I could find $12,000 per year if I had to

June 13, 2008

A few days ago, JLP came up with a list of things he could give up to find over $13,000 if money suddenly became tight. He encouraged readers to come up with their own lists, so I thought that I would share mine:

  • Fewer organic groceries. I buy lots of organic and hormone- and antibiotic-free groceries because we can afford it. I don’t know if it’ll make a difference in the long run, but I figure the fewer unnecessary chemicals and particles that end up inside my little boys’ bodies, the better. But if my husband or I (or both) suddenly lost our jobs, this would be one area where I know I could save thousands of dollars over the course of a year. I currently spend $100 to $150 on groceries each week, mostly at Trader Joe’s, but I could cut that to $50 per week with sales and coupons at Ralphs. That would reduce my grocery spending from the $5200 to $7800 range to $2600 for one year, for savings of $2600 to $5200 per year.
  • Eating out. My husband and I buy lunch at work more often than I would like, and we get fast food just about every weekend simply because the kids have to get out of the house and it’s more convenient and less stressful to eat on the go than to try to keep them engaged in a constructive activity while I whip up breakfast, lunch or a snack. All of this would change if we didn’t have any disposable income (I’m trying to change it anyway). If we completely eliminated eating out, we would easily save $2600 per year (average of $50 per week).
  • Stay closer to home. We live in the Los Angeles area, with access to just about everything. And since we have two young boys that we have to entertain, we go to lots of places. Earlier this year, we went to Disneyland and California Adventure, over 40 miles away, within a one-month period (for the price of the Disneyland tickets, we were able to get into California Adventure on a separate day). We go to the beach, almost 30 miles away, every weekend when the weather permits. We frequently visit the Aquarium of the Pacific, over 35 miles away. Our boys enjoy these trips, but with the cost of gas over $4.50 per gallon for premium, we would drastically cut down on driving if money were an issue. (In fact, my husband and I were just saying that we’re going to have to start considering whether our destination is worth the transportation cost.) Assuming we take one 60-mile roundtrip each weekend at $4.50 per gallon and 25 miles per gallon, eliminating that would save us over $550 per year. We would also save about $250 in admissions and parking costs.
  • Buy fewer gifts. My husband and I love buying gifts for each other, and we spend a pretty good amount of money on gifts for others as well. Gift giving makes us very happy, but we could and would stop if we couldn’t afford it. Annual savings here would be around $2000.
  • Buy fewer toys. As my husband put it during the last holiday season, every day is Christmas for our oldest, who turned three earlier this year. It’s not that he gets a new toy every day, but new toys definitely aren’t reserved for holidays. New toys serve as rewards or distractions, but we could definitely cut back on how many the boys get. I would estimate annual savings here at $400. My husband and I each have a fairly small whole life insurance policy. If I knew back when we got them what I know now, I probably wouldn’t have gotten them. But we plan to keep them forever, so in the long run, it should work out fine, since the premiums will stay comparatively low as we get older. In the meantime, however, if money became tight, we would stop paying the premiums. The investment portion of the policies is sufficient to cover a couple years’ worth of premiums, and our insurance agent once told me that if I didn’t pay the premiums, they would simply be deducted from the accumulated value and the policies would remain in effect until the accumulated value could no longer cover the premiums. Not paying the premiums on these policies would give us savings of about $750 per year.

That gives me total annual savings of $9,150 to $11,750.

If I paid for cable, I would cancel it, but since it’s included in my homeowner’s association dues, that would have no impact on my expenses. Unlike JLP, I’m not willing to give up my landline and internet access either. Well, if things were really dire, I would, but I think I’d rather sell my house and move first. I could live without the landline, but I like having it during emergencies. And since we have DSL, our internet access is connected to our phone bill and I suspect that canceling the landline would cause our monthly internet charges to go up, canceling out any savings.

I’m actually surprised that I can’t think of more ways we would save money in a financial emergency, but these are our luxuries. If one or both of us no longer had a job, we would make the changes I outlined, but we would also have much lower expenses due to not having to pay income taxes and other mandatory deductions (though we might have to pay more for health insurance), as well as childcare. But hopefully, we’ll never have to take a serious look at this list!

8 responses to I could find $12,000 per year if I had to

  1. Like you, the internet connection is pretty important to me. Among other things, it’s where half my income comes from…in one form or another. I can see it being more of a luxury for some people I know.

  2. One sentence in your post caught my eye. “And since we have two young boys that we have to entertain, we go to lots of places.” It is a shame that parents feel like they have to constantly entertain their children, or that children need constant entertainment. I’m probably showing my age, but as a youngster, I entertained myself, riding a bike, playing with friends, reading, even occasional TV(a couple of B&W channels). My parents didn’t feel the need to keep me entertained. I did have the advantage of growing up in smaller, safer towns in Oklahoma and Wyoming, and so my parents didn’t feel the need to constantly keep me in sight for safety’s sake. What ever happened to parents letting their kids out the front door in the morning and telling them to be home by dinner time?

  3. @Sam – If I let my kids out without supervision, I’d be arrested for criminal negligence. They are 1 and 3 and have a lot of energy. We go to the park as often as possible, but the weather isn’t always cooperative, nor is it always safe, depending on the time of day and number of people. I am looking forward to having to entertain my kids less, but I certainly don’t feel like a bad parent!

  4. Any expenses relating to children (or grandchildren, in our case) would be the last to be cut. My wife and I always plan our budget so we can spoil our grandchildren at Christmas.

    We forego those updated cars (my wife and I each drive cars over 15 years old), and find having no car payments is nice. No credit card debt is also nice. Actually, you can save a lot of money by saving money, i.e., by spending less than you make.

    It’s amazing how many people have their budgets eaten up by interest payments.

    Live within your means, spend less than you make, save the difference. I know it sounds old-fashioned, but it seems fairly reasonable.



  5. I read both JLP’s and CFO’s posts, and my first reaction was “Good Lord, these people eat out a lot.” Then I was inspired to run a report on my own spending for last year, and found that I spent $1450 on dining out myself. That’s a lot less than JLP spent, but way more than I thought. Most of it was my wife and daughter eating fast food while out running errands. We occasionally hit the Chinese restaurant near the house, and maybe once a year go to Captain George’s. I spend a lot of time traveling on business, so I enjoy homecooked meals whenever I can get them.

  6. @Bozo – I agree, a budget helps to set priorities. Your grandchildren are lucky :)

    @Scott – LOL! We spent more than $2600 eating out last year with a new baby in the house, but we’ve been doing better this year. I would love to cut it by half ($100 per month is my ideal eating out budget) so that’s what I’m working toward. Do you think you would eat out more at home if you didn’t travel so much?

  7. Cathy,
    I agree that 1 and 3 year olds can’t be let out to entertain themselves. I was thinking more of grade school aged kids. My perceptions differed from your reality.

  8. @Sam – I understand your original point quite well, and I admit I get a little defensive when someone questions my parenting – sorry! I agree with you that there are some parents whose kids who are old enough to entertain themselves that go too far with constant entertainment, but I suspect that these parents are largely those who work long hours and don’t actually spend that much time with their kids, and then feel the need to make the time that they are together memorable in some way. I, for one, can’t wait until my kids are old enough to play organized sports so someone else can run them ragged!