Barista Budget Plan, Part II

My taxes are complete. My refunds are coming. Now it is time to disclose the Barista Budget Plan and its results.

First, some background. So you can see where I'm coming from financially.

Daniel and I have been married for six years, which is pretty much our entire existence as adults, since we both moved into our first apartment straight from our parents' houses. We have filed our taxes together five times, for the following total earnings:

2004: $30,245
2005: $19,401
2006: $17,868
2007: $36,657
2008: $30,009

(Yes, these are the totals of both of our earnings combined.)

That's $134,180 earned in five years. That's an average of $26,836 per year, which is equivalent to one full-time job that pays $12.90 per hour, just for comparison.

When Daniel and I got married, I had a little less than $10,000 that I had saved up from part-time jobs, scholarships and graduation-from-high-school gifts. Daniel had his first three paychecks from his new job at US Auto - one purchased a 1984 Buick, and the other two paid for our first month's rent and a diamond for my wedding ring.

Over the course of our marriage, we have traveled together for about 66 weeks; we have visited 10 foreign countries; I have graduated twice; we have moved our stuff 8 times; we have lived in 6 different dwellings (excluding our car and our tent) spread out over 1,400 miles; we have held at least 18 different jobs; and we currently have about $50,000 in savings and investments.

So basically we currently have $40,000 leftover from our earnings after having paid for our living expenses, grad school, and 66 weeks of travel/unemployment over the course of six years of marriage.

How did we do this? A dollar at a time.

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Danno and I have been very disciplined with our spending. The Barista Budget Plan (so-called because baristas, such as us, have a need for thrift) consists of simple, frugal living. But I listed out 10 disciplines last night that are constant in our behavior, that safeguard thousands of dollars every year.

1. Don't eat out. Don't go to bars.
If we spent, say, a conservative $25 each week on fast food and Starbucks, or on an appetizer and a cocktail at a bar on Friday nights, that adds up to $1300 at the end of a year. That's two round-trip tickets to Europe. And thinking this way is how we stay motivated to enjoy eating at home. Socially, it is cheaper for us to have our friends come over for dinner and drinks, and to buy and prepare everyone's food ourselves, than it is to meet at a restaurant and buy ourselves the cheapest things on the menu. Of course, if friends want to go out, we go out. But I can't even remember the last time to two of us went out to eat on our own.

2. Don't go to movie theaters.
It's not like we NEVER go to movies. But we don't do it just to fill an evening. Again, five outings at $20 per movie date - that's a hundred bucks on sitting still in dark rooms while giving up time that I could be talking to Daniel or studying or sleeping.

3. Eat vegetarian. Eat fresh. Eat slow. Eat what's on sale.
Meat is expensive. Even if we weren't vegetarians, eating vegetarian meals would still be a good way to save money. And more importantly, it's green to go bean. It takes a lot more energy and grain to produce a pound of meat than it does to produce a pound of legumes, so vegetarian meals are easier on both the budget and the environment. Buying fresh foods to prepare at home instead of prepared foods saves a ton of money - and packaging. Additionally, we determine our grocery purchases based on sale prices - if oranges are cheaper than apples, we'll have oranges that week. If eggs go on sale cheaper than tofu, we'll have eggs.

4. Don't shop recreationally. Don't impulse-buy.
We do NOT go shopping for recreation. We occasionally walk around a mall on a rainy day, just to have a dry place to walk (like an old retired couple). We'll browse through funky shops when we're traveling. I will accompany my mother on shopping trips sometimes, to spend time with her. But we do not buy things unless we left the house on a hunt. (This is kind of hard, since the lust of the eyes is very seductive, especially when things are on clearance!) But we both think, "Do I need this? Or do I just want it because I'm looking at it right now? Don't I already have something that serves this purpose? Wouldn't I rather spend the money on gas to get to the Grand Canyon?"

