Sweating the small stuff

[WillS]

I think it is very clear that the way to maximize savings rate in the short run, for most people, is to cut spending; it is more directly applicable than to increase income. ... and I totally agree with it in an abstract sense, in terms of philosophy and values. But a lot of cost cutting opportunities are in the smaller details, and I have a hard time caring about small details. I'm renting a room, I've sold my truck, I've got a bus pass and a bicycle, I cook my own food mostly, but I still often break down and buy convenience food or comfort food, when I'm feeling busy or impulsive and impatient. I have an expense classification system I call 'bullshit' or 'not bullshit'. Monster energy drinks are bullshit, and 25lbs of lentils are not bullshit. When I go through my receipts and tally things up I find that even though I'm doing a lot of smart ERE things, easily half my discretionary spending is still in the 'bullshit column'. I think what I need is a change of perspective. How do you all handle this? Do you just take a moment to calm down, slow down, de-stress a bit... or what? I know, maybe I'm just not as disciplined as I should be. Still, I'm curious what other people are thinking about this.

[interesting aside; during the recession, I tried classifying consumer products companies into 'bullshit' and 'non-bullshit' in economic terms, thinking that consumers would be forced to wise-up and be more economical. I thought that would be a great investing theme. It didn't work as well as I expected; consumers just aren't that smart. ]

[workathome]

So soft drinks are chemical-ladden cancer cocktails. I don't drink them because I don't want cancer or diabetes, or someone profiting off deceiving people into consuming that. So getting a giant spike of "energy" isn't too good for your heart either. There's noway they're healthy for you...

Leading causes of death in the U.S. are #1 Heart Disease, #2 Cancer & #7 Diabetes.

[jacob]

Most discretionary spending is buying things [always] used, then reselling them once I get tired of using them. My net-ownership cost of owning stuff tends to be close to zero. I try to minimize recurring cash-outflows. Things like fees, plans, etc. I will rarely blow money on something that has zero persistent asset-value, e.g. things like eating out, movie tickets. Doesn't mean I never do this but I rarely do it. Definitely not on the 50% level. It never appealed to me.

[WillS]

I guess I wasn't being totally clear. By 50% of discrec, I mostly mean 50% of the food budget. I'm strict about everything else, which mean's there's very little discretionary spending left to cut in other areas, and food is one of those areas where, no matter how low you go, everything you buy is more or less a discretionary choice that you make. Since most of it is optimized (eg, lentils and oats), even minor splurge here and there will double the expense for food for that day. I'm struggling toward 'bullshit free' rather than 'mostly bullshit free'. Just writing this stuff in public helps me see how stupid it is. Thanks for listening, helping me with my reality check.

[reepicheep]

I have this problem.

You are hungry or lacking in some micronutrient or have low blood sugar or you are bored/tired and earring to stay awake.

The solution is to pack snacks--lots of snacks. I even make my own coffee frappachinos and put them in the glass Starbucks bottles.

[Jean]

The solution is to live in a place where no one could sell you convenience food.

[vexed87]

Cutting yourself off won't solve the issue. You need to re-learn the concept of convenience/discretionary foods doesn't mean processed foods, sweets, takeaway pizza etc. I found reading about proper nutrition helped kick the discretionary food purchases to the gutter. It's been a long time since I read it, but this book really helped me get to know what was and wasn't good for me, it's backed up by scientific references. http://www.amazon.co.uk/Waist-Disposal- ... 1848501153

If you have a freezer, get used to batch cooking meals so you can pull readily portioned meals to reheat when you are feeling "meh". It takes very little extra effort to cook 8 portions of chili vs 4, so you can quite easily build up a nice supply of "convenience" foods at home. I always try to carry food with me where ever I go, instead of snacking on chocolate bars (which I find are not satisfying any more!) I carry fruits and nuts. It's particularly important not to go to the supermarket on an empty stomach if you willpower is lacking, as you will be craving sugary foods.When I'm out and about I think about every purchase, will this make me happy, do I need it, is it aligned with my goals? If not, I put it back down on the shelf.

Having the discipline to take a packed lunch to work every day was instrumental in cutting my discretionary purchases at lunch. It's all about forming good habits. Lots of books on habit forming, but generally you need to do something 14 times before it becomes a habit and you no longer think about it.

When I can't be arsed cooking or know I am going to be home late and need comfort food, I have things like frozen pizza dough defrosting in the morning, throw a pan of chopped tomatoes and Italian herbs together, reduce the sauce slightly while rolling out the dough, throw some mozzarella on with some olives and whatever toppings you like bake in oven for 10 minutes on high heat.

