I’ve honestly wondered about how much our frugal living saved. Let’s do the whole math breakdown and find out!
Our brand of frugality is pretty typical (to a little extra strength) in the accumulation phase. My general belief is if you optimize and cultivated self-introspection so that your inner lives and inner mind are rich then whatever is on the outside matters less and less. I have always tried to pride myself on trying to be resilient and that’s because I cultivated within because my reality was bleak for a long time. If you grew up like me then you will understand that one of the “perks” of that is learning how to entertain yourself and developing a very rich inner life by closing your eyes.
The rainbow bridge of frugality varies a lot to different degrees. Our brand works for us but not for others, and there ain’t nothing wrong with that.
Not everyone is going to understand saving or intentional frugality because a good sum of people grew up accustomed to the middle-class comfort and set that as a baseline.
Being foreign-born, I was put in a different reality. It kind of reminds me of that saying, “What is normal for the spider, is chaos for the fly.”
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Our Brand of Frugality
How we live our life is what I define as our brand of frugality, everyone has their own because everyone has their own comfort zone.
For us specifically, you can check out all of our monthly budget expense and financial report here.
They say a penny saved is a penny earned, but so is a penny not spent. Then the other saying…” saving a dollar is worth more than a dollar earned.”
’cause eeek, TAXES! Especially if you’re higher on the income totem pole.
So I went back and did the rough AGI figures too which is about overall 25% for us. That represents the more realistic numbers I’m going to summarize. It is absolutely necessary to calculate the pre-tax number because…dude, there is no way anyone could fully escape the Tax Man.
Not sure if Slender Man is scarier or the Tax Man?
…well, one of them we know is definitely real so… 🙂
Moving onto the numbers, I went fairly conservative with my figures. I’m thinking of a good to fair case scenario using the national averages of what I can find.
Notice the first 3 highest and most flexible expenses are housing, transportation, and food. We are going to do the top down budget route!
Highest expenses first and smaller expenses for dessert, now let’s start hacking!
Our mortgage, home insurance, and extra utilities come in at about $25,000 a year. Since we host on Airbnb full-time that means we technically live for free and earn some extra money along the way too. Because we make a surplus on Airbnb from just long-term rentals, conservatively we are making more profit and covering more than mortgage etc. Like about $34,000 is the projection. That’s the most likely estimate I’m getting this year so far. But let’s just use $23,000 for simplicity sake and work from there. As a business owner with tax perks but also more taxes because I’m covering for my own FICA, SSI etc. It gets confusing fast.
It’s not all about the money, of course, we met some really cool people who love animals and Grace (our fearful dog) is much better with people now than being scared to death of them before from her crappy puppyhood.
One lovely multi-level house in picturesque Seattle pimped out to some of the friendliest people I’ve ever met from all around this blue planet:
Amount Saved = $23,000
Amount Needed to Earn = $28,750
? Related Reads:
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We don’t own a car.
My husband gets free public transit subsidies from his employer so it currently cost him zero dollars to go to work. He doesn’t have to sit in rush hour traffic and instead he’s using that time to read about the FX market or taking a nap.
There are 2 rental car companies within a 15-minute walk from our house which gives us ample wiggle room to choose from when we do need a car for a day trip. We pay a one-time $50 fee when we need it once a month. Everything else we need is nearby within walkable distance.
Every time I tell strangers that most people think it’s because we’re ultimately broke.
Pffft hahaha, hiding ‘broke’ in America is probably the easiest thing to do right now. People don’t see how damn cheap credit is these days. I’ve consistently wondered how banks keep giving people credit so irresponsibly.
No sweat off me, I’m not anyone’s financial fairy godmother.
I digress, I’ve done the car math ten times over. Too bad not enough people do! If we get a car “justifiable” to our income then we can get an electric car like Tesla for $90,000 that is cheaper to run and lower maintenance too.
