Andy Hough

January Expenses

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Here is a breakdown of my expenses for January.

Household

$390.49

Utilities

$150.99

Transportation

$112.23

Food

$119.73

Entertainment

$61.83

Books

$129.42

Total

$964.69

 

I’m happy that the total was under $1000 but I do have some areas in need of improvement.  My goal for food is $100 a month and I’ve been going over that.  The main reason I’ve been going over is that I’ve been buying too much junk food and fast food.  That makes going over doubly bad.  It will be the main area I concentrate on for February.  My utilities were too high with my gas bill being over $100.  I’ve already taken steps that should cut that down significantly.  I won’t have a book expense this month unless I decide to buy some study aids.

The category of transportation was down quite a bit since I only worked half the month.  Also I didn’t need to do any repairs or maintenance.  That will change this month since I plan to have some work done on my car.  Household and entertainment expenses should be roughly the same.

Blogging Hourly Wage

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Most small PF bloggers such as myself don’t make much money from blogging.  I would guess that last year I didn’t make minimum wage for the hours I put into blogging.  I’m not sure since I didn’t keep track of how much time I spent on blogging.  Making a return on my time invested isn’t much of a priority since I do this for fun more than for profit.  I make most of my money from my blog Bank Bonuses.  This blog is barely monetized but it still makes a profit since it costs me very little to run.  This month has probably been my best money making month for blogging yet.

I’ve decided that for February I’m going to keep track of my hours spent blogging so I can calculate my hourly blogging wage.  Then I’m going to see what I can do to increase my blogging income.  Since I won’t be working the next few months any increase in blogging income will be helpful.  I like having the home page of this blog ad-free though so I’m going to try to keep it that way or at least keep any ads as non-intrusive as possible. I’m open to any suggestions and I’d be interested in seeing if there are any other PF bloggers that share their income.

Reducing Heating Costs Experiment

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My latest gas bill was for $103.  This is much more than I paid last year.  My highest heating bill last year was $61.  The gas customer charge is $15 higher than last year but most of the increase in my bill is from using more gas. I know the apartment I’m in now is poorly insulated but so was the apartment I was living in last year.  The furnace in my current apartment must be extremely inefficient.

Being a tight-fisted miser I don’t like paying this much for heat so I’ve decided to try an experiment to reduce my heating bill.  I’m turning down my thermostat to 55 degrees and am going to use an electric space heater to take off the chill in the evenings.  I won’t need it when I’m sleeping because I use my down sleeping bag as a blanket and it can keep me comfortable at temperatures much lower than 55 degrees.  Also I’m going to try to take my showers at the fitness center.  I still haven’t gotten into the habit of working out this year but this will give me one more incentive to get to the fitness center.

I have no doubt this will work to cut my gas bill.  I’m just not sure I’ll save enough on my gas to make up for the extra electric cost.  I receive my electric bill a couple weeks ahead of my gas bill which will give me an idea if this will pay off.

Drive A Hoopty

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Next to a house, a car is probably most people’s largest purchase and spending category.  That makes it one of the best opportunities to save money.  I think the best way to save money on a car, besides not having one at all, is to drive a hoopty.

There are several advantages to having a hoopty.  The first is you won’t lose much to depreciation.  New cars often depreciate 20-40% in the first couple years.  A hoopty won’t depreciate much because it is already so cheap.  I plan to drive my hoopty until it only has salvage value so I’m not worried about depreciation at all.

Another advantage is that I was able to buy my car with cash.  This allowed me to avoid paying interest on a loan.  Also, since I didn’t have a loan I was able to get liability insurance only.  This is a significant savings over comprehensive insurance.  My liability insurance runs just $20 a month and that is for more than the state required minimum coverage.

Still another advantage is I don’t have to worry about the appearance of my car.  This car has picked up various door dings and other minor dents and scrapes.  Since this car is a hoopty they don’t bother me at all.  If I had a new car these would have upset me and possibly required expensive repair.  Also besides washing the car to remove road salt there isn’t really any point in washing and detailing the car which reduces that expense.

Some hooptys also have the advantage of being green.  My car gets 29-30 mpg doing pizza delivery.  That is better than most new cars.  It is estimated that production of a car contributes 10-20% of its total lifetime CO2 emissions.  By keeping the car on the road longer that percentage is reduced.

Many people think that all of these advantages are wiped out by the need for repairs.  The need and cost of repairs can be reduced by by buying a car known for reliability.  Knowing an honest, good, and inexpensive mechanic is also extremely helpful.  My car has needed several repairs but has always started for me.  Even if you buy a new car there is a chance of being stuck with a lemon.  With a new car you have a warranty but that lasts for a limited time.  If you trade your car in every time the warranty is about to expire you drive up your cost of ownership even more.

Even with the added cost of repair the cost of my hoopty compares very favorably to a new car.  I paid $1750 for my car and have driven it over 80,000 miles.  I estimate that I have paid about $1000 in repairs on the car not including standard maintenance.  If my math is correct this comes to 3.4 cents per mile.  If you buy a new car for $20,000 you’ll have to drive it hundreds of thousand of miles without any added repair expense to come close to that figure.

I know that hooptys aren’t for everybody but if you can put aside your vanity this is one of the best ways to reduce your expenses.

My Credit Cards Paid Me Last Year

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Last year for the first time ever my credit cards made me money instead of costing me money. I received a $150 bonus for signing up for a Sony card and then another $25 bonus for charging $100 on it. I also cashed out $20 cash back from my Discover card. I earned an additional $13 cash back from Discover and $60 cash back from Chase that I haven’t yet cashed out.

I also engaged in some credit card arbitrage. This was roughly a break even endeavor since I decided to end it early and use the money to pay off debt. If you consider the savings on paying off the debt than I came out slightly ahead.

I paid a total of $1 in credit card interest for the year. This was due to forgetting about the 0% interest rate on my Chase Freedom card ending.

The reason I made my money from my credit cards last year is that I was disciplined in using them. I didn’t charge anything on them but purchases I would have made anyway that I knew I could completely pay off before interest accrued. Credit cards can be a good tool if you are disciplined in using them.