Healthy, home cooked, quick and convenience "junk" food for when you are really feeling meh!

[IlliniDave]

The thing that worked best for me was the gist of the philosophy from Your Money or Your Life. For a few years I've been keeping track of my spending in detail, and I review it periodically and assign an informal grade as to whether it's helpful or hurtful in the context of where I want my life to go, which probably isn't dissimilar to your BS/non-BS buckets. For me, for some items such as "convenience" foods, there's a low but non-zero level of spending that if I go below more often than not causes a dip in my content-o-meter. If I choose the convenience item carefully (i.e., not overly processed/carb-heavy/sugar-laden) and keep the gross ongoing cost low, a "BS" item crosses the line into a "non-BS" item. Also, for me it's been a journey of several years that is still ongoing. I have six years of expense data for dining out, for example. If I plot the annual totals vs time, the curve shape is a very nice exponential decay, so maybe just stick with it for more time. Each small victory over an impulse that you "survive" without harm makes beating the next impulse a little easier. If you can get to the point you win more than you loose you should get to a tipping point. Another thing that has helped me is to add up the "BS" expenses for an entire year. There was a time when I was spending $8K/year on convenience, meaningless drivel, and lazy "entertainment". At the time I thought I had about 20 more years to work, and realized that if I continued to toss $20-bills in my wake everywhere I went at that rate, that would be about $160K simply vaporized. I started estimating how many extra months/years I would have to keep working to pay the price for that, and suddenly the Chinese takeout started tasting a little "off", and the draft beer a little flat ...

[sshawnn]

Op:

I really have to check myself, or I end up emotional eating. (I can pass the marshmallow test, but I have to study. )

When I can follow the warrior diet, it really zaps the bullshit.

I think many people like us have tendencies such as these and some of us are so hardheaded that it takes more than a meditative or calming thought to break the chain.

Snacks will get you to 300 pounds. I am not comfortable admitting my anxiety, but I sure save money on convenience food when I address it head on.

http://www.helpguide.org/articles/diet- ... eating.htm

[Scott 2]

You're being too hard on yourself. Force an extreme lifestyle and eventually the mind will rebel, likely with far greater intensity than a splurge here and there.

Watch for the most frequent instances. Seek substitute behaviors. If they don't work, that's OK. Try something else. You're a person, after all. This is about maximizing quality of life, not meeting some arbitrary ideal.

[akratic]

obviate discipline by:
1) improving (cooking) skills
2) designing things such that the lazy choice is the right choice

[WillS]

I like the design idea. I don't think there's any such thing as 'too hard'. Every incremental improvement if you make it small is easy, they add up. I don't believe in perfection, but I do believe in constantly doing things a little bit better. I do have a tendency to get too busy and stress myself out. Its a type-A sort of thing. Then I get sloppy. Gotta try and re-balance a bit I guess.

[jacob]

http://earlyretirementextreme.com/wiki/ ... _and_sales

[GandK]

@IlliniDave +1 to YMOYL.

OP, I think you need to break your bullshit down further. Using your spending categories, there's stuff that's technically bullshit that brings me enough joy that it's worth the capital outlay to me (my once monthly Starbucks binge). And there's bullshit that isn't worth it at all, it's just the result of poor/no planning (I pick up two meals' worth of Jet's pizza for my family for $18 because I don't feel like cooking tonight). I think you need to keep track of all expenses and evaluate afterward, "Did I receive $7.16 of joy/benefit out of this item, or didn't I?"

Keeping plenty of cooked rice and salad materials in the fridge for meals, and a bowl of fruit on the counter for snacks, cuts down on most bullshit food expenditures for us. All I really have to worry about when I cook is what to put over the rice. And the possibilities are pretty much endless.

[fiby41]

Instead of looking at you spending after you've already spent on the BS category, you can take last months BS spending, multiply by 0.8 and reserve this exclusively for BS. Do this monthly until BS spending is comfortably low %age of total. This is not quick but it is easy and once attained the habit can be sustained. (Engineering triangle)

[spoonman82]

