Big Changes come from Small Intentions

When we decided to pursue financial independence, we were in a very transient time in our lives. We moved to America in late 2013 for Mr. LLC’s job, knowing that we would eventually return to live in the UK but without a timeframe as to when that might be. So, 9 months ago when we decided to implement Operation Lake District, we sort of developed a halfway house of spending reduction and turned our attention to mindful spending.

A Focus on Mindful Spending

We reduced what we could easily identify and decided to track our spending over a few months to see what patterns emerged. We have always had a budget and tracked our money, so this was not a huge undertaking or task but we went forth with a slightly more conservative mindset about our consumption, knowing that any savings we could make, would bring us closer to our goals. 

For us, this began as an exercise to reduce our monthly outgoings. However, as time has progressed, our attitude to spending money has changed. We are now very conscious of where every pound (or dollar at the moment!) is going and if it is money well spent.

So, what did we change and what didn’t we in the few months after Operation Lake District was born?

Things We Changed

Our TV viewing setup (including Internet, Netflix and HBO)
We switched up our viewing situation, ditching cable for Amazon Fire TV and Playstation Vue and changed to a new internet provider with a new customer introductory rate for 12 months. Previously, we were paying $165 for cable & internet (with HBO included). It wasn’t until we were looking into ways to save money and consulted closely what we paid for cable that we discovered, included in our monthly bill was a rental charge for the cable box and router! That gave us greater motivation to get rid of cable and taught us the tough lesson of making sure you know exactly what you’re getting into when you sign up for things. We can’t recoup that lost money of the equipment rental but we’ll know going forward to be extra careful with the t&c’s!

I know some people can survive just fine without paying for TV & in the UK, although you have to pay your license fee if you want to watch TV, there’s Freeview which is more than enough channels to get by on. In our household, Mr. LLC is a huge sports fan, so sports channels are a must. Watching the English Premier League football games is actually much better in America than in the UK as they air every single game on NBC. So, we knew we needed some form of access to TV channels and couldn’t survive with just Netflix alone, which is where Playstation Vue came into the picture. We’re happy with our saving in this category, as we have a like for like service but the cost has been reduced and is $55 a month cheaper.

Reduced grocery costs
Grocery shopping where we live is difficult. I’ve always found it difficult since I moved to here and I truly miss those heady days of Tesco Click and Collect where I’d order my shopping on the train to work and pick it up on a Friday night after work. I literally cannot WAIT to be able to grocery shop in the UK again – partly for the convenience and partly because I really believe I can make much more significant savings there than I can here (hello Aldi!).

I find grocery shopping difficult here because I don’t have a car and have to travel a fair way on public transport to grocery shop. I do not, nor will I ever get groceries delivered here because I think it’s overpriced and I’m picky about what I eat here (high fructose-corn syrup, I’m looking at you). There is a grocery store in my neighbourhood but it’s overpriced and the quality is not very good; so, yes, it is my choice to travel further to get my groceries but it’s still not ideal.

Pre FIRE, we pretty much shopped at Whole Foods and used Trader Joes as the store where we picked up those bits they either don’t sell at Whole Foods or are a lot cheaper in TJs. Post FIRE we simply made the switch of shopping exclusively at Trader Joes. It’s still pricier when I compare it to the UK and there’s less variety and ways to save money (they don’t generally do BOGOFs, 3 for 2’s or other promotional deals here) but we have seen our grocery bill reduce to justify the switch. For the first month or so, I really analysed what I was spending at Trader Joes and compared it to Whole Foods and I think the difference has been that TJs isn’t outrageously cheaper, it’s just that each item costs $0.20 to $0.50+ less than at Whole Foods and that’s where the savings add up.

We have always had a good approach to grocery shopping; we do not use meal kit delivery services or have an excessive amount of takeaways. We cook from scratch (apart from the occasional frozen pizza), always write a list before shopping, keep a meal plan and 95% of the time make our lunches for work. So, there weren’t obvious categories to eliminate/implement to save money, it was more a case of switching cheaper alternatives and eating more vegetarian meals. Overall, we haven’t drastically slashed our grocery spending and I think in part it’s due to the high cost of groceries where we live but this is definitely a category I’m looking to reduce costs on more in the UK.

