Economic Shutdown: A Household Financial Cleanse With Eddie & Rebecca Goepp - The Final Week

Untitled-design-81-600x450 First of all, May has flown by as we look back on it. To be honest though, it feels like a lifetime since I’ve been to the liquor store and since Rebecca has taken EB to her favorite place in Atlanta, Dog Days (EB’s favorite place that is). Which, for all you dog owners out there, is a great place to let your dog play during the day while you’re at work.

I guess that’s how time works though…when you think back on it, it feels like a whole lot of it has passed by so quickly…but at the same time it feels like “forever since ____” (you fill in the blank). Don’t worry I’m going somewhere with this thought. It highlights to me the importance of a couple things:

  1. Take one day at a time. If you wish time away in order to get past a certain hurdle or milestone, you’ll end up regretting the time that you forgot to cherish. I remember classmates in college who used to wish final exams away. The fact is, once exams were finished, you were on to the next semester, year or even worse, graduation! (Full disclosure, 97.5% of Georgia Bulldogs want to stay in college as long as possible)
  2. Enjoy where you are and who you’re with because each day has a beauty of its own. This becomes more and more evident as we get older. The people you encounter each day have a whole life worth of stories behind them and each one is unique. Don’t miss out on that. To rush by without taking the time to be kind or offer a smile only deprives someone of a pleasant moment.
  3. Learn from each day and apply it to tomorrow. There’s a huge difference between wisdom and knowledge. Knowledge is learning from each day, but wisdom is applying it to tomorrow. Don’t let time pass you by without attaining knowledge AND applying it.

So, as we wrap up this month of our Economic Shutdown, the most important application we can take away is to apply the knowledge we’ve attained. The point was not to rush through May and get to June so we could get back to spending. As Rebecca alluded to in a prior post, to forget May and blow it out in June would not only be wiping out the hard work we’ve done but would be taking a step backward in our spending and, more importantly, saving habits. More on this in a bit.

Now, on to the results…We’re happy to report that we ended up saving over 35% of our take-home pay! It was 35.3% to be exact! That doesn’t include our 401(k) contributions, which we’re both maxing our employer’s match and we contribute to a Health Savings Account (HSA). We also set aside about 3% each month to a cash savings account for our 1 – 3-year expense fund. This account is above and beyond our emergency reserve fund. Sorry, enough financial planning. Back to the results, that 35.3% was previously being spent! As many of you are now well aware (Wela-wear…I’ve been pushing this as a new line of clothing to promote our company, ha!) most of that was spent dining out sporadically or just generally slipping through the cracks. And we weren’t blowing it out at Bones every week either. The little decisions that we make each day add up in a big way. This month has been living proof of that for us.

It’s easy to spot the $8 to $10 dollars on lunch each day or hitting up Starbucks each morning that can derail your budget but I’ve come to realize that going to the grocery store and only buying food for one meal is another “budget buster” that often gets overlooked. Costco is a great example of this. You can’t effectively buy for one or two meals. Whether it’s Costco or Kroger, how many times have you gone to the store and spent $30+ dollars and gotten home with only enough for that night’s meal? This is a case where cooking at home doesn’t necessarily save all that much. However, planning for a week(ish) of meals can make a Costco run the best deal in town. And Rebecca has done an absolutely phenomenal job with meal and grocery planning.

In an attempt to apply the knowledge that we’ve attained, we are moving this bus down the Economic Slowdown road. So what does this look like? Well, to be quite honest we’re not completely sure yet but the intent will be a continued focus on our savings. It’s important to realize that saving money can be done in a few different ways. Finding the most feasible way for you is important. Here are a couple ideas of how to save:

