Personal Finance

Cutting back requires effort and dedication

Saving money is all about making choices. A luxury purchase, a necessity or an impulse buy all mean different things to different people.

The first installment in a report on my family's efforts to slim down our discretionary spending prompted more than 40 e-mails from readers with savings tips. Throughout January, my husband Clease Bair, my 17-year-old daughter Ali and I went on a spending diet, cutting out expenses for such things as movies, eating out, bottled water and coffee breaks and trying to limit our weekly trips to the grocery store to $70.

Some readers doubted that $70 a week was a realistic goal while others pointed out that for many families in South Florida, not spending isn't a choice but an everyday reality.

One caller was quite concerned that I was jeopardizing my daughter's health with such a meager food budget. Rest assured, we ate fine. The secret is buying specials, not letting any food go to waste and recycling leftovers.

Some readers didn't like the choices we made. Spending $14 for olive oil was a matter of debate. But I use it for salad, stir-frys and on the tomato, basil and mozzarella sandwiches I take for lunch almost every day. For me, it is a necessity.

Here's a report on how we fared in the second half of our no-spend regimen:

Jan. 16: I have vowed to be more frugal at the grocery store. So when I stop after work, I keep strictly within my budget. That means I can't even get everything on my list -- no lettuce or sprouts or the starch and Comet cleaner the housekeeper ordered. I spend only $54.87 -- well below my $70 allowance, but my husband made a grocery run earlier in the week that ate up the rest of the budget. And he bought cola and Red Bull, which my daughter classifies as a necessity during 5:30 a.m. ice skating practices.

Jan. 18: One of my colleagues gives me a bag of carambolas from her backyard tree. This will really liven up our menu. I make a salad with them as soon as I get home from work.

These days I'm watching any bank debits and credit charges like a hawk and I analyze our receipts endlessly. I discover a $9.83 charge for iTunes on my daughter's credit card! It's music for a skating program, she tells me, and reminds me I told her the week before that it would be OK. Aaah, I vaguely remember nodding my assent when I was half-asleep.

Jan. 19: I notice the broken trash can -- the one some people in the household said had to be replaced earlier in the month -- has been repaired.

Jan. 20: "This hasn't been so bad, " I say after dinner when I have the family's attention. "Maybe we should do it another month."

Jan. 21: We decide to do a run to Costco, the discount warehouse store where you go to save money but always end up spending twice as much as you intend. This is dangerous territory -- everything looks like such a bargain that you pick up items you never knew you needed. In December we spent $370.48 on our monthly visit to Costco. (That total did include a couple of holiday gifts). Today I have just five items on my Costco list: cat food, toilet paper, paper towels, pecans (we love them as a snack), and fresh pineapple.

We spend $139.85 and end up with 14 items. At first I'm feeling pretty good about spending $230 less than I did in December, but then I begin to have second thoughts. Not only did I blow the weekly budget, but did I really need $23.88 worth of Swiffer cleaning supplies? What a no-spending dilettante I am. I have a mop; a floor can be cleaned with water and vinegar. I needn't have spent a dime.

But if you eliminate the cleaning supplies and my husband's purchase of a big pack of gum and Tums, I have spent just $53.69 on food at Costco, bringing my weekly grocery total to $83.69. In my defense, I used coupons at Costco for the first time and I saved $12.50, including $2.50 on wet and dry refills for the Swiffer mop.

That night I lie in bed examining my Costco receipt, analyzing -- and rationalizing -- my purchases. If I hadn't gone to Costco, would I really have been tempted to buy the large package of Skinny Cow Ice Cream sandwiches ($9.69)? But, on the other hand, I did get good buys -- $3.99 for a package of organic salad greens that will last all week.

Was it really wise to buy the mega-pack of Bounty towels for $16.99 and what about the giant pack of Charmin toilet paper ("six rolls seem like 15, " or so it says) for $16.99? I tell myself that since I only go to Costco once a month, these purchases will be amortized over the next four weeks.

With that I roll over to go to sleep. But, oh, the shame of a Swiffer purchase!

Jan. 22: I'm beginning to wonder if I should be nickel-and-diming my husband over his purchases of Lean Pockets, gum and Coke. I need to remind myself that $70 a week is a target for grocery expenditures. It is not written in stone. Then I look in the refrigerator to see if any of the cola is left, because at this point, I truly would like a rum and Coke.

Jan. 23: I notice the bananas on the counter are sporting brown freckles. They will not be wasted. I turn them into banana bread.

Jan. 24: Sunday's leftover flank steak becomes today's pepper steak -- with banana peppers from my garden.

My husband comes back from picking up a prescription with a bottle of shampoo for my daughter. She doesn't need it, and I question her. "I didn't say buy it, I just said I would need some at some point, " she protests. More shampoo is something my household definitely doesn't need. I swear the shampoo bottles spawn in the shower overnight.

Jan. 26: My daughter cracks. She rings me after school and says she is going to dinner with her friends at a sushi restaurant. Just wait a week because we're almost at the end of the no-spend month, I tell her. "I've turned them down five times in a row, " she protests and then puts on the hard sell. "I just got paid today and I'm taking an extra job Sunday helping kids make paper sculptures. It pays $50, " she says. "Oh, or I could just go and not eat. And how pathetic would that be?" My colleagues at work suggest she take a PB&J sandwich with her and offer that old chestnut about not counting her chickens before they've hatched.

She's not buying it, but offers this compromise: "I'll just get two pieces of sushi when the boat comes around. What's that, $4?" But those little boats loaded down with sushi and sashimi were like a siren call. When I ask the next day about what she selected, she tells me, "Crab and all kinds of good stuff." Her tab: $11 plus tip.