5. Share one car, and drive it like a hyper-miler. Better yet, use feet, pedals or public transit.
Life in many parts of the US is nearly impossible without one car per adult. Daniel and I had two cars until May 2005, but since then we have happily made one-car familydom work. We plan our lives, jobs, schools and activities to take place in a small local area that doesn't require a car. And when we do drive, we both drive with gradual acceleration, gradual braking and lowered speed to maximize our gas mileage. Our sedan (a 2001 Saturn) gets 30 to 43 miles per gallon this way, which really saves. Not to mention the fact that we only pay for insurance and upkeep on one car, instead of two. O, to live someplace where a car is unnecessary!

6. Consult each other and wait on ALL large purchases.
Neither one of us will make a large purchase (the threshhold for us is around $50) without calling the other to talk it over. This is not so much asking permission to spend part of the other person's hard-earned money (since we have one account) as it is getting a second perspective on whether the item is needed and appropriate. Waiting also helps evaluate whether the item is worth getting. So whether it's a jacket at Anthropologie or a table or a plane ticket or a guitar, we wait and consult. It's not like there will be any serious negative result on our lives if we miss a "good deal" on an expensive purchase. Plus, we very often decide that we don't really need that exact thing. Money saved!

7. Don't have a spending allowance or cash earmarked as "spending money."
Such money is sure to get spent, not saved. This does not mean that we never spend money on little treats, like a cup of coffee and a biscotti (should I say biscotto?), or a cheap microphone at a garage sale. But if you have an alotted $30 to spend, you will feel like you have to spend it, whether you really want anything or not. The result is, in my opinion, overconsumption. Frittering. Bleeding out money in multiple small amounts without noticing how it adds up and without gaining anything you really care about having.

8. Stay healthy. Exercise, eat well, floss, take vitamins, and sleep.
We have rarely had health insurance, and poor health would wipe out our savings in a flash. Of course, staying healthy is partly a matter of having good luck at avoiding calamity. Not getting hit by a delinquent driver is partly defensive driving skills but mostly luck. Not getting cancer is partly refusing to make bad choices but mostly luck. However, we try to do whatever we can to maintain our health and prevent the need for doctors, surgery and root canals.

9. BUY OUTRIGHT. LIVE DEBT FREE.
Don't finance. Don't carry a balance on a credit card. Don't buy what you can't pay cash for. This includes cars. (Though I wouldn't apply this to a home purchase, medical care or a college education.) Paying interest makes any purchase more expensive. Credit card companies are out to make money off every borrower. And financing something that quickly depreciates in value and could be instantly destroyed, like a car, is far riskier and more expensive than buying a used car outright. I view going into debt as a high-risk activity that chains you to a very heavy anchor - one tip over the edge, and you're sunk. So, if you don't have the money, don't get the thing. And if you don't like giving money away, don't finance.

10. Cut out non-essentials, even if they seem paltry, and weigh fleeting desires against future goals.
My friend Sarah refers to this as our Law of Delayed Gratification. Daniel and I look at every dollar we spend as a dollar that could be spent later on something more important. We know what expenditures are really important to us: education, travel, time off work, living someplace enjoyable. Every spending decision is tied to these priorities. "Is it more important to me to buy this skirt/CD/guitar pedal, or would I rather save the money to spend on a trip or tuition?" Consequently, we don't have cable TV; we don't buy magazine or newspaper subscriptions (we read everything online); we don't buy iTunes; we don't buy desserts, except for company; we dry our clothing on a drying rack instead of in a dryer; we use blankets and fans instead of heat/AC; we do our own haircuts at home; we mend our clothes; we buy used textbooks online; we drink tap water (I have given up my San Pellegrino); we pack our lunches for work; we print documents at the community college instead of replacing our broken printer; we don't buy cheese every week; and we rarely try a bottle of wine that costs more than $10. Sounds a little rigorous, and it is, but we save a lot of money through these habits.

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Understandably, this lifestyle - and it is a lifestyle for us - is not for everyone. But almost any American - rather, almost any person living in an industrialized nation who has a job - can save money. We have such high levels of wealth and such little contact with serious poverty that most of us don't think of ourselves as wealthy, but we are. Most of us, if we look, can find a good deal of money in our habitual non-need expenditures that could be diverted to more important or expensive things. Like buying a house or going to school or traveling to a dream place. Or whatever you have in mind. It's just a matter of saving one dollar at a time. It add ups.