; run at the park or beach ($45): It is fun, the weather in LA is beautiful (which is why we pay that insane mortgage), and you don't have to see all the people who are in better shape than you.
5- Eating at home more ($200): Because of this new situation, my wife added several new dishes to her list (of only 2 dishes before!), and they are healthy and delicious. Now that we are eating all together, she feels proud and we feel full.
There is one more thing we did that I didn't include in the list. For about 1 week we were saving on napkins by cutting them in half. The napkins ended being way too small, so we needed to use 5 pieces instead of 1 to clean just one finger. Minor detail, we bought a $250 paper guillotine to do this (...and other things) so half of our savings were spent. Yes, I know it doesn't make much sense, but transforming a rat racer takes more time than one economic crisis!