family of four spending

Buy Your Next Car Like it’s your Last.

One of the best ways to live lean, work lean and travel lean is to own a classic car. What?! Okay, about now you’re saying the Frug is nuts, classic cars are exotic, expensive and require lots of work. Well I’m going to debunk that myth and redefine the term “Classic Car.”

A recent Forbes article profiled Mr. Money Mustache, an early retirement guru. When asked about his top recommendations for early retirement, number one on this list was cutting automotive expenses. One eye-popping number in the article was the additional $150,000 he saved towards early retirement by cutting automobile expenses to a minimum. Yes, he still owns a car. (His formula, quoted in the article, says to multiply your weekly auto expenses by 752 to get the cost per decade)

I believe it’s possible to save this kind of money and, at the same time, drive a classic car that you enjoy. It really depends on how you define “classic car.” So, here’s my definition of a truly classic car. And seven steps to get you there.

It’s paid for. Pick up any personal finance book,( a few of my favorites here), and you’ll undoubtedly come across the great benefits of owning your vehicle and making it last. If you buy your next car like it’s your last, plan on paying it off in three years, that’s when the real benefits begin.
It’s at least 10 years old. There’s something about a great looking well-maintained older vehicle. These aren’t exotic cars, just your average, Fiat 500, Ford Bronco, Jeep Cherokee, SAAB 900. Look for cars with classic lines, a cult following, and basic features.
Bottom of the line. When purchasing a new or gently used car that will become a classic, you want to avoid a lot of bells and whistles. For example, GPS systems and satellite radio are largely being replaced by smart phones. Trust me, you don’t need all those extras. Fewer bells and whistles means fewer things that can go wrong later. As an added benefit, the smaller more efficient engines come standard in these vehicles.
You don’t drive it as much. When you add the time-related cost of commuting to the cost of vehicle-related expenses, the savings for a couple can be closer to $300,000 over a decade. Find a way to work from home more often, or bike to work, and you can make this number a reality much quicker.
Taxes and insurance are minimal. If you live near city with high insurance rates like I do, or in a state with personal property tax like I do, then you can cut costs further with an older car. Insurance companies use factors like monthly mileage and age of the vehicle. Personal property tax in states like Virginia is also based on vehicle age and value.
Know your mechanic (he doesn’t work at a dealer.) Auto dealers have very high overhead and a lot of these costs get passed through their service department. Do some research on Angie’s List or ask around and find a good mechanic who works out of a independent bare-bones operation. If you’re turning an old Audi or Saab or other imported vehicle into a classic, look for specialists who work independently on these brands and come highly recommended. You can start on craigslist and yelp.
It’s the only car you drive so you keep it in like-new condition and track its recommended service intervals on a mobile app or website like www.driverside.com. Most of those dire warnings about older vehicles becoming money pits are from people who drive too much or treat their cars like garbage dumpsters. TLC will get you that extra 10-15 years you’re looking for so you can look forward to driving a classic!

Next time you see a great-looking classic Datsun 280Z or Jeep Wrangler, take a close look. That could be you behind the wheel in your completely paid for classic car. You’ll also be part of a tribe like the “SAAB 900 Tribe” or the “Ford Bronco Tribe.” People will stop you, ask you about your classic car and admire your great taste. Start now, after 10 years, your like-new car will start to look like a classic, in 20 years it will be a classic. All that money you saved on car payments, insurance, and taxes will be in the bank, working for you.

My 10 year old Audi A4 is rapidly on its way to becoming a classic. It doesn’t look a week over five years old and paid off 7 years ago.

Have you turned an everyday car into a classic? I’d love to hear your story.

Stop Getting Shaved on Razors

10/13 by The Frug Leave a Comment

What in the hell goes on with the cost of razors? I mean, before I truly embraced my Frug muscles, SuperK and I would get our razors, like many people do, at the grocery store or maybe Target. I was buying various Gillette razors like Fusion Pro Glide and Kelly was buying a variety of individual high-end disposable razors. Just the Gillette Fusion refills run $26 for an 8 Pack!

The women’s Venus disposable razors my lovely wife SuperK was buying were equally as bad $22 for a six pack – with with the added insult of filling landfills with a perfectly usable plastic handle each time you were done with said disposable razor.

It’s one of those small purchases that a lot of people don’t think about. It just gets chucked in the cart with the rest of the groceries or shampoo. Then I saw this video about the Dollar Shave Club along with the 12 million other people who watched it. The video was great and it really helped expose how ridiculously overpriced razors are. Once you get to the site, you’ll find that the decent razors are actually six or nine dollars per month, per member. That’s a big savings over drugstore or even Amazon prices. However, it’s a “club.” Basically, a club that requires monthly payments.

