I’m As Optimized As I’m Going to Get (for now)

So for those of you who don’t follow my twitter, some of the random budget angst from last week turned out to be a little premature. Turns out — ha ha! — I had accidentally hidden a category in YNAB, which happened to have $250 in it, so when I found it I relaxed some and also moved the $$ into my down payment fund, which now stands at $5250. I’ll just have to hustle back the $750 that went into my Roth IRA last week to make it back to the $6000 it was at.

Wait a minute, why hustle?

I’ve realized this week, as I stared at my budget and then read endless blog posts of “ways to save money,” that I’ve just about hit my frugal limits. My core monthly expenses are only about $800 (rent/utilities/groceries/gas) and, while I typically spend a few hundred more than that on anything from personal care to theater tickets, I’m not really interested in cutting back any more. I don’t have a car payment, I’m spending about $25 a month on gas right now, I almost never go out to eat, I rarely buy meat or alcohol, I don’t have cable, I’ve eliminated all my autopay subscriptions including netflix and amazon prime. I’ve almost totally quit buying books and music (I get books from the library and, for now, listen to the music collection I have.) About the only thing that remains to cut, when I look at my budget, is the gifts/charity category, but I want that to get BIGGER, not smaller.

This isn’t to say that I never mess up (hello, speeding ticket from last fall) or that I never have fun (that’s why I don’t want to eliminate the money I still do spend on travel, entertainment, and other personal stuff) but I feel like I’m about to the outer limit of what I want to do except in case of extreme circumstances like job loss. I’m literally saving until it hurts (psychologically.)

This is relevant to last week’s dilemma because, if I can’t/won’t cut the spending budget any more, then the amount I can save from my regular salary now has outer boundaries on it. That means I either take as long as it takes to reach my goals (buy a house in November instead of June, retire at 67 instead of 60), or am satisfied with a smaller number (buying a house with a 10% down payment instead of 20%, retiring on less), or find a way to increase my income. If I don’t make one of those choices, I will inevitably keep finding myself in situations where I’m trying to make a finite amount of money (currently about $1000-1300 of cash every month — separate from my automatically deducted 401(k) contribution) serve multiple purposes. I can’t BOTH put every spare penny into my house fund, AND contribute to my IRA when the market is down. I could, however, choose to accept a smaller/slower house fund in favor of taking advantage of market dips. (A result of last week’s moves is that my 2015 IRA is now fully funded, which I’m actually very happy about.) And I could also choose to try to expand my freelance work. This is actually my preferred option, but realistically it’s of course limited by various factors. I think/hope some of this will get better when I get a raise this summer, but even so, it’s likely to be an issue for a while, since I have a lot of pent-up saving to do in order to get to a rough approximation of where someone my age “should” be.

[By the way, you might be wondering why the rush on the house, and why a house at all. Because I live in a largely academic city, houses tend to be available mostly on a cycle related to people graduating/taking new jobs elsewhere in the late spring and early summer. Inventory right now is as ice-cold as the weather. Therefore, even waiting until September or October would likely mean I’d missed the majority of the action for the year. It’s overall a better deal for me to buy with a smaller down payment in May or June, and make rapid payments to get up to 20% and ditch the PMI, than it is to wait. I’m not opposed to renting either, and will look for rentals, but buying is probably a better idea here. So: probably buying, and if buying, ought to be ready to make a move in May/June/July.]

21 thoughts on “I’m As Optimized As I’m Going to Get (for now)

  1. Maria says:

    This all sounds… just very true and sensible! 🙂 But please don’t exhaust yourself stressing too much with freelance work.

    1. thesingledollar says:

      Hee 🙂 I don’t think I will. My past experience with freelance work is that I will always choose getting enough sleep/relaxation!

      1. Maria says:

        But you really don’t have Netflix, Hulu, cable, anything like that? What do you do when you just need to…. chill? :p

        1. thesingledollar says:

          LOL. I watch DVDs! Either my own, or from the library. But I also screw around on the internet a lot or read novels (also from the library) when I want to chill. I’ve never really been a big TV person.

  2. We have come to the exact same realization in terms of spending, you can only cut so much until you reach your limit. We are at a point where we are happy with our spending, so if we want to increase our savings, we need to look into increasing our income. How much time do you spend on side hustles on a weekly basis?

