Changes that I Made and a Few that I can Make

Sometime last Spring I discovered Mr. Money Mustache, Dave Ramsey, and other personal finance gurus.  I was inspired. So after digesting as much personal finance information as I could, I decided to make some changes to better myself financially. I don’t remember exactly which step I took first but I decided that I needed an emergency fund. So I did some research and found Ally to offer one of the best interest rates for a savings account. I opened an account with them and set up a biweekly automatic deposit of $50. I’m still contributing $50 every other week and have also deposited some windfalls into that account. I then opened a checking account with a local credit union and closed my account with a bank that was charging me a fee every time my checking account got below a certain balance. I had been contributing 3% of my paychecks into a 401K. I increased that to 6% to get the company match. So at that point my paychecks were being directly deposited into my new checking account and I had my investments and saving set on autopilot.

I also made a few changes to my monthly expenses. I left my AT&T family plan that I was on and switched to Cricket Wireless. The plan that i’m currently on is $35 per month (with autopayment discount) for unlimited text, voice, and 2.5GB of data. That’s significantly less than a contract plan on AT&T or Verizon. I began doing my grocery shopping at Aldi and discovered that I could do nearly all of my grocery shopping there and only spend $50-60 every two weeks or so. Having food in the fridge reduced my urge to go through the drive-through and helped save even more money.

More recently this past year I opened a Roth IRA with Vanguard. I didn’t max it out for 2015 but I have set up a biweekly automatic deposit to max it out for 2016. I also increased my 401K deposit to 7%. With these small changes my net worth has increased significantly and I have paid off all but one student loan. It’s interest rate is around 3%. So my strategy is to pay the minimum on that for now and put extra money towards the down payment on a house. I have been living an apartment or dorm for nearly ten years now and I think it’s time to upgrade to something more permanent. I’m not looking for a McMansion. I just want a moderate sized house with a decent plot of land on which I can have a garden and shoot my bow. Ideally I would want my mortgage to be close to what I pay now for rent (<$500).

Currently my recurring monthly expenses are rather low. One change that I think I can make is getting off of the budget billing for my electric company. Aside from the warmer Summer months I am overpaying every month by $20-30. My charges this past month were $62.45. With the budget billing my bill is $93.00. It’s nice to have to same rate every month but I don’t like overpaying during months where my electric/gas use is relatively low. My other expenses are a matter of self control i.e. fast food, gas station snacks, etc.

I have been trying to offset any items that I have splurged on my selling unused items on Craigslist and/or eBay. For instance, my old cell phone (Galaxy S3) had been in my closet for nearly a year. The phone did not turn on but was in great physical condition. I decided to list it on eBay along with a few accessories. I disclosed the fact that it didn’t turn on and ended up selling it for $41. I currently have set of headphones listed on eBay and have a few more items in mind to sell. It’s a win win because you clean out clutter and earn some extra money.

There seems to always be ways to trim expenses or perform tasks more efficiently. I recommend that everyone get their savings and investments on autopilot. I’m currently putting away roughly 33% of my income automatically. I’m not at the Mr. Money Mustache level but I think I am well ahead of the average American. It gives a peace of mind to be able to save without effort. I will continue to try to find ways to exercise my frugal muscle and increase my net worth in order to hopefully be financially independent one day.

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