This was a problem. The Frug Hates Clubs, especially any club that requires a monthly fee. In my opinion, the only type of recurring revenue people should have in their life is incoming recurring revenue, not outgoing. All of these clubs really start to add up. Think about it, Microsoft Xbox $9.99 a month, shave club, satellite radio club, all billing you every month forever, regardless of whether you use up the services or not.

So, I was not joining another club. I did a little research and found the the company that supplies most of the Dollar Shave Club’s razors. The company is DorcoUSA. I know, pretty weak name but fantastic razors for men and women, and even better prices.

I just loaded up with a six months supply of razors for myself, my wife and my teenage son for $33.35. This year, I’ll spend about $90 to keep the family in razors. For the three of us to join a club for a year, it would be over $215 for the medium priced blades at Dollar Shave Club and over $390 at a box store like Target.

The great news is that these are better quality shavers and a lot of the specials even include the occasional new razor with cartridge refills. Check out our latest order and compare this to what you’re paying.

SuperK even found that the men’s quad razors work better for her than the women’s version. Here is a link for 15% off your order. If this offer stops working, let me know in the comments below.

Feed The Pig

09/13 by The Frug Leave a Comment

This photo does not do justice to SuperK’s seafood gumbo. It tastes even better the next day. I’ve always been a huge fan of leftovers. In our family, groceries are our second-largest expense, so as The Frug, I am always going out of my way to make sure nothing goes to waste unless it’s absolutely necessary (mold growing on it, stinks, slimy to touch etc.).

The average family of four in the US spends about $1025 a month on groceries. In urban areas, like the DC Metro area, this number is closer to $1250. My wife SuperK tells me our grocery bill is even higher due to the fact that we eat lots of Meat, Seafood and other high protein delicacies.

So, it’s a bit of a conundrum to be a Frug and still really enjoy giant lumps of crabmeat floating in your gumbo! One way we like to deal with this is maximizing the leftovers. Years ago, I came across the website http://www.feedthepig.org/. It has links to some simple calculators and ideas to put your savings in high gear by skipping all kinds of things, including expensive lattes, $13 lunches and premium cable plans. Feed the Pig also lists all types of expense slashing ideas (by habit) to help you reach your savings goals.

Replacing some lunches out with leftovers is a great way to do this. One big advantage of working from home, or an office with a nice fridge, is the ability to really tap into the leftovers and skip a few lunches out a week. You’ll also find that, if you do it right, most of the leftovers will be a lot healthier than what you might find at that gourmet burger joint or KFC.

Here’s a quick look at some results from the lunch calculator. Notice I still eat out once or twice a week. The key message here, is that you start to apply these frugal tools to other expenses in life, like a latte-a-day habit or shoe addictions, you can really start to see results. As you get closer to financial independence, you’ll find that you’ve applied this type of thinking to many parts of your daily life and have started putting those dollars to work for you. Keep in mind every dollar that you save and invest will continue to work for you and produce returns year after year long after you’ve stopped working for a paycheck.

21 Things My iPhone Replaced

08/13 by The Frug 2 Comments

Most people would think one of the worst money-saving tips I could offer would be to purchase an iPhone. We constantly hear about expensive Apple products, overpriced data plans, unnecessary upgrades, monthly overages, wasteful app store purchases and how overpriced smartphone plans are in the US versus Europe and Asia.

Yes, the Frug family has 4 Apple devices on an AT&T family plan, three iPhones and an iPad. True, the bill does make me cringe, especially the three different types of telecom tax. The phone and the taxes add up to about $55 per device per month. That’s not really what this post is about.

I was recently trying out Listly and created a list of all the things my iPhone replaced. I have dropped in the list below. Basically the iPhone since its introduction in 2007 has allowed me to get rid of a lot of stuff including some of the worst kind of stuff that has monthly recurring fees.

You’ll be able to tell from the list that I’ve always been a bit of a gadget addict. The iPhone is really helping me with that, replacing 20+ gadgets with just one and using free apps to do all the work. I mention a few of these apps below.

Here are some big items right off the bat.

Landlines – I was going through some old files the other day and came across some of our old phone bills. $65, $120, $85. This was back in 2006 when we were still using a landline and then later digital on Comcast, Vonage etc. My home number is now my iPhone and I give out a Google voice number to solicitors, websites, banks, etc. My wife does the same and we list each other as emergency contacts. If someone leaves a message on our Google voice number we get a nice transcribed email we can delete. We used to get calls at 6 PM every evening like everyone else. Now silence.

