I have always been frugal. When I first started my PhD, my yearly stipend was $21,500. This was the first time in my life I had a “job,” so I was looking in ways to optimize my spending. I vaguely remember attending a talk (put together either by the graduate school or the international student center) that mentioned opening a savings account and placing some money aside every month. I did just that. I don’t remember how much my monthly paycheck was after taxes, but every month, I put $600 in my savings account.
After about a year, I had about $5000 in the savings account, so I started moving some of it into CDs. That was pretty much the extent of my knowledge in financial literacy, and I didn’t learn anything new for the next 20-years.
For years, I kept up a spreadsheet for my monthly expenses. It started out as even itemizing grocery purchases (spinach, nuts, eggs etc.) but now I just lump them together as “groceries” and “eating out” categories for food.
In my spreadsheet, I have tabs for each month, and then separate tabs for travel, taxes, and medical expenses. Which means I have columns for bills, food, transportation, pet, and miscellaneous expenses for each month. This pie chart shows my March 2023 expenses out of my take-home pay (after deducting taxes, social security, Medicare, health insurance, and employer-based retirement contributions).
Bills: Heating/cooling, water, home and car insurance, phone, streaming service, home security system. I own my home outright so I don’t have rent or mortgage payments.
Food: Groceries and eating out
Car: Fuel, routine expenses like wiper blades
Misc.: Anything from clothes to soap to cost of mailing a gift for a friend.
Pet: Food, vet bills, oatmeal shampoo etc.
Not included: Medical bills, travel expenses, property taxes
March was a low-expense month for me. I saved more than 70% of my take-home pay. As an academic in a lowish-paying institution, I am not exactly bringing in big bucks. However, being frugal and living a full life helps me inch towards FIRE, and I am grateful.
