How are you adjusting?
With energy and food prices both climbing, one of my regular readers suggested that I ask all of you all what adjustments you’re making. Are you reducing your driving? Cutting coupons? Reducing meals out? Saving less? And how much are these adjustments hurting? Do you feel like it’s a big sacrifice, or something you hardly notice?
In our household, I’d say we’re making relatively minor adjustments:
- Trying to consolidate errands, do fewer grocery runs.
- Doing more shopping at the less expensive grocery stores, and buying less convenience foods
- Really paying attention to turning out lights, unplugging appliances when not in use.
- Taking the bus to NYC instead of driving (the parking costs in NYC were killing us)
- Generally asking "do we really need this" before buying stuff — especially in the $20 to $50 range, which doesn’t feel like big spending, but adds up fast.
I can’t say we’ve really cut back on our day to day driving — I was already driving to the metro, rather than downtown, and the bus is really more of a hassle than the additional savings justify. (It’s a bit slower than driving, but real problem is that the low frequency makes missing the bus a disaster, so you have to build in huge margins for error.) I’m actually sort of dubious about these stories about how so many people are shifting from cars to buses. I’m not disputing the fact that public transit systems are seeing big percentage increases in ridership — but we’re starting from such a low base that if only a few percent of drivers shift to buses, that can be a 30 or 40 percent increase in bus ridership.
I just put in a low-flow showerhead, but that was really an environmental choice rather than a frugal one. Overall, we’ve done a lot to improve the efficiency of our house — new windows, new boiler (we have baseboard heating), high efficiency washer and dryer, high
efficiency kitchen appliances. Over the long run, these will save money, but for now, we’ve been writing a lot of big checks for them.
In the short run, things will be better for the next few months, as we won’t have to pay for N’s preschool, and have already paid for camp for the boys. But then he’s going 5 days a week instead of 3 next year, so that will cost about an extra $200 a month. But then
after next year we’ll be done with preschool and will feel rich.
Several years ago, I read an article on Money.com called the "60 percent solution" in which they argue that you should keep your fixed expenses down to 60 percent of your take-home income. (I see I wrote about Warren and Tyagi’s version of this plan two years ago). If you were doing that before the recent run-up in prices, you’re probably giving up some of your extras, but you don’t have to do anything drastic. If 80 or 90 percent of your paycheck was already allocated to fixed expenses, there’s not a lot of room to adjust.
The reason I thought the 60 percent solution article was interesting was that it recognized that it’s really hard to save significant amount of money by shaving your grocery bill. Some of us never spent $5 a day on fancy coffees in the first place, and so can’t find savings by giving them up. Instead of squeezing at the margin, it may be better to bite the bullet and look for big changes to make — a smaller house or apartment, taking in a roommate, finding a second job.