Reduced discretionary spending.
We still have money for vacations, eating out, takeaways, buying gifts for each other and other people, days out and the whole plethora of things that can and do fall under the category of discretionary spending. However, our approach with this category was not to eliminate or deny ourselves anything but to be very conscious of our consumption in these areas and to spend as little as we are comfortable doing. This is very much a category we have been and will continue to track as get further into our FIRE plan but so far, we’re happy with our approach, what we’ve reduced so far and with the knowledge that FIRE will be achieved faster if our discretionary spending falls, with the extra money being thrown into the savings.

Started investing.
We weren’t investing already? Nope, although the intention was there. We set up a brokerage account in September 2011 but it lay dormant for 4.5 years before we did anything with it!  We left the UK with money in ISAs and the original plan was to just have them sitting there until we moved back. However, as we implemented Operation Lake District, it was a no brainer to move the ISA money into the brokerage account and let it sit there instead. I’ll be going over our investment strategy in another post but suffice to say, we’re happy with our decision and with the gains made so far.

What we are Constrained by

Rent (and electricity bill)
According to Business Insider, we live in the 11th most expensive city in the world. And we also do not live in the cheapest apartment in the cheapest neighbourhood in said expensive city.

The thing is, we love where we live and we didn’t move here with the FIRE mindset we have now. We are still able to save a fair amount after the rent comes out every month. It’s not ideal but we’re comfortable with our decision. As we implemented FIRE so late on in our time here, the costs associated with moving negated the savings from the reduction in rent. As we’re in a transient time in our lives, we’re fine where we are, knowing that we’ll focus on finding a cheaper place to rent when we move back to London. We also have no control over our electricity provider as the landlord bills us monthly, so the trick is to spend as little as possible!

What we Didn’t Change

Mobile phones
We pay $100 a month for our 2 phones and we were reluctant to start looking elsewhere for deals as we’re with T-mobile who give allow us to use data and texts internationally, so when we go back to the UK to visit family or even to Canada and the Caribbean on vacation, we incur no extra costs.

Transportation costs
We don’t have a car and we pay around $200 for both our monthly unlimited  travel cards for all our travel needs (Mr. LLC benefits from a workplace pre tax transit account to realise a saving on his monthly travel).

Charitable giving
We’re not scrooges! We still place huge importance in giving back and FIRE isn’t going to stop that.

Changing our Attitudes

As well as changes to our actual monetary spending, our attitude towards money has also altered.

Take me as an example. For as long as we’ve had a budget, we’ve always had an allocation of spending money for ourselves – individual monthly spending and money to spend as a couple. My thought process for as long as I can remember was ‘I have x amount of money this month, what can I spend it on?’ I thought that because I had that much money to spend, I had to spend that money. I’d just be buying a new top here or some new shoes there and it was great because I wasn’t going over budget. And, if there was a particularly high spending month and I overspent, we’d just absorb the cost because we have generally always spent less than we earned and so the result would be slightly less money saved.

Now, my whole philosophy has changed. I look at it that I have money if I need something but it doesn’t all need to spent. In reality, I don’t want for much and now appreciate that if I spend as little as possible on myself, that’s more money for the savings. This new approach has also massively altered my psyche and emotional wellbeing! Before, I would get so stressed if I overspent. I saw that monthly number as fixed and rigid and it would upset me that I overspent. Now, I feel very carefree and actually enjoy challenging myself to spend as little as possible! There’s probably a lot here to be said about budgets and if they’re good/bad; I think it depends a lot on the individual but overall, for us, they work.

As I said, we’re in a transient time right now and this won’t be our reality forever. Things will change when we get back to the UK. Some costs will increase, others will decrease and we’ll be met with new costs we didn’t have in America. I’m looking forward to the challenge of keeping our spending as low as possible when we get settled back home but for now, I’m happy with the changes we implemented to reduce our spending. Considering our FIRE plan began in March, our January to November savings rate is 41%, which isn’t a bad start!

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