International long distance – We travel a good amount and I remember international long distance charges anywhere from $120-$350 per trip. That quickly added up to over $1000 per year. True, some of this was business-related, but as a business owner it was still my expense. I now use the Skype app or Facetime via hotel or restaurant Wi-Fi. It’s gotten a lot easier since I first tried this out in a Starbucks in Mexico. On a recent trip to Barcelona, I had daily FaceTime calls with the family, total international long distance cost $0.00. Only problem with FaceTime is that even my youngest can tell when I’ve had a few beers.

SiriusXM Satellite Radio – Satellite radio had ratcheted up to about 19 bucks a month before I discovered Pandora on my iPhone. Now can I can listen to truly commercial free music via Bluetooth. The iPhone automatically connects when I get in the car and any calls that come through pause the music. The music and calls are delivered via Bluetooth over the cars sound system. I just needed an adapter installed for my radio. The quality of Pandora and iTunes over Bluetooth to my car stereo really surprised me. I find it to be better than CDs or HD FM radio. Savings of about $200 a year after the annual pandora fee is subtracted.
Garmin GPS – The iPhone replaced my handheld GPS unit. I really enjoyed it for hiking, finding my way around strange cities, even on the water. Problem was it required CDs, expensive downloads that only worked on a PC, international city packs etc. etc. I understand that some GPS units even had a monthly fee. That’s all gone now. Not only is the iPhone a fantastic GPS device, it’s apps integrate information sharing like speeding cam locations on WAZE. WAZE should save even the most conservative driver a ticket every few years or find you a great local diner with low prices. Google maps free GPS is the best I found and, most importantly, covers walking and cycling directions that the others don’t. For hiking the everytrail app is awesome as you can share and discover great walks.There are a ton of options for hiking and running these are just a few.

When I add all this up and multiply it by several family members, I really believe the iPhone allows us to get rid of a lot of stuff. See the full list below and save a lot of money on unnecessary monthly fees that creep onto your credit card bill every month.

As I look at the list below I also realized all the time that was necessary to deal with all this stuff, racks of CDs, busted digital cameras and video recorders (now we just bust the iPhones) annual BS increases in satellite radio fees, and landline or digital long-distance fees. Lots of extra crap to pack when traveling like headphones, books, magazines, cameras extra batteries, etc. All replaced by an iPhone.

The message here was that the iPhone is worth every penny of the costs as it is something I use every day. And as a bonus it actually saves me time and money every month.

Live Lean. Work Lean. Travel Lean.

This camera took great panoramic shots. But used traditional film which sometimes I rarely got around to ever getting processed. I love photography and the idea of film but I found the best camera is the one you always have with you. iPhone. And I can also get a great panoramic shot as well.

Upvote

If the full list doesn’t show up in this post you can see it here. http://goo.gl/65hced

Let me know if I missed anything. What has your smartphone replaced lately? Please add your comments here.

Are you an energy hog? Track and compare your electric, gas, and water usage with friends and neighbors.

07/13 by The Frug 5 Comments

I’ve been using a great service to track our family’s energy use over the past few years, myenergy.com . The service recently got a makeover and is now a Nest Company. Nest makes those high-tech energy saver thermostats. As you can see, The Frug is not so frugal when it comes to energy usage. Looks like our family of four is spending double what the average energy user in the area is spending. You can track by total bill, or in the case of electricity, actual kilowatt hours. You can also track and compare with your neighbors or with friends anywhere in the country. Either way, we are off the chart. I still get quite a few complaints that the house is not cool enough. The source of the complaints is a two level heating and cooling system linked to timed zone thermostats downstairs and upstairs. I have them set up to cut off the air conditioning downstairs when no one is around and vice versa, upstairs. I need to reprogram them every time daylight savings rolls around and even need to get the system rebalanced occasionally! All of this to spend more money than my neighbors!

I think many people including myself focus on the heating and air-conditioning, but don’t realize how much energy appliances and electronics consume. A few years ago I read that cable boxes use more energy than an average size refrigerator even when the TV is off. We’ve gotten rid of all of our cable boxes, soon to be followed by the cable company. More on that later.

I’d be interested to hear what other folks spend on their electric or gas bills. I must say that we’ve done much better on the gas/heating bill over the past few years. I’m going to be sharing other family of four stats on this blog. A lot of the economic reports include great detail on family of four spending. I will be trying to get to the bottom of why our family of four spending often bears no resemblance to the stats. For example, I am continually blown away by the amount of water we use for a family that doesn’t water the lawn or have a pool. Is our water meter rigged? Do our toilets run all night? (They don’t. I did the food dye test) There are also the families that spend way below the averages, this is where we want to be. Mr. Money Mustache publishes his family’s entire budget. He was recently featured in the Washington Post. People around here have really had a hard time getting their heads around how he pulls this off. It’s good reading.

Example of some of the charts on myenergy.com. As an added incentive the service is free and you also get points for lowering your energy bill.