But then there is also Washington’s high auto tax for luxury purchases like Tesla. Property and auto tax is pretty high in Washington because we don’t have state tax so our property and auto make up for it.
OH, then there’s parking!! Parking space is essentially an empty space of ground with 2 adjacent verticle lines…it’s highly coveted for off-shooting reasons. Finding parking close by work is preferred because it’s safer from the break-ins that are becoming more common as you move away from clustered parking centers. That comes with an optional price tag of about $200 a month.
Then there’s the question if I needed a car myself too…is it fair that hubby gets one and I’m sitting at home with nothing but all the liabilities of pets and an elderly person? What if there was a medical emergency with my dog or my dad?
But let’s say we’re frugal even when it comes to cars and buy just one used second-hand car. Include the purchase cost of a single, used, cheap, smaller sedan gasoline car in Seattle will cost us $600+ a month for 60 months going fair on the maintenance factor, not too $$$ car, and getting the cheap gas at Costco.
The scenario of one single cheap used car with a $200 monthly parking permit and lukewarm insurance bundled with the home because that’s how they like to sell to the masses:
Amount Saved = $9,600
Amount Needed to Earn = $12,000
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Hahaha, work in progress. Dining out is not something I’m uber frugal about when I know it’s possible to live off $300 and not dine out very much if at all. Groceries we have nailed under $200 but that’s because we have a biggggg budget for dining out.
Unlike many other things, I can understand how to rack up $1,000 in monthly dining out. We’ve probably done it before in our Pre-FIRE days. Sushi $65, three times a week and some pho here and chicken fried steak there…and poof the budgets gone.
If we were instructed to spend without revealing any price tags attached, trust you and me, I can pig out to double that very easily if you just let me unhinge my jaws.
Our dining out bill averages $350 a month which is not super frugal. We can make an effort to NOT dine out at all (ie. that month we lived on $300) except we don’t because it’s not worth it. The redeemable thing is we are financially sound.
I’ve made that decision before and I still stand by it fully understanding this: food is probably the biggest expense with zero possibility for future returns.
If you splurged on a nice big house in an expensive neighborhood, at least home prices pace up equally which means you’re getting some of your money back especially you owned it long enough.
If you let me free range dine out, the only thing I can turn that money into a trip is a trip to the bathroom 😀
(Fun fact, my friend Soapy and I held a chicken nugget competitive eating contest last year in front of some of her friends. We each purchased 120 nuggets each and I ate about 60 to 70 nuggets. I don’t remember her count but I naturally killed her. Even her mom told her to never doubt a skinny bitch when it comes to eating a conspicuous amount of food.)
My guilty-food wish is to spend $1,000 a month on eating out someday. Maybe in the richest phrases of fat fire… In August, we spend about $350 on dining out so we’re “saving” $650.
I do feel a little bad about that…that’s me with self-control frugal brothers and sisters. Our grocery bill was under $200 because it was all spent on dining out haha.
I maintain eating out as the hobby…I wonder if I can talk my husband into setting tacos into entertainment…
Frugally I’m trying, seriously this is me trying, this could get a lot worse, don’t even doubt me for one single second I can eat circles around your humanly fragile appetites:
Amount Saved = $7,800
Amount Needed to Earn = $9,750
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Aha! My entire life prepared me for a low budget in finding the best frugal entertainment. All of my fun is going to thrift stores (hey big spender, NOT!)
After a lifetime of no money, you find very odd, unconventional obsessions…is what I’ve come to notice hah.
The average American family entertainment budget is $2,482 annually which is about $200 a month. I’m surprised it’s not more…the cable packages are pretty pricey at $100 per month for my in-law family, as I recall.
We came through with a lot of entertainment surpluses last year. In total, we spent $837 for 2017’s budgeted annual compared to an average American family at $2,482. That means we retained a $1,645 savings.
