Royally Frugal household still going strong- A much awaited update

 

Financial independence for us is the amazing thing which allows you to go with the flow of life. We are far from calling ourselves remotely FI but in resent months I have loved the freedom of not fretting about money or other issues around it while we concentrate on maximizing our careers. Last few months have been far too busy on the work front for us to be able to look closely into our investments or sit down and write a post. There are a few unfinished posts in different files scattered around on my system but it is high time we talk.

Last few months have been a real roller coaster for us particularly in terms of added responsibility at work, amazing vacation and us taking more steps towards a better lifestyle. The lifestyle we are aiming at is one which allows us to be forgetful about monitoring our investments. It does not mean we did not save, in fact last three months saw a good chunk of our income being saved as we try to reign in our expenses.


We had started this financial year with a goal to keep our monthly spending within 14k not including rent, home loan EMI or parental support. Below is our total monthly spending since June since we are almost at the end of September I am counting the total till 27th.

June- 19,391/- (includes 2,200 for bike tire replacement and 1,918 for Mr. S’ clothes.)

July- 15,049/- (no out of turn expense except paying ~600 to get 300/- vouchers for a retail brand through loyalty points)

August- 11,893/- (this is way too much for a month where we were vacationing for almost 10 days. Though it does include some gardening supplies)

September- 13,774/- ( We still have four days till the end of the month and I am hoping to keep it around 15k. This includes 499/- for Amazon Prime(affiliate), 255 for a headphone and 625 for a trimmer.)

We also bought a replacement for Mr. S’ phone which died in June using the offers in past one week. Amazon Prime was also a result of that well thought shopping spree. We believe at 499 a year it is a decent deal right now as it allows us to buy smaller products for no shipping and gives access to some content.


While we are on the topic of phone I would like to expand a bit on it. Mr S’ phone gave up charging in June and after sinking in some money into it we shifted to a hand me down from parents. It was over 2.5 years old and we both feel like it went out too early. My current phone was bought for 10k and is around 1.75 years old. With all the new models and technologies flooding the market right now I wonder at what rate people change their phones.  When did you last buy a cell phone and what is your usual update schedule?

Apart from shopping around a bit and repairing other items we also purged a decent amount of stuff from our house. We made some 80/- bucks out of it and my tiny apartment thanks me for it. We also sold our couch to a friend leading to a decent amount of space which gives me a lot of peace.

We have been working on cooking more at home and I have been trying to process some fresh produce for us to consume along the year. I am thankful that cooking makes me as happy as it does otherwise it would suck to cook every day. Past weekend I made some cucumber relish and apple jam which turned out amazing and some nankatai which burned since our oven is apparently hotter than the recipe guy’s. We have thankfully managed to keep our grocery bill in check and have barely had to throw away any food.

We have a lot of family time planned and in next few weeks and we plan to sleep in during Diwali holidays. We are also reigning in on our travels for the remaining months as we almost touched out yearly budget with previous vacations in the year.

In terms of our savings the market saw considerable highs last few months and is running on a downhill slope for past few days. I am hoping it will last long enough for us to capitalize on it with salary coming in soon. However we are still way ahead from where we started last year and I hope the next time I update that ticker on the right I can say we crushed the 10% mark.


That’s a lot of English about us, we would like to hear a lot more about you as well. We have been sloppy in responding but are so happy to read new comments coming in every few days.

Let us know how you have been doing past few months.

How to not bring work home

We work in a job that can get stressful and irritating not because of what is in your job description but due to the people we work with. There is indecision from higher ups, inexperience and incompetence at all levels and then there are people who expect you to hold their hands as they do their jobs. Before we go ahead let me say this, neither one of us is a saint and we are incompetent to take up quite a few tasks which are thrust upon us.

In past 6 months we have barely managed to trickle out a post a month and the reason is sheer exhaustion after work. We work 5.5 days a week and around 9 hours make it a full working day. Do we enjoy what we do? Yes quite a few parts of it are really enjoyable and rewarding as you can measure personal and professional growth clearly and it is in a public realm. There are quite a few parts of it which are simply disturbing in all senses.

Past few months we have been managing a team while it was not our place to do so and in our field being young is seldom an advantage. With huge egos and general belief that young ones don’t have any experience it becomes a task to handle ‘big people’ and meet timelines.

This is more our fault than others around us. There is a reason job description and titles are created in a workplace. The reason is so that people don’t interfere in other’s work and that they are not bogged down by unreasonable requests. Fields which require immense collaboration result in overlapping roles and expectations of you filling in for others or guiding them how to do their jobs. That however is the role of their manager and not yours, unless you are their manager. We have often times failed to understand and limit ourselves to our role and we have seen both benefits and drawbacks of doing this.

We have been appreciated multiple times but there have been many who have taken offence at someone exposing where they lack. Have you seen that Hidden figures scene where Katherine answers in a meeting what her boss is fumbling papers for. That is never fun for the boss unless she takes pride in being supported by good people.

Educating each other is a part of any job and allows any organisation to run seamlessly and for employees to actually take time off. However when your colleagues start relying on you for every single task you have managed to put yourself in a corner. Each one of us has struggled with getting work done especially if it involves working with another team.


What we learnt

Last few weeks have however taught us multiple lessons which have not just helped us increase our productivity but also reduce our stress and workload.

  1. It is just work. Before you started working similar work was being done however inefficiently it might have been. As long as you are not the cog blocking the machine you should not be worried about job