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My Experience Doing the Uber Frugal Month Challenge

 

UFM
The Frugalwoods Website

 

The Frugalwoods is one of my favorite blogs. I’m not nearly as frugal as they are, nor do I want to be, but what I love is that their blog does help me to question some of my assumptions on frugality. Each January mrs. Frugalwoods hosts an Uber Frugal Challenge, but you can take the challenge each month if you want to. She sends out an email each day of the month with some questions to ponder and links to relevant blog posts on the topic.

Why I Participated

The reason that I took the challenge was that I’m very motivated to get as close to our maximum mortgage goal this year as we can. That is going to take some extra effort, so I wanted to see if there was anything I could get from it.

Lessons learned

The questions that were asked at the beginning of the challenge were particularly helpful of refocusing on the reason I want to be frugal. I also thought that since we’ve been budgeters for years now that there was nothing anymore that we could cut from our budget. However, we took another hard look and canceled two subscriptions that we had for years. It won’t make or break our budget, but even the small things can add up.

The only personal money I spent was on a pizza with a friend (€17) and my credit card was charged for the book The Year of Less by Cait Flanders (€17,82) which I pre-ordered in December. Other than that we spent zero money on eating out, take out, or coffee on the go. It wasn’t always easy, but it was doable. I also started to enjoy making sure I was prepared so that I wouldn’t have to spend money unnecessarily. I’m also not very good at doing monthly challenges because I don’t like the all-or-nothing nature of it. I was actually quite proud and surprised that I finished this one with success.

Going Forward

The trouble with any type of restrictive challenge is that it is tempting to go all out on a binge afterwards and undo any of the good work you did during the challenge.

There was some temptation out there for this to happen on day one. On February 1st, I had a particularly challenging day at work and I had a lot of delays getting home because of a broken train. Then I had to endure rain and hail on my bike ride on the way home from the train station. Our dinner was based on stuff we had in the pantry: lentils, black beans and some pumpkin from the freezer over rice. Not exactly a meal I was looking forward to. Everything in my body just wanted to order pizza and call it a day. I started cooking anyway and the food was just so dry and not what I wanted after that day. I added some tomato paste and herbs, but it was still not good. I was so tempted to just go out and buy something unhealthy, but I knew I would feel really bad breaking the challenge after only one day in the new month. Also, I am really motivated to save so I would feel bad about spending money on unnecessary food.

2018-02-01 18.47.48
A picture of my not-so-good meal

So I didn’t do it in the end! I will admit that I did not eat a whole lot and that I may or may not have eaten some Nutella straight out of the jar to compensate.

This is not to say that I won’t spend anything on impulses going forward, but I feel happy that I was able to break this habit for the month and it had an effect going forward as well.

Did you ever participate in a no spending challenge, and how did you like it?

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Monthly Updates

January Numbers

january 2018.jpg

I skipped December’s numbers, but I want to get back into it. What better month than January to get back on track? We tried to be very frugal with our grocery spending and personal spending money (more on that in another future post!). I’m quite happy with the results, but our savings rate for the month is still very low due to some large expenses. OK, let’s go to the numbers!

January Mortgage Numbers

We can pay an extra 10% of the original mortgage balance per calendar year in extra payments and we hit that number in September of last year. January is the start of the new year so that means that we can make extra payments on the mortgage again! That made us very excited and motivated to get going again. We transferred the first extra €1500 in January. That leads to the following results:  

Interest Only Mortgage €97.288 -€1500 change from last month due to extra principal payment
Annuity Mortgage €108.447,41 – €202,11 change from last month, just the regular payment
Linear Mortgage €5.207,31 -€14,79 change from last month, just the regular payment
Savings Mortgage* €80.000 No change
Total Mortgage €290.943,12
Savings Balance Attached to Savings Mortgage €14.596,49 +€194,34
Total Mortgage inc. Savings in Savings Mortgage €276.346,63 – €1.911,24

The original mortgage balance was €380.500. This means 27,37% of the mortgage is now paid off (0,5% increase from last month)

* The €80.000 mortgage remains outstanding until the end of the 30-year loan. Attached to this mortgage is a blocked savings account where you save for 30 years and receive the same interest as the interest rate that you’re paying on the mortgage. After 30 years there is €80.000 in the account and you pay the mortgage off.

Savings Rate**

January Savings Rate: 10,1%

Savings Rate 2018 Year to Date: 10,1%

Our savings rate in January is very low because we paid our health insurance premium for the entire year. The premiums were close to €2400 so that took a considerable portion out of salaries. We also booked our flights for our summer vacation (€650), so I’m happy that our savings rate is not negative considering all that. The upside is that we won’t have to pay for health insurance for the rest of the year so that should help with our savings rate going forward. I still hope we can get to 40% savings for the year, so we have some work to do!

** To calculate our savings rate I deduct everything that we’ve spent in a month from our income. Divide that number by our income, and that gives us our savings rate. Not included in the savings rate are pension contributions because those happen before taxes and are mandatory in our case. I also don’t include our regular principal payments.

Investments

We added 5,35% of our income to investments this month. We are focusing on the mortgage first, but we do some investing each month as well.

That sums up January 2018 for us. Did you get off to a good start for the new year?