Jan. 27: A Saturday afternoon and I find my husband at the kitchen table, clipping coupons! A breakthrough.

Jan. 28: Instead of reading novels to fall asleep at night, I've started to pick up personal finance books. In Smart and Simple Financial Strategies for Busy People, Jane Bryant Quinn suggests analyzing your spending, listing all expenses and putting a big X next to the purchases you could have lived without. "You'll be surprised at how big the X number is (the food dehydrator? . . . the Acura instead of the Honda?), " she writes.

Her suggestion: "Try raising your annual savings by the amount of money on your X list. That won't limit your style: It will simply, and profitably, limit the things it occurs to you to buy."

Despite falling off the wagon last Friday, my daughter hands her paycheck to me for deposit in her college account. In fact, she's handed over her checks to me since she started working last August, so I really shouldn't complain. Jan. 29: Finally, I've got my shopping down right. I do a quick pantry check (a snap because the pantry is all organized now), check my coupons, and then calculate the bare minimum I will need for lunches and to supplement ingredients I already have on hand to make meals. I spend just $33.54, knocking $9.68 off my total by using $8 worth of coupons and saving another $1.68 by buying advertised specials. The key: Don't use coupons for anything not on your shopping list, or you won't save any money. (And my budget even allows for feta cheese and a bottle of soy sauce. Those soy packets from Chinese takeout I used earlier in the month are gone.)

We're not suffering in the food department. In fact, because the home-cooked meal quotient has gone up and the packaged food way down, no one's complaining. (No bread to go with the chili? I make a batch of cornmeal muffins. Want something special for Saturday brunch? I make a cinnamon coffee cake.)

Jan. 30: The Girl Scout cookie season is in full swing but so far I've resisted those $3-a-box thin-minted, peanut-buttered wafers of joy. Reporter Jim Wyss takes pity and buys me a box of Thin Mints and I am very grateful. Note: This only works once. Though your friends might be willing, anything after that first spontaneous act of generosity becomes mooching on your part.

Jan. 31: I've discovered the magic of compound interest calculators. If, for example, I lop the premium channels off my satellite TV service, I could save $20 a month. That might not sound like much, but calculating just a 2 percent return, if I save that much every month until 2011, I will have $1,207 -- enough to pay for my daughter's books her final year in college. ( is among the websites where you'll find a compound interest calculator. It also has calculators for portfolio performance, bond yields, capital gains, mortgage payments and so on.)

Feb. 1: I ask my husband to estimate how much we saved in January compared to December. He guesses $430. When I do the calculations, the figure is more than $800. I am shocked. Where did the savings come from? We pared $546 off our grocery store and Costco bills, saved $122 by forgoing restaurant and takeout meals and cut $61.98 by canceling deliveries of bottled water. Even though Ali got sushi, she saved nearly $78 by giving up Starbucks, Jamba Juice, dinner with her friends and the beauty salon. There were also additional savings by staying out of the stores and taking our lunches.

March 1: Now the knives are sharpened and I'm looking for other household expenditures to cut. As I promised, our estimated savings have been deposited in my daughter's 529 college savings account. And we just may try this no-spending plan every other month.

Last week I asked readers whether I should include cleaning supplies and other nonfood items in my weekly $70 grocery target. Most say the budget is already tight, so no. This will give me a little more leeway at the supermarket.

When I share our savings total with my daughter, she says we should make limited spending a permanent habit. She's also willing to give up the premium tier of our satellite TV service.

Our no-spend month was inspired by Judith Levine's book, Not Buying It: A Year Without Shopping, which chronicled her experiences cutting discretionary spending to the bare bone in 2004.

I decided to see how she and her partner Paul Cillo were doing two years later. Would a full year without making discretionary purchases have any lasting effect? "We really have stopped impulse shopping: stopping for a coffee, buying earrings in the street, or a sweater on sale, " Levine says. The couple has lost not only the need for discretionary shopping, she says, but also the desire.

"I continue to feel my future is more in control, " says Levine, who saved an extra $8,000 and paid off her credit card balances during her year of no spending. Since then she has managed to pay off all her credit cards every month.

We'd all do well to remember Levine's parting shot, "As far as I see, there's a heck of a lot of money being wasted."


* The best way to save money is just not to spend it. No more impulse buying because something is a great buy. It would be even cheaper if it stayed on the store shelf.

* Expenses happen. There are always those unforeseen things like a car battery dying or a trip to the doctor. They add up, and they'll cost you -- so if you really want to save, purchases must be strictly rationed to only those things you consider essential.

* You can make almost anything taste better if you have olive oil, balsamic vinegar, limes and maybe cilantro (just 89 cents a bunch). And yes, there are thousands of ways to combine eggs, cheese, rice and vegetables to make economy meals.

* Once you really get into trying to save money, the challenge becomes appealing, something akin to the thrill of the hunt.

* Saving money requires more work. A lot of spending occurs because working stiffs are tired. You arrive home beat and you don't want to make dinner, so you call Chinese takeout or pop a Lean Cuisine into the microwave.

Or you hire a yard man when you can cut the grass yourself. If you're really sincere about saving money, you can do it. You'll look in the refrigerator and invent a meal with what you have, or mow your own lawn.

And really, pancakes are not bad for the occasional dinner.

* Each household needs a designated grocery shopper -- someone with a knack for sniffing out deals and two-for-one specials. Impulse buying by other members of the household can wreak havoc with your budget.

* Swiffer Guilt is real.

* The less you buy, the simpler your life is -- and sometimes that makes you happier.