(P.S. Download Google opinion rewards so your survey credits can apply to buy whatever you want in the Google Play Store for free. That’s how we get shows, movies, books, and audiobooks in addition to the local library we use.)
If you have an odd personality, you don’t need to seek the outside world for entertainment because you KNOW you’re a true freak and not much the normies do interests you 😉 AMEN
Amount Saved = $1,645
Amount Needed to Earn = $2,056
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Dealing with just internet and phone here. Targeting the smaller size expenses now might not be as worth it as the big three above (food, house, transportation) but it’s about being selective with what matters for the least effort.
My husband work often enough that he qualified have a huge portion of our $60 monthly home Internet bill waived. For simplicity, we just consider it paid for. His phone and plan are provided by work if he promises to use it for work (which he does.)
We ignored switching our phone plan out of laziness and only started last month on a lower plan.
The normal individual’s cell phone bill is $71 per month which jumped from 2009 averages. I was paying $35 for my plan which I thought was good…nope. I ignored switching our phone plan out of laziness and only started last month on a lower plan. Going forward my plan will be ⅓ of my AT&T charge with Red Pocket. Overall, it is a $20 dollar per month savings, every month going forward from now on.
For us, it’s $60 (internet) + $20 (phone) = $80 x (12 months) saved annually.
You pray and pray and pray and pray and pray for Google Fiber to come to your stupid freaking city but nooooo, Comcast and AT&T is a monopoly and we will never be freed from their greedy clutches.
Amount Saved = $960
Amount Needed to Earn = $1,200
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Personal Care + Apparel
According to the 2016 BLS results, American households spend $1,803 on apparel and $707 on other misc personal products which both total $2,510 annually.
Our personal care budget in 2017 totaled only $425 for the entire year which means we spent approximately $2,085 LESS compared to the average American household.
Fairly often, our personal care budget has come in a $0. Last month in August, our personal care budget was -$8 because I ended up returning a pair of shoes to a department store.
We choose to forgo new clothes and instead opted in for heavily discounted ThredUP and thrift store clothing. Go the home haircut route for all 3 of us and just spending time researching how to cut a style properly. Doing our own manicures…if you recall that I give my husband manicures because he likes them haha.
In terms of a gym membership, my husband uses the free gym amenities at work three times a week. I walk and dance every single day, sometimes I work out up to 3 hours which totals about 20 to 25 hours a week I’m on my feet. It’s all YouTube sponsored content and besides the huge toll I’ve done to my worn down carpets from all the friction, it’s been all for free. 🙂
Being low-maintenance and pretty hot looking people by default is frugal because we don’t have that much ugly we have to hide (OH right, Internet, this is sarcasm!!!)
Amount Saved = $2,085
Amount Needed to Earn = $2,606
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Health Care, Home Maintenance, Vacations, Vices, Pets, Utilities, Miscellaneous.
Uhhhhhh. Hm…well. Nearly every light bulb in our home is energy efficient. We have double paned windows. Our appliances are energy star efficient…blehhh nelly, OK, way too difficult to quantify what the amount we are saving here is…so let’s just brush ALL this off out of laziness.
I know we’re much much under the average for vacations, pets, vices and miscellaneous. Way, way under the average for our income level that’s for sure but useless without a solid benchmark.
*Healthcare…I have no clue. We have a good plan and hubby’s employer pays the lion share (woo~) but it’s a crapshoot to compare something like network, coverage, and copays.
*Home maintenance…uh, dude we try when we can but I don’t foresee my husband redoing our entire 3rd story roof anytime soon. I don’t think we’re super duper cost saving here when it comes to water heaters and the big scary things…so this is a wash.
*Vacation in 2017 for us was $1,035 while for the average American household spent anywhere between $1,457 to $4,000+ depending on size and where they went. We’re shaving a fat chunk off :).