Building off of what a few other have said, my "bullshit" category is somewhat more expansive than yours, since it includes entertainment, occasional drinks with friends, etc, but what I do is I choose a total amount I'm willing to let go towards bullshit. Every month I withdraw that amount in cash. The only things I pay for in cash are these bullshit items, all my "necessaries" I pay for with a card that allows me to track my spending easily (paid off in full weekly). Never purchase the two categories together (i.e., don't buy energy drinks when you're grocery shopping -- you will cheat). The cash withdrawal gets tracked as "whatever" in my budget -- I honestly don't know exactly what I spend it on from month to month. The key is: I NEVER withdraw cash twice in a month, it's just not allowed. When I'm out of cash, I can't buy bullshit, I can't go to a show, I can't buy drinks/dinner, etc. This limits the amount of "leakage" in my budget to a predetermined amount I allowed myself when my mind was clear and my willpower strong. Something about the tangible size/amount of cash decreasing over the course of the month helps me stay disciplined in weak moments. My recommendation would be to start with whatever amount you spend now on bullshit, then decrease the amount by 10% or so a month until you reach a level you are OK with. If I have cash leftover, I just roll it over to the next month, but you can make up whatever rules you like. For me, the key is that the tangible nature of cash enforces my predetermined rules when my willpower is weak. Obviously, this strategy only applies if you are willing to allow *some* leakage in your budget, even if it's only $5 a month (or your min ATM withdrawal). But as other folks have pointed out, you reasonably need to allow yourself some slop in the budget; this just limits the damage.

[OldPro]

"I think it is very clear that the way to maximize savings rate in the short run, for most people, is to cut spending; it is more directly applicable than to increase income. ... "

I would say that's true but may be leaving out a more relevant consideration. If you earn $1000 a month, no matter how much % you cut spending you are not going to accumulate enough in any reasonable amount of time to ER. If you earn $10,000 a month then you are earning enough to be able to look at achieving FI in a reasonable amount of time.

So I would say that you FIRST have to be earning enough to THEN look at how to spend less and achieve FI.

[BeyondtheWrap]

Every month I withdraw that amount in cash. The only things I pay for in cash are these bullshit items, all my "necessaries" I pay for with a card that allows me to track my spending easily (paid off in full weekly). Never purchase the two categories together (i.e., don't buy energy drinks when you're grocery shopping -- you will cheat). The cash withdrawal gets tracked as "whatever" in my budget -- I honestly don't know exactly what I spend it on from month to month. The key is: I NEVER withdraw cash twice in a month, it's just not allowed. When I'm out of cash, I can't buy bullshit, I can't go to a show, I can't buy drinks/dinner, etc.

I used to have a similar system. But what about bullshit items that can't be paid for with cash? Such as, if you decide to buy a bullshit item online?

[OldPro]

Re using cash. I never use cash for the simple reason that using a card EARNS me money. I do agree it requires a bit more self-discipline though.

My main credit card pays me 2% cashback on every dollar I spend on it. If you are withdrawing say $500 every month in cash that is $6k a year and 2% of that is $120. I get to spend $6,120 for every $6k you spend using cash OR your card if it does not pay you 2% to use it spoonman82.

Why are you paying off your card weekly? Or was that a typo and you meant monthly? And are you using a card that earns you money?

By the way, you mention energy drinks. I've never tasted an energy drink in my life. Why are you spending money on them at all? They aren't a necessity are they? I can understand someone wanting to indulge some discretionary income in a whiskey or something. Is an energy drink an indulgence comparable to that? I'm trying to understand why anyone buys an energy drink. Do people buy them instead of say a bottle of coke for example? I'm just curious.

[WillS]

Haha, well... a friend gave me one a while back, and I really liked it. This was pre-ERE, when I was a carefree whitewater guide, living in a tent by the river, and being wealthy meant having more than enough money for next week's food and gas. It has a bit of a caffeine buzz, but also somewhat soothing/calming. Basically, it is just drugs. Not really that different from beer or coffee. Better than a cheap coffee, and cheaper than a nice coffee. Handy on the road. But it goes against my general loathing of consumer packaged goods. Normally I brew my own tea or coffee.

I don't like setting bullshit cash aside in advance, because that's like planning to spend on bullshit when maybe you can avoid it. One thing I've done in the past (should still do it but it takes a lot of time), is to keep a log of spending in excel, journalizing each entry formally, with an entry for each line in a receipt, rather than the total. It is really tedious; if you hate accounting as much as I do, you'll spend less money just to avoid having to do the accounting. and you can really see where the money is going. This takes the idea of running your finances like a business about as literally as it is possible to do... I think I might have just talked myself into doing this again.

I definitely answered the question (for myself) 'how to sweat the small stuff'; by forcing myself to record everything, I will put a psychological penalty specifically on the small stuff. And the resulting records will be handy for analysis as well. I think that will work.