Ever since I started working, I would buy lunch on site or go out for lunch. It was rare that I brought my lunch to work. For two summers in college, I worked at Sea World. I ate lunch on-site because my co-workers did. Buying lunch was the social thing to do. At my part-time job during college, I bought lunch because I felt I had the money to pay for the convenience of not bringing my own lunch to work. At my current company, I bought both breakfast and lunch for convenience. But what was the price of convenience?
When eating out, breakfast would cost anywhere from $1.50 to $5, with the average being around $3. When eating out, lunch would cost $4 to $10, the average being about $6. Each week, I would spend an average of $45.
Ever since December, I've been on a mission to save more, and I first targeted food, my biggest expense. I joined thegrocerygame.com which is site that combines grocery sales in addition to coupons for top savings. Sometimes items are even free. I usually spend about $30 a week on groceries, and that not only covers my food for just working hours, but for every meal and snack for 7 days.
Buying groceries and bringing my lunch to work saves me $15 a week, or $780 a year. Besides the money savings, I also save time and make my life more convenient. When I bought lunch went out, I had to drive somewhere, find parking, wait in line to order, eat, then drive back. The gas is not free so driving costs me money. When I ate at the on-site cafeteria, I had to walk to another building, look around for something to eat, wait in line, wait for my food to be prepared, and wait to purchase my food before I can finally eat. The whole process for buying lunch could take an hour. When I brought my lunch to work, it takes maybe 5 minutes to prepare my food if I had to use the toaster oven or microwave, and I would not have to deal with waiting in lines, wasting gas, and wasting time. I would only spend 10 minutes preparing my lunch the night before but I had the convenience to do that at any time. So the "convenience" of fast food and paying others to prepare my food wasn't really all that convenient after all.
One last area of savings of groceries purchases versus eating out was credit card rebates. When I would eat out, I used the Chase Freedom Visa, which would give me 3% cash back. When I shop with groceries, I would use my American Express Blue Cash, which would give me 5% cash back.
By buying items according to thegrocerygame.com, my groceries vary from week to week which forces me to try new buy familiar foods. I even the the equivalent of fast food places for cheaper. My favorite sandwich at Quiznos was the Turkey, Bacon, Gaucamole, better known as the TBG. I make the exact same thing with their same ingredients: whole wheat bread, deli turkey, bacon, guacamole, mozzarella cheese. I even toast it using the toaster oven at work to get the same crispy texture. My only regret for bringing my lunch to work is that I didn't do this sooner. I would have saved thousands over the last few years.
Showing posts with label savings. Show all posts
Showing posts with label savings. Show all posts
Saturday, March 15, 2008
Sunday, February 17, 2008
Allocating my paycheck
I have two jobs, but I budget my spending around my primary job only. With an annual salary of $49,600, I make about $1908 gross each week. Because my employer offers 50% matching on the first 6% contribution to my 401(k), I contribute 6% to gain the full employer match. I also contribute 15% of my pay to the Employee Stock Purchase Plan (ESPP). I set up my Flexible Spending Account for an annual $250 contribution, which is deducted bi-weekly from my paycheck. After contributions and taxes, I receive a direct deposit of $1055 every other week. Sometimes it is higher if I work overtime, but I count overtime as surplus.
$1055 is directly deposited to my Citi E-Savings account on Friday. It eventually gets divided two ways. On Saturday, $540 is automatically transferred to my Citi Ultimate Savings account, which offers a higher interest rate than my E-Savings account. On Sunday, $515 is automatically transferred to my checking account.
The $515 from my checking account gets transferred to other savings accounts on Monday. $15 is automatically sent to ING Direct, and $500 is automatically sent to EmigrantDirect. EmigrantDirect offers a higher interest rate than all my other savings accounts. That $500 funds my house deposit fund. $15 funds my emergency fund.
The Citi Ultimate Savings account, which receives $540 from every paycheck, is my payment account. On the 15th of every month, it will automatically transfer $200 to my checking, because I automatically purchase $100 of FIGRX and $100 of FCVSX on the 15th. On about the 20th of the month, I will manually transfer the exact amount of money to pay the entire statement balance for my Merrill+ Visa credit card. On about the 30th of the month, I will manually transfer the exact amount of money to pay the entire statement balance for my Charles Schwab Visa credit card.
But what about my other bills? You may ask how I pay for them. Well for accounts that accept credit cards, I will pay by credit card (not just using the Merrill+ Visa or Charles Schwab Visa) and have those accounts setup to be paid automatically. See my previous post how I determine which credit card to use. For accounts that do not accept credit cards directly such as electricity, gas, sewage, and water, I can use the BillPay feature of either the Merrill+ Visa or the Charles Schwab Visa. Lastly, I can use the BillPay feature to pay other credit cards. This allows me to extend the period in which I pay off a purchase, and consolidate all my payments from my checking account to just the Merrill+ Visa and the Charles Schwab Visa.
After payments, any extra money in my Ultimate Savings account just sits there for months in which I have larger payments to make. Basically, the spending money is still spending money. If I get overtime and my direct deposit is larger than $1055, the extra money sits in the E-Savings account. I choose what to do with this money, and it varies when and how. Sometimes I save it (any account) and sometimes I'll contribute it to my Roth IRA.
Because I have a second job, I allocate that paycheck too. Because the job is per-diem, I may not get shifts to work from time to time. Sometimes it would be months between paychecks. I never counted on my second job as a second income so I don't allocate it the same way I do as my primary job. After taxes, 100% of the net wages are deposited to my checking account. I immediately contribute 100% of the deposit into my Roth IRA account. If I reach the yearly limit for IRA contributions, I start to send it over to my EmigrantDirect savings account.
