So I was out working with one of my lawn crews the other day, and I noticed something that got me to thinking about our lives as typical Americans. My best worker, Carlos was buying his refreshments for the morning at a local convenience store. It was an especially hot and humid summer day in Houston, so he was stocking up on Gatorade and energy drinks. A large Red Bull, a Mexican Coke and two 32oz Gatorades totaled somewhere just north of $9. He would toss these in the cooler for now, but they would be gone by lunch time, when he would buy his afternoon stockpile. Wow, I thought, this guy makes $12 an hour, so he’s spending over 45 minutes of his morning pay just for his beverages. I wonder what he would say to giving up his drinks if he could get off 45 minutes early. Or drink water all day and take off an hour and a half early every day and still have the same amount of money on payday. Isn’t that what it basically boils down to? We trade time for money. But what if we started living without some or all of the “necessities” we’ve come to “need”? Could we take off early on Friday? Could we take a longer vacation every year? Well, let’s do a little math and figure out what these “essentials” really cost us.
The first thing we need to figure out is how much we make per hour. I’m just going to use $20 an hour, because it’s roughly the median household wage after taxes, and it’s easier to use nice round numbers. We’ll say we all work exactly 40 hours a week and get two weeks of vacation every year. Now that we’ve got that established, I’m just going to start throwing some common items and services out there.
The first thing that comes to mind is our cell phones. These have become “necessities” lately, but you know there was a time when we “just couldn’t be reached.” Do we need the latest iPhone that costs, what, $400? Wouldn’t you rather have half a week off? Or leave 30 minutes early on Friday for 40 weeks? You still have a cell phone, just not an iPhone. If you ditch your cell phone altogether, you could save approximately $60 a month, or 3 hours. That means one Friday every month, you get to leave work at 2:00 instead of 5:00, and your financial situation is unchanged. Or, for those that prefer consistency, approximately 45 minutes every week. If you like lump sums, by not buying an iPhone and not having a $60 plan every month, you could take off 7 entire days this year. What?! I can just sit around my house and do nothing for 7 work days this year, just by giving up my cell phone? And - Bonus - I don't have to drive down the road telling my mom how to turn on the DVD player for the umpteenth time. Sold.
This brings me to probably the touchiest subject, our cars. Where to start. Do we really need an SUV that seats 8 adults, when there’s usually only one or two people in the vehicle at a time? “We go on trips…” “What if our friends want to ride out to…” “What if we move?” I know, I’ve said them all myself to justify my Tahoe. But, honestly, the best financial decision I ever made was to get rid of it. Now, I bring home a company truck for my daily commute, and my wife and I share a used Prius as our family car. I realize most people don’t have access to a company car, so I’ll work this out as if you traded your SUV for a used economy car. Just the thought of doing that will make most SUV owners cringe, but bear with me. Let’s say your SUV payment is $500 a month and insurance is $100. If you get 14 MPG, and you drive 12,000 miles a year, and if gas is $2.50 per gallon, you spend $2150 per year on fuel. So, you are spending $9350 a year to drive an SUV. That’s not counting oil changes, washes, tires, belts, filters or any other maintenance. That equates to 58 working days per year! Alright, I know you can’t get to work without a car, so let’s say you buy a used economy car for $200 a month, say your insurance is only $80 now, and it gets 30MPG, you would save roughly $5000 a year. This calculates out to a real savings of 250 hours, or 31 days. Take a month off. Oh yeah, and since you’re not driving to work for a whole month, your gas expenses are reduced even further, saving you even more time! Tires, washes, oil changes, all that stuff...cheaper.
So, let’s see. So far, we’re taking off a grand total of 48 work days this year (including the 10 you already get), just by giving up our cell phone and trading in our SUV. This is getting fun! What’s next?
Cable / Satellite TV. I can hear you groaning all the way over here. I’ll be honest, this is one I’ve struggled with, because I just don’t know if I can live without my cable channels and DVR. I’m in denial. I don’t even know how much my cable bill is every month, because it includes high speed internet, and they just take it out of our bank account, and I refuse to acknowledge it. OK, let’s log on real quick and see what it is. OMG! $110? Just for cable? Well, it is split between me and my wife, so I’ll use $55 for my calculations. Let’s see if I can live without it. If you haven’t tried it, you should give over the air TV a shot. Since they switched to digital, the picture quality is as good as or better than cable or satellite. The drawback being that you only get local channels. Goodbye Dexter, Weeds & Psych. Not so fast, you can now watch some shows on your Playstation or through Netflix without paying for cable; you just have to wait for them to be available. $55 times 12 months is $660, or 33 hours. Damn, that’s 4 days. I’ll at least think about it. If we add that to the 48 we’re already getting, we get 52. Hmmm… 52. One day a week? I’m down to a 4 day work week? EVERY Monday off? Now we’re talking.
Now, let’s get back to those daily expenses Carlos reminded us of in the beginning. Can we take our lunch and save $5 a day? Go back to drinking a cup of coffee or Coke from home instead of a $3-$4 energy drink / coffee at the convenience store? If we can figure out a way to save just $4.39 a day on impulse items, we can add 2 more weeks to our total.
Now, we’ve got every Monday off and a 2 week “paid” vacation. Or, we could take 2 entire months off AND a 3 week vacation. Maybe you would prefer to take off a whole week every month. Or, we could continue to work 40 hours a week and have almost $10,000 leftover to save for early retirement. Hmmm... retire early? How early? Well, if you invest your $10,000 wisely, you’ll be amazed at how fast you’ll reach your goal. But that’s a discussion for another day.
Thanks for reading, as always, feel free to comment or add to the list of things we can do to give ourselves more free time.
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