Tag: frugal

Coupon is my friend

I love using coupon when I shop my grocery. It feels like winning lottery if the coupon can save me a dollar or two.

Last week ice cream was on sale, and I happen to have the coupon as well. So sales plus coupon is like a huge win. I loaded them up and I’m good for this summer.

When I use coupon, I try to stay in control. I’m not letting the coupon to lead me. I only buy what I need and exactly what I need. If I only like this brand, I will stick with this brand, but not let the coupon change my mind.

At the checkout station where the coupons are printed, I only take what I need, and leave the rest coupons right there for who else might need it.

My cousin is crazy about coupon. She keeps a coupon book with her. Every week she will spend half day to cut coupons from newspaper and organize them into her book. Well, time is money. It all depends if it worth the time.

My grocery shopping is quite easy, because I don’t buy too many processed food. That’s also the reason that my monthly grocery bill is less than 200, sometimes even less than 100. I only buy fresh produce, water, milk, wine, and ice cream. I shop at the local meat place for all the meat I need, and I buy eggs from the local farmer. Other household items, I shop online, once a year, load them up.

You can tell that health and grocery shopping are hand in hand. Eat less junk food can tremendously reduce the health care bill in the long run. Frugal is never about buying cheap hot dog or hamburger. Buy quality meat but eat more vegetables and fruits. Pops, chips, cookies, energy bars, those items are never on my shopping list. I don’t buy juices either. A juicer or blender, a bag of apples or oranges, they serve the needs. Fresh is only for one reason, the other reason is that you can visually see how many fruits do it take to make a couple of juice. So that you can properly control the sugar you take.

Save! Save! Save!

How much shall I save for my retirement? I’ve been thinking this question for quite a while.

I started working at the age of 22. If I work till 60 years old, that is 38 years of income accumulation. I hope I can live to 98 years old, that is another 38 years of life with no income. Maybe a little bit from Social Security.

This scenario makes the math easier.  38 years of working to support 38*2 years of living.

If I want to maintain the same life style, every dollar I spent today, I’d better spare another dollar to save into my retirement account. You might question me, oh, you forgot the time value, today’s dollar is not the same dollar after 40 years.  Yes, you are exactly right. Coins all have two sides.  A dollar can worth more due to a successful investment, or a dollar can worth nothing due to a bad portfolio or inflation.

Everyone says on average you can expect a 7% investment gain. I’ve been doing investing for over 10 years, I’m not that lucky. So I just hope my gain can beat the inflation in the long run.

Let’s hope for the best and prepare for the worst. Let’s just assume the sweet  fresh cherries are still 3.99 a pound after 40 years.

How much shall I save? it is all depend on how much do I spend today. I did my homework, calculate out how much did I spent last year. It is over 40K. Then I’d better save another 40K for that old me at the age of 60.

The other theory is the famous 4%. My 40K expense made my 4% mother value to be at 1 million. Let’s do a simple math, how much is 1 million divided by 38? That is a target of $26,315 a year.  So if I save up to 26K a year, at the age of 60, I should have 1 million in my account and I can just live on the 4% gain every year. If I save more, then I can retire early! why not!

I’d better have an annual income more than $66315, after tax, to reach to this goal. That is about 100K before tax. I don’t think USA average income is that high. Then how can a normal people like me have enough money to spend till the age of 98? I either die early or start the new fashion life style, which is called “Frugal”.