It may seem like a complicated setup, but I configured almost everything to be automatic. I have only to manual payments to make. This configuration allows me to maximize interest by letting the money used for payments sit in my savings account up until the payment due date. And automatic saving for a goal is easier than trying to budget around spending. My spending revolves on what I have leftover after the automatic savings and investing. I automatically save 6% towards my 401(k), 15% towards ESPP, $515 bi-weekly towards house deposit and emergency fund, and $200 monthly for mutual fund contributions. Because this budget revolves around 2 paychecks per month, I end up with two months out of the year with 3 paychecks per month. An extra paycheck means I can do whatever I want with it, but in most cases I won't spend it.
$1055 is directly deposited to my Citi E-Savings account on Friday. It eventually gets divided two ways. On Saturday, $540 is automatically transferred to my Citi Ultimate Savings account, which offers a higher interest rate than my E-Savings account. On Sunday, $515 is automatically transferred to my checking account.
The $515 from my checking account gets transferred to other savings accounts on Monday. $15 is automatically sent to ING Direct, and $500 is automatically sent to EmigrantDirect. EmigrantDirect offers a higher interest rate than all my other savings accounts. That $500 funds my house deposit fund. $15 funds my emergency fund.
The Citi Ultimate Savings account, which receives $540 from every paycheck, is my payment account. On the 15th of every month, it will automatically transfer $200 to my checking, because I automatically purchase $100 of FIGRX and $100 of FCVSX on the 15th. On about the 20th of the month, I will manually transfer the exact amount of money to pay the entire statement balance for my Merrill+ Visa credit card. On about the 30th of the month, I will manually transfer the exact amount of money to pay the entire statement balance for my Charles Schwab Visa credit card.
But what about my other bills? You may ask how I pay for them. Well for accounts that accept credit cards, I will pay by credit card (not just using the Merrill+ Visa or Charles Schwab Visa) and have those accounts setup to be paid automatically. See my previous post how I determine which credit card to use. For accounts that do not accept credit cards directly such as electricity, gas, sewage, and water, I can use the BillPay feature of either the Merrill+ Visa or the Charles Schwab Visa. Lastly, I can use the BillPay feature to pay other credit cards. This allows me to extend the period in which I pay off a purchase, and consolidate all my payments from my checking account to just the Merrill+ Visa and the Charles Schwab Visa.
After payments, any extra money in my Ultimate Savings account just sits there for months in which I have larger payments to make. Basically, the spending money is still spending money. If I get overtime and my direct deposit is larger than $1055, the extra money sits in the E-Savings account. I choose what to do with this money, and it varies when and how. Sometimes I save it (any account) and sometimes I'll contribute it to my Roth IRA.
Because I have a second job, I allocate that paycheck too. Because the job is per-diem, I may not get shifts to work from time to time. Sometimes it would be months between paychecks. I never counted on my second job as a second income so I don't allocate it the same way I do as my primary job. After taxes, 100% of the net wages are deposited to my checking account. I immediately contribute 100% of the deposit into my Roth IRA account. If I reach the yearly limit for IRA contributions, I start to send it over to my EmigrantDirect savings account.
It may seem like a complicated setup, but I configured almost everything to be automatic. I have only to manual payments to make. This configuration allows me to maximize interest by letting the money used for payments sit in my savings account up until the payment due date. And automatic saving for a goal is easier than trying to budget around spending. My spending revolves on what I have leftover after the automatic savings and investing. I automatically save 6% towards my 401(k), 15% towards ESPP, $515 bi-weekly towards house deposit and emergency fund, and $200 monthly for mutual fund contributions. Because this budget revolves around 2 paychecks per month, I end up with two months out of the year with 3 paychecks per month. An extra paycheck means I can do whatever I want with it, but in most cases I won't spend it.
Wednesday, February 13, 2008
Made $1080/hr today
In my last post, I mentioned I bought a $300 sportcoat as an investment in my career. When I got home, I saw my package waiting for me. Naturally, I opened it up and tried it on. I immediately went to the Nordstrom website to compare the picture I saw online with the product I received.
The first thing I noticed was a price drop of what I paid. The original MSRP was $400. I bought it on sale for $264 (plus ~$30 for 2-day shipping and taxes), and I obviously felt comfortable paying for it at that price. Today's list price was $197.
I immediately called Nordstrom, and within 1 minute I was talking to a live operator. Nordstrom has excellent customer service. Not once did I have to go through an array of menus and make a selection, and my wait time was quick. I mentioned the price drop and asked for a refund. I knew they would process it because I have done this in the past, not just with Nordstrom but also with other merchants. It is just like returning an item at the price you paid, and then repurchasing that item at the lower price.
In the end, I was able to get back ~$72 in a span of about 4 minutes. That's the equivalent of making $1080 an hour. It pays to compare prices paid for an item for up to 30 days after purchase. For big ticket items where time is minimal, the savings potential is a high hourly rate.
The first thing I noticed was a price drop of what I paid. The original MSRP was $400. I bought it on sale for $264 (plus ~$30 for 2-day shipping and taxes), and I obviously felt comfortable paying for it at that price. Today's list price was $197.
I immediately called Nordstrom, and within 1 minute I was talking to a live operator. Nordstrom has excellent customer service. Not once did I have to go through an array of menus and make a selection, and my wait time was quick. I mentioned the price drop and asked for a refund. I knew they would process it because I have done this in the past, not just with Nordstrom but also with other merchants. It is just like returning an item at the price you paid, and then repurchasing that item at the lower price.
In the end, I was able to get back ~$72 in a span of about 4 minutes. That's the equivalent of making $1080 an hour. It pays to compare prices paid for an item for up to 30 days after purchase. For big ticket items where time is minimal, the savings potential is a high hourly rate.
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