  1. Envelope Method – Some call this the Dave Ramsey method. It certainly has its merits but isn’t the “be all end all.” For those of you who don’t know, the idea is to apportion cash in envelopes each month for different areas of spending. When the money runs out, you stop buying things until the next month when you fill it back up. This is great for those who have trouble with credit cards or with keeping track of spending.
  2. Pay Yourself First – This will likely trigger memories of conversations with your parents. Regardless of age, that seems to be the “go-to” money advice that fiscally responsible parents pass along. It’s fantastic, though! And needs to be adopted by all those who hear it. Treat your household like a business…AND NOT LIKE THE GOVERNMENT!!! Businesses have an income statement, balance sheet and statement of cash flows. So does your household. Ask yourself, would Warren Buffet invest in my household? Paying yourself first means treating your savings like a bill. You have to pay your mortgage otherwise the bank takes your house. Think about your savings account (401(k), IRA, Brokerage Account, etc.) in the same regard.
  3. Budget Top Down – This really is a continuation of point #2 but the idea here is - save first and then spend second. If you allocate 20% (and that’s the solid recommendation these days, not easy to do I might add) to your savings then you can feel better about spending the remainder.
  4. Budget Bottom Up – This is the exact opposite of point #3 but has merit as well. Some households prefer to figure out what you must spend money on each month and then see what is leftover. I must warn you, though, this becomes really easy to spend everything. But with the right discipline, this approach works too. Oftentimes this approach helps identify areas of fat that can be cut out of the budget.

As for our household, we have done a little of each but fall within the #2 & #3 methods when you boil it down. Our plan is to loosen the purse strings a bit, as the saying goes, but not spend at the same level as before. In all honesty, some of the lessons we plan to carry forward include meal planning and bringing breakfast/lunch to work each day. Those are fairly easy to do and were identified when we looked at the details of our budget (a bit of method #4 from above). But in the areas that we do go back to spending money, we’re going to do so viewing those expenses through a different lens.

A key takeaway in all of this is to keep things in perspective. Money is a very difficult topic to navigate. It’s easy to spend, tough to save, taboo to discuss and often times confusing to understand. But don’t let it get in the way of life. A quote from Martin Sheen in Wall Street (the one from the 80’s) “Money’s only something you need in case you don’t die tomorrow”. That may be a bit laissez-faire, but the idea behind it is keep money in its proper place. Don’t let it get in the way of your relationships, your time with friends, family and loved ones or allow it to cause anxiety. A recent study from one of the best retirement books on the marketplace (You Can Retire Sooner Than You Think by Wes Moss) seeks to answer the question, “Does money buy happiness?” The solution: Yes, but only to a certain point. You’ll have to check out the book to get the full rundown, but the idea it highlights is one that speaks to our human nature. If it gets in the way of what is really most important in life, it actually decreases our happiness.

So, this month has been great on many fronts. It’s highlighted that we don’t need all the things we think we need to be happy. It’s shown us that the value of a little planning can go a long way! It’s reminded us to be grateful for all the things we have and highlighted those things that are of highest priority.

Rebecca:

I’m not sure how much I have to add after reading Eddie’s portion this week. He has summed up this experience eloquently. This month, to me, has been a much-needed opportunity to slow down. (Literally, slow down, saying no to social engagements in order to save money has given Eddie and me a lot of time together just the two of us.) I LOVED having Eddie and I getting home at the end of the work day to take our pup for a walk or to the park and then cooking dinner just the two of us (particularly as I realize that we won’t for much longer be just the two of us!)

Even on days (and there were plenty) that ended with an unscheduled bath for EB…

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This month has also given me permission to step away from the incredibility demanding consumer culture that we live in. It made me aware of all the emails that clutter my inbox each day boasting a sale or a deal, and it was quite satisfying to simply hit delete.

Eddie and I both felt reasonably confident about spending on clothes not being a great temptation during Economic Shutdown, and I had to laugh a little when all of my clothes starting to get a little too tight far sooner than I had realized they would during pregnancy. I have to extend a tremendous thank you to my dear friends that have shared with me their maternity clothes. Lollie, Laura, and Brittany… THANK YOU!

Eddie and I both are truly blessed with incredible friends and family and their generosity is so appreciated. We could have easily allowed this month to be “Mooch May” rather than “Economic Shutdown” based on friends and family having us over for dinner or perhaps even sneaking EB a dog treat or two… so I will end this blog with a resounding and heartfelt THANK YOU! Thank you to Eddie for coming home with the crazy idea of a blog. Thanks to our friends and family for putting up with us. And thank you to everyone that has read this! I’ve been overwhelmed by your feedback and comments.

Happy Saving!