    1. thesingledollar says:

      Yeah, I could cut more, but it would start really cutting into my quality of life, and there’s just no point.

      Side hustles, it varies. Anywhere from an hour to five or six hours a week right now.

      1. Seems like a doable amount of time!

  3. I think you’re going pretty darn amazing with your spending and savings. I have a post coming out about “should I be doing more financially?” and the answer is probably yet. But at what point are we sacrificing other very important parts of our lives for the sake of money?

    1. thesingledollar says:

      I mean, the answer is always yes. I’ve had to learn that in my career — I could always be doing more. So at some point I just have to say “enough, I’m going to live my life instead of doing another two hours of work.” And it’s true with money too.

  4. Wow, your expenses sound pretty low. I think it’s really helpful to identify your frugal limits as you call them. At that point, you can decide to focus elsewhere, on income or rethinking goals like you are. There really is a limit to what we should be willing to cut. We’ve also refused to eliminate charitable giving or all travel from our spending.

    1. thesingledollar says:

      Yeah, I’ve never been willing to cut travel, and I want to up my charitable giving, not cut it, now that I’m in a more stable position! It’s really all about figuring out where your personal limits are.

  5. Hannah says:

    It sounds like it’s time to read up on loss aversion and how it relates to goals. But seriously, I understand what it feels like to say, “I want all of these things, but I can’t have them all, but instead of actually facing the music, I’m just going to save a ton and pretend like I can have them all.”

    Thankfully, the passage of time is sometimes all we need to really clarify our real goals.

    Also, on the homebuying front, please be extremely prudent. You’ll probably make a wise choice, but houses can make you poor faster than cars if you buy them wrong.

    1. thesingledollar says:

      Yeah, don’t worry, I’ll be careful about the house. Even if I didn’t want to, my dad the architect who used to inspect houses for a living wouldn’t let me buy a dumb one 🙂

  6. This sounds very reasonable to me. I’m always amazed by how low you keep your expenses, whenever you share them. While saving is important, there’s something to be said for enjoying today, too. After all, it’s the only time we’re guaranteed.

    1. thesingledollar says:

      Yeah, it’s true! There needs to be a balance between preparing for tomorrow and enjoying today. I do pretty well, I think, I just sometimes worry 🙂

  7. You are doing extremely well, and I don’t like the thought of you tormenting yourself with the limits of math. I hope that you find peace of mind (just read Tonya’s post : ) in all that you have managed to do. Your plans are humming along nicely, and you are VERY frugal. I believe an increase in income is what will in fact speed up your progress. Until that happens, just recognize how wonderfully well you’re doing now. (And that bit about what people your age “should” have – does it take into account the years and $ spent on a doctorate?)

    1. thesingledollar says:

      Peace of mind is a good thing 🙂 I tryyyyy not to torment myself, but sometimes (especially in January) it’s hard. (Winter! Sheesh, I can’t believe y’all Canadians.)

  8. Eventually, everyone hits a wall as to what he/she can reasonably cut from the budget. It sounds like you’re pretty close to the bone, so take comfort in that.

    That said, I’m glad you’re mindful about potentially increasing spending in one or two areas. I have a habit of only living in the future and not enjoying the present. So I need to make travel a bit more of a priority as time wears on.

    1. thesingledollar says:

      Yeah, I think I’ve just hit my wall! And I agree, we need a balance between focus on the future and enjoyment of the present. Where would you like to travel to?

  9. I think you’ve gone way beyond what many people would consider their frugal limits — including mine! I think it’s super admirable that you’ve worked so hard toward all your financial goals and optimized down to the dollar, but I also think it’s healthy to realize that you’re at (or maybe past?) your limit. If it’s taking a toll on you to live so frugally, I think it’s fair to consider adding one or two little things back into your monthly spending that will bring you joy. I understand you have a small window to buy a home where you live, and that you want to save for retirement, but I hope you’re leaving yourself enough to feel like all your hard work is worth it!

    1. thesingledollar says:

      Yeah, I think I need to chill out more on expenditures. I’ve been so type A about money the last couple of years that it’s hard to pull back. I’m concerned that I’m overdoing it though 🙂

Comments are closed.