*Pets…we might come very slightly under the average so it’s still a wash. Average single dog ownership is $1,500 for the first year…it was under $1,000 for us in our first year – including having Grace professionally trained by police. Then $500 is the average cost for the subsequent dog years…for us 2017 was $493 for Grace and my pet rabbit so we’re very slightly under. Still a wash.
Then there are the miscellaneous expenses…that’s a total crapshoot too for most Americans. For us, we track EVERY SINGLE PENNY and rarely use cash, so our misc are never crazy. I say we’re shaving at least $1,000 off here but no solid benchmark to put it against 🙂
The numbers of $$$ “saved” is already big enough for me to settle how much our brand of frugality can pinch even without any of these other ugly “math-y” expenses above so let’s just label it as all a wash.
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Summary + Results
So we’re saving $45,090+ a year in expenses by living our Brand of Frugality. In order for us to save that $45,090 net, we would need to bring in over $56,000 income because of the taxman.
Which is interesting because…
Category Net Gross Housing $23,000 $28,750 Transportation $9,600 $12,000 Food $7,800 $9,750 Entertainment $1,645 $2,056 Connectivity $960 $1,200 Personal Care $2,085 $2,606 Health Care, Vacations, Vices, Pets, Utilities, Miscellaneous. N/A N/A Too messy to quantify so N/A but probably $3,000 more shaved off. Total Saved $45,090+ $56,362+ Dude that's the MEDIAN U.S. income!!!
It’s interesting…because the overarching median household income in the United States is $56,516. That’s someone’s entire annual paycheck that we’re knocking not very far from.
HAHAHAHAHHAAH coincidence?! I love it.
It’s like we added another whole income stream by doing very little when that’s someone’s entire 9 to 5 annual salary.
What we do is what not many people can do and the majority of people don’t have the discipline or forethought to do. I’ll just point to them what was conserved, increased, sacrificed, and how we have structured our lives to streamlined financial independence to come quite a few years earlier.
[Ends post on maniacal laughter]
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Tash @ SSE says
Love this way of thinking about it! It feels less like depriving myself and more like earning additional income for my future. Thanks for breaking it down with your examples.
Dan K says
I liked the way your broke all that done. Must have taken some time and energy to figure that out. Loved the outcome. Now I have to check out how much we are saving!
I tried 🙂
Ms. Frugal Asian Finance says
These are super cool numbers right there. I never thought about calculating our savings this way. It’s really refreshing and inspiring! You guys are doing a great job stacking up the cash and building wealth! 😉
New mommy!! Baby update! 😀
Joe @ Retire by 40 says
Man, I’m jealous. You guys are doing so well in your 20s. I wish I got a really great start like you did. You guys are doing ridiculously well.
I think you overestimate the car a bit. People aren’t paying that much to drive every year, do they? We pay maybe $2,000/year on average and it’s going down as our car ages. Oh, I forgot we have one car. I guess if you have multiple vehicles and enjoy driving newer cars, you’d spend that much per year.
Anyway, really great job living a frugal lifestyle.
What? Joe you kicked ass in your 20s by increasing your income and landing Mrs. RB40. I was following after you guys example duh LOL! Even your pre-FIRE days were pretty frugal.
I included the cost of buying the car we would get ($15-$20k on a fair car) and pay it off in 60 months like a normal car loan.
Dr. McFrugal says
Wow. This is definitely eye-opening! Great work in saving the equivalent of the median salary in America!!!
And thanks for the Google opinion rewards. I’m going to try that out!
It differs depending on where you go. My husband gets more surveys than me because he leaves the house more. I currently have $22 though 🙂 they pay 10 cents to 30 cents per survey.
As usual, you are my frugal heroine. Good job in the food budget. That’s amazing, even with the going out. 🙂 It would be cool, but not practical out here in the ‘burbs, to not own a car. But given that I could get groceries shipped… we could probably easily make due with one car, since both of us work from home. I’ve suggested it but Mr. ThreeYear’s not buying it. He wants the freedom to drive away from me when he needs to! 🙂 Congrats on all the savings. That’s a lot o’ cash.
