Digging deeper for the junk food failure

For years I've been tracking my spending. It started in my first year of university over a decade ago when I wondered how I could make so much money and still have none left at the end of the week. Back in the day it was a simple notebook where I wrote down everything I spent, and totalled it up at the end of the week. Over the years it has grown bigger, more complex, and thanks to Google Sheets, easier to use. and yet somehow I still can't keep control of the 'miscellaneous' spending category.

Pen and Paper

In early university I wanted to buy an investment property, so I knew I needed to properly track my money in and out. At the beginning, all I did was write down what I spent in a notebook, and tally it up at the end of the week. Then I started recording my income at end of the week, directly next to my expenses. Then I started writing down $50 a week for 'bills' and $50 a week for 'savings'. Each time I had a bill I would deduct it from the saved amount. Then I found that making big luxury purchases was hard to fit into the budget, so I started making a list at the end of each week of things I wanted, and putting $5-$10 aside for them each week.

It was a good starter system, but I couldn't really see what I was spending on over the long term. Was I a booze hound? Did I blow all my money on video games? Should I stop buying books? (never stop buying books...)

Technology revolution

A couple of years ago I graduated to Google Sheets. Now I had 12 months of my expenses in my pocket at all times. Recording my spending was easy with my phone. I never had to worry about my pen running out of ink, my book running out of pages, or explaining to everyone what I was doing.

My spreadsheet has morphed and changed over the years, to a point where I now have 1 tab for each month, with columns for each spending category. Another tab collates all that spending into one easy to see snapshot. Other tabs track money being diverted into spending, and my income - which allows me to pull out spending and saving percentages at the drop of a hat.

This visibility of my money habits has dropped my spending from $46,000 in the 2015/16 financial year, to $42,000 in the 2017/18 financial year. While not a dramatic amount, watching my spending going down, and my lifestyle staying steady (or going up?) despite inflation has been a warm fuzzy feeling of success.

Yet somehow, in all of this I've been completely unable to get a hold on my 'miscellaneous' spending category.

Digging deep for expenses

For about a year I've been ending every month by kicking myself and saying 'stop spending so much on miscellaneous crap! It's your early retirement you're wasting!'. Turns out this isn't the most effective method. A lot of things sneak into this miscellaneous category. Some I can control, some I can't. Things like care packages for my derby team mates when they break limbs, and (very occasional) lunch meetings with my co-workers are things that I agreed to when I signed up for these communities. Some things I know are wasteful (hello Red Wine!) but I love and so I choose to continue spending mindfully. And some things are just plain stupid habits, like $7 coffees every time I'm at the airport...

After utterly failing to control this spending, I did a one year review, and here's what I found:

Books - $99.91, $7.93 a month

I am absolutely okay with this! I re-read books all the time, and since I was a small child I've had my nose glued to the pages. I could get more out of this time / money by reading investing books, personal development and all that other nonsense, but I love the escapism of reading about dragons and magic. (Right now I strongly recommend The Waking Fire: Book One of Draconis Memoria )

Video Games - $46.54, $3.70 a month

This is great. Once upon a time I had a bad habit of buying Steam games that I never played because they were on special. It's nice to see I've properly kicked this habit. All the games I've bought recently have twice as much playtime as dollars spent, which is a great Dollar To Fun ratio.

Alcohol - $382.56, $30.38 a month

This is one where I know I could spend less but I don't want to. The majority of my spending is on Red Wine, and I am super sneaky about it. I buy bulk, mixed packs from places like Virgin Wines, and Qantas. I always wait for a sale, and always get things at significantly reduced prices, generally with bonus frequent flyer points.

I do have long term plans to brew my own beers and ciders, but I'm not sure what the savings will be. It's something I plan to do for fun, rather than financial gain.

Clothes - $52.00, $4.13 a month

I have a confession to make - I hate buying clothes. Nothing fits properly and nothing suits my style. Why are bras so expensive? Why does underwear come in 7 different cuts and what is the different between 'boy leg' and 'full brief''? Why is it so hard to find a comfortable pair of jeans that aren't blue or $100?

The end result of my clothes shopping hatred is a super low bill, clothes that come pre-worn from the thrift shop, and underwear that is a decade old....

Medical - $226.60, $18.00 a month

This is excluding my health insurance, which is $91.61 a month for hospital and extras. $18 a month this year has covered contact lenses, 2 trips to the GP, multiple trips to the physio, and a trip to the dentist. I actually think I should spend more here and take better care of myself.

Comfort food - $785.15, $62.35 per month

What, what, What!!! What madness is this!! I've written before about the Latte Equation and the stupidity of paying $5 for takeaway coffee when you can make your own for barely 50cents (using the expensive milk). I've gone on and on about the virtues of baking your own treats and making your own snacks. And here I am spending almost $60 a month on comfort food, how is this happening!

First of all, December happens. In December all your friends want to go out for dinner. All your coworkers want to go out for lunch. And I want to buy Christmas treats. All of this is expensive. In December alone last year I spent $215 on comfort food.

I'm not too mad about December. I love my family and friends, and we're all pretty quiet throughout the year, so having a month of events is okay by me. What is not okay by me is keeping up this crazy spend throughout the year. I found $50 worth of coffees, $100 worth of pizzas, and over $100 worth of entries just labelled 'Junk Food'.

