Saturday, September 25, 2010

Cheapskate! Yes, that's me

A few weeks ago, a U of Chicago law professor wrote a very silly blog about how hard it is for his family to live on their "a bit more than" $250k income.  And how Obama's proposed tax hike for the rich would put them over the edge--maybe even force them to sell their house and cars! 

As many, many have pointed out, he's ridiculously whiny.  He is also ignorant about how tax hikes work.  But the blog generated some great discussions.  And Mommy/Prof had an interested blog on living below one's means.

We're pretty good about living below our means--slightly below our means.  In addition to our jobs' mandatory payments to 403b or pension funds, we max out our Roth IRAs and put some into our kids 529 accounts.  But more would always be better.  My significant other has rather substantial school loans to pay off; we've barely made a dent in them yet, even though we pay more monthly than required.

Now that my daughter is in kindergarten, we're saving about $300/mo.  Plus, it looks like we'll have about $120 - $360/mo less in medical expenses for her this year.  Big bucks!  I better dedicate it to savings before it magically evaporates. 

Now, what about actively saving money?  I have to say that although we bought a house within our means (according to sources like Money magazine), I often think life would be easier if we had a less expensive and smaller house.  House-wise, there is a lot to be said for living below your means.  Less house = flexibility.  Flexibility to move more easily, to make less money, to spend more on vacations, to save more for retirement.....

We've had some great money saving methods, some of which have gone by the wayside.  I only recently started paying someone to cut my hair.  For at least 15 years, I cut my own hair.  It didn't always look perfect, but it didn't always look so great when someone else cut it either.  I also cut my kids' hair.  A conservative estimate: $2780 in hair money in the bank! (See below for details).

What else?  We don't often buy coffee to go or buy lunch at work.  What if we each had one additional coffee ($2) and lunch ($8) per week for the last 15yrs: $15,600!  OK--even I am shocked.

We didn't have cable for our first 12 years: $10,800 in savings.  I have to say, $10,800 was more than worth it.  I wish we didn't have cable now, but I'm over-ruled.

I've been yearning for an iPhone for the past two years, but I'm too cheap.   But what if I, like my sister, my grad students, and the instructors in my dept, weren't too cheap?  $2160.  Wow, that's close to all my hair money saved over 15 years!

And we buy used cars and drive them until they almost die.  One car is a 1999 and the other is a 2003.  Savings are hard to calculate in this case.  What if we had gone through one additional car (purchased used) in the last 15 yrs?  Conservative estimate: $17,000.

I almost forgot to add in the money I save not paying for campus parking for the last 4 yrs (I have a free bus pass from the university): $1680.

Just for those cheapskate ways mentioned above, the savings is about $50,000!  While we now have the dreaded cable, plus I indulge in haircuts every 4 months or so for myself and my son, these calculations have renewed my commitment to continue to save in the other ways. 

Very important point: my cheapskate ways do not involve a lot of time/effort on my part.  Haircuts can be a pain, but when you only cut your/kids' hair every 4 months, it doesn't add up to much time. Particularly if you calculate the alternative: making the appointment, driving to the salon, waiting, PLUS the haircut itself.  And while our cars age, we love to take the bus to work.  I get an extra 40+ minutes of work done on the bus every day!  Cable TV, as we all know in our heart of hearts, is a huge time suck.  So is having an iPhone--I really should not have 24/7 access to the internet and email.  And I think that half the reason I don't buy a coffee on the way to work or eat lunch out is the extra time involved--I usually eat at my desk.

I can't decide if all this makes me feel better or worse for spending $460 on trees and tree supplies today..... At least it isn't a habit of ours, blowing money on our landscaping.

Homemade haircuts: $35 x 4 times/yr x 15 yrs = $2,100.  I also cut my son's hair: $17 x 4 x 8yrs = $544.  My daughter: $17 x 4 x 2yrs = $136.  Total: $2780

One additional coffee ($2) and lunch ($8) per week:  2people x 15yrs x 52wks x $10 =  $15,600. 

Cable: 12ys x 12mos. x $75/mo = $10,800.

No iPhone: 2yrs x $90/mo x 12mos = $2160. 

No parking lot fee: $35 x 4yrs x 12mos = $1680.  Yes!

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