Gracias ^^ Hahahaha oh that’s a perk of a car! You can go for a drive to calm down haha
Angela @ Tread Lightly Retire Early says
Those vacation numbers seem super low. Or we just spend a lot on travel haha. And like nothing on entertainment/clothing and very little on housing/transportation, so I guess it works out.
That’s what I thought too! I think it’s the average so you mix people who can’t afford and don’t try to afford any and then people who can’t afford much but still goes big on it.
The CFO says
This is a really great analysis. The finance geek in me was overwhelmed. Lots of smart tips in here on how to save while still spending 🙂
Haha thanks, I know I am the worst at selling this information >_<
Accidental FIRE says
Not owning a car, besides being the second biggest money-saver in your analysis, also makes you very healthy and contributes to society the most. It’s a boo-yah lifehack!
LOL boo yah life hack hahahaha
Isaac, Live Fi and Free says
This must have taken forever to write up. Excellent analysis. With our lifestyle we couldn’t imagine living without a car! Thats really cool.
It didn’t take long, I was just word vomiting but the formatting was bleh to mess with.
I really like the frugality mindset you guys are having. We’re doing some of things you guys are doing now but wished I had that mindset when I was in my 20s. Whoa dude…70 nuggets!?! Is that Mickey D’s nuggets? I remembered when some Pho restaurants would do a pho challenge where get to eat for free if you finished 10 pounds(broth, meat and noodles) of Pho and have a picture up in their restaurant.
Yes Mickey D ones haha. Did you do one of those pho challenges?!
Independence Engineered says
Love hippo’s new painted nails!
Did you consider buying a Nissan Leaf instead of a Tesla? Perhaps even more saving there because you won’t have the luxury tax.
Since you brought up the electric car (shameless plug), I helped my friend look at the cost of switching over to a used Nissan Leaf!
Yes we did!! We almost got one back in 2016(?) because there was a flood of them after the tax refund. Anyway, we had our choice but we didn’t need it so we decided no car. It’s not always about money, I think our location suffices 🙂
The key is that you are living your brand of frugality without any perceived sacrifice or hardship and that’s the key.
You eat out when you want and looks like you eat well when you do from the photos you put. That’s my big vice as always. I can always justify eating out at an expensive place for the experience it provides.
Well if you ever break down and consider a tesla let me know. I have one and it is an amazing car. But where I live nothing is walkable and no real public transportation
I think Tesla’s a pretty strong choice if you need transportation! The maintenance is lower than gas cars overcomplicated underbelly 🙂
Where are your food pics doc?!?
Sarah | Smile & Conquer says
That’s incredible, way to go you guys! You almost have me convinced that I should go all out on the frugalness (minus the eating out because that’s also my weakness). I’m definitely in reducing expenses phase right now as we ended up spending a bit too freely this summer so it’s time to get back on track.
No one should go all out if they’re miserable! I can’t control eating out without any fire under my butt too haha.
Marissa | Squirrels of a Feather says
It is really astonishing that you save what the average American makes annually…but then again, the average American also has a staggering amount of debt. If I am ever in Seattle, I want to challenge you to an eating contest! I am a fellow skinny chick who eats a lot…way more than my hubby. I trounced a bunch of beefy guy friends in an eating contest at an all-you-can-eat sushi place in Chicago once, and they declared that I defy at least 3 laws of thermodynamics. 😉 I really like your writing style, it’s like talking to a sassy friend, hahahaha.
I AM SASSYYYYYYYYY haha. I accept your challenge!!
Marissa | Squirrels of a Feather says
I’ll hit you up if I ever get over there 😉
I am new to the blogging work. I was listening to your interview you did a few years back on ‘Do you even blog’ podcast. Today I am here. I love your material Seeing you started having no Clue about blog it somewhat relates to me. Quick note I am not able to access your monthly budget and finance repost.