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By the author of the FREE online course Growing Self-Sufficiency: The Whole Picture
As 2023 draws to a close, I can only say, “Good riddance!” This has been a challenging year for me, with a difficult health issue that caused enormous financial hardship. So, as the year is about to turn the corner, I look forward to a healthier, better year and a frugal 2024.
While I’m not much for New Year’s Resolutions, I do like to do a bit of a financial year-end review in December and set some goals for the coming year. I thought I would share some of what I do with the Frugalite community in the hopes that you might also share your own ideas and processes.
Reviewing My Monthly Budget
While I do keep track of my spending every month, I like to do a detailed review at the end of the year. So, I recently took out a piece of paper and wrote out everything I spend money on each month. This includes all bills, as well as spending on things like gas and food. I also tried to think ahead about seasonal items, like oil spraying my car or tire changeovers.
I went through this list and gave consideration to each and every item. I asked myself, “How important is this item? Is it something I can cut?” As I already have a pretty pared-down budget, the answer on many items (like my taxes, my propane to heat my water) was, “No, this is needed this year.” I’m keeping my $ 20-a-month flip phone and my modest 11-year-old five-speed car, Lucky, which is already paid off.
However, there were two items that I wondered if it would be more beneficial to cut them. For those two items, I am taking additional steps.
Considering Expenses to Cut
There are two items that I am considering whether to cut or not: home internet and my extended health insurance.
For the home internet, I gave some thought to how much I use it. I tried to imagine a week without it and how I would get around it. The only alternative for me would be to drive to a local library. I discussed with family members that I use the internet to keep in touch with what they thought about my not having it. After going through this process, I concluded that keeping this service for now is better, given how much I use it. However, I am planning to call my provider to request a better deal to see if there is any wiggle room in my rate. (If this is something you’ve considered cutting, here’s an article about it.)
Considering whether to keep my extended health care plan is a bit more complex. In order to make a decision here, I asked my dentist to generate a list of my usage since I started using the plan three years ago. I need to add up the monetary value of my dental coverage and subtract the 15% I still have to pay. How does this add up against the cost of this coverage, which has been going up and up for the past three years?
I don’t get much use of the other benefits, as paying for services like a massage is too expensive when I only get $20 off per visit. Is it worth it to keep this coverage only for the dental benefit?
The only other item offered is a small life insurance benefit. However, this seemed like a better perk when the cost was lower. I plan to get a quote to see what equivalent life insurance would cost if I just bought it as a standalone policy. So, I have some homework to do on this decision over the next few weeks. I will also contact this provider and see if there is another plan that would suit me better.
Reviewing My Priorities for a Frugal 2024
Now that I have established my monthly budget: what will stay and what might go, I can reflect on my financial priorities for the year. For me, having just been through a year with some financial strain, I would like to build an emergency fund.
My other priority is to pay down my debt. I have one small loan outstanding. As part of my year-end review, I looked up all the details of my contract and considered what would be best. As it is locked in at a rate lower than my line of credit, and the payment is reasonable, I will continue to pay this every month. It will be paid in two years. On the other hand, my line of credit is on a floating rate and could still go up. I am prioritizing paying this off.
Setting My Savings Goal
With my priorities set, I looked at my projected earnings and set an achievable goal for saving towards my emergency fund each month: $150. As I’m paying interest on my line of credit, I will get my emergency fund to $1,000, and then I will use any and all extra cash each month to pay down the line of credit.
Allowing for Some (Thrifty) Wiggle Room
I live a frugal life these days. However, I believe it’s important to enjoy some treats now and again. In the new year, I plan to treat a good friend to a pizza supper. We’ll get caught up over delicious pizza and support a local business at the same time. Win-Win.
To me, a real luxury treat would be to buy a small bag of organic trail mix for less than $5. So, yes, I’ll buy that a few times this year. I’m craving some nice herbal teas for winter, so I plan to buy a couple of boxes to supplement my own collection of dried herbs from the homestead. I have everything I need in terms of clothing, winter clothing, and household goods.
I recently bought a little Brown Betty teapot at our local thrift shop. It came with the most beautifully crocheted tea cozy that fits it perfectly….in the ugliest colors – a bright red and white. However, I love it dearly and have started having a cuppa every day. I decided to buy a collection of three nice tea cups and saucers for entertaining. My first one cost me $2 today at the thrift shop. So, that whole shopping process will entertain me and cost next to nothing.
My local library just lent me the most recent Booker Prize-winning novel…for free! I am also listening to an amazing spiritual retreat – a six-hour podcast by one of my favorite teachers, through our digital library platform called Hoopla.
I feel fortunate that, as I face the new year, I already have everything that I need.
A Frugal Year Just Doesn’t Happen on Its Own
Frugality takes some planning. Could you see yourself trying any of the tips offered here to plan your frugal year? Do you have one you can share with us? Please tell us about your wins, losses, and goals in the comments section.
Colette is passionate about sharing her knowledge of thrifty living and self-sufficiency. She has developed her skills in self-reliance living in the suburbs, the city, and more recently, on her own Half-Acre Homestead. Colette lived five years completely off-grid and without running water in an eight by 24 foot tiny home while designing and building her own 18 by 24-foot eco-cabin. Her website, Half Acre Homestead is attracting followers from around the world who want to become more self-sufficient. Colette invites you to stop by the Homestead and check out all of the great resources including the practical How To Guides, A Tiny Home Resource Center and her organic gardening stories on her blog. She shares her wholistic model (body/mind/spirit) for achieving self-sufficiency in her Free Course, “Growing Self-Sufficiency: The Whole Picture.” Stop by the Homestead today to register free of charge!