Alone, each of these entries isn't too offensive. But when over $60 a month is disappearing into this chasm of cheap, lazy snacks, something has to change.

Everything else - $2,059.08, $174.95 a month

Inevitably, when sorting out the miscellaneous column, there will be things that don't deserve their own category. Items left in this everything else category include crafting supplies, that time I paid for parking at the hospital, concert tickets, and odds and ends like replacement charging cables, some rammekins and a pair of scissors. While there is a lot of uncategorised spending here, this is a number I'm happy to live with for now.

Where to from here?

In case my rant and the title of this post didn't give it away, I'm less than thrilled with spending $60 a month on comfort foods - especially when I'm more than capable of baking better tasting things myself. 

I'm a very firm believer that what gets measured gets done, as long as the measuring is accurate. To bring the comfort food spending back to a happy level, I've created a new column in my budget, and allotted $50 a month to snacks, junk food, takeaway and other deliciousness. I'm 'funding' that column with $10 out of my groceries budget, and $40 out of my miscellaneous budget.

I'm under no illusions that this will be properly managed in December. While I believe in controlling my spending, I don't believe in cutting out my friends to do so. When I get invited to Christmas outings, I'm absolutely going to go. Then when January rolls around and everyone is burned out from celebrating and feasting, I'll tackle this in earnest.

DTF: dollars to fun ratio

What is your DTF rule? Do you have a pretty loose DTF ratio? Or are you super tight when it comes to DTF?

No, I'm not talking about the Urban Dictionary definition, I mean the Dollars To Fun ratio.
As part of the Financial Independence and frugality movement, I think a lot about the value of my spending. Does buying the expensive name brand bread increase my happiness enough to justify the extra dollar on the price tag when compared to the sad floppy home brand stuff (Hint, it totally does).

There is a huge difference between cost and value. Cost is what you pay for it. Value is what you get from it. Put simply, a loaf of bread costs me $3.40. I value it because I'm hungry, and it goes well with soup. When it comes to the DTF ratio, I use it to consider whether the cost of something is worth the value I got out of it. Specifically, I use the DTF ratio to look at entertainment.

Before I stumbled across this whacko idea of retiring early, I would look at home much I earned per hour and I decided that I would pay about half that for an hours entertainment. I should probably clarify that this was back when I was living at home and I could afford to blow every dollar I made. This rule worked out great for me! Movies for $10 fit well within the DTF rule. I could buy a video game at $80 because it was easily going to consume every night for a few weeks. Gigs met the DTF rule because I had to listen to all the music before I went to the live show (yes, even factoring in the cost of the album, it was still DTF-approved).

Thankfully this hasn't come through to my adult life, but for many people it has. That motorbike I'll hardly ever ride is $2,000 but I make $100,000+ so it's DTF-approved. A yacht spends most of it's time tied up at the dock, but I'm rich so DTF. I've had a lousy day at work earning $30 an hour and these shoes are only $50 and so cute, DTF!!

Consumer spending has got to be the number one cause of debt in Western society. We are constantly advertised at and told we deserve bigger more expensive things. In my quest for FIRE I have tried to move away from this.

My ideal Dollars To Fun ratio is a mere $1 an hour. For $1 an hour I'm DTF.

Amazingly, a dollar an hour goes a really really long way. Mr. FIRE and I went fishing on the weekend. We spent $7 on bait and spent five hours down at the seashore. We would have had dinner from it but it turns out we need to learn to fillet properly, but my hens got a good feed of fish scraps!

A dollar an hour pays for most books of the Amazon Kindle store. Assuming you read them more than once, and don't buy books the day they are released. My favourite author has a new book out for $17.99, but the one she released last year is a mere $6.99. By employing the magic skill of waiting, I can have the book and still meet the DTF ratio.

Video games used to be my biggest wealth thief. A new release console game sells for around $80 to $100. Despite the hours of game play they swear they have, most games fizzle out for me around 20-30 hours, and then the cost of buying the console on top of that means that I don't buy or play as many games anymore. However I still play all my old games, some of which have over 200 hours play time across two or three different play through.

According to Steam my most played game is The Sims3 (I'm not proud of that) for 68 hours. I bought it for $12. On the other hand my library is full of pointless games that I paid a dollar or two for and only played for 10 minutes. Even worse is the collection of games I bought in a bundle and never touched. Frugal fail.

Of course, not everything can be bought for a dollar an hour. I love rock-climbing. I play roller derby. I've been wearing a True Grit wristband for years even though I've only been on two events (I should really take that off...) These things weren't even close to meeting the DTF rule. Rock climbing is about $5 an hour, plus gear costs. Derby is $80 a month for 24 hours worth of training. Rather than berate and guilt myself for these 'expensive' pleasures, I simply crowd out other expenses with low cost activities.

I might spend $80 a month on roller derby, but slacklining is free (apart from the initial purchase of the line). Fishing was $7 for two people for a few hours, hiking is free and if you know what you're doing both of them give you a chance to pick up a free dinner.

In my quest for financial independence, if the balance is right, I'm always DTF.

Thanks for letting me write a blog entirely devoted to DTF. I'm looking forward to the google traffic for this one! Leave a comment and let me know what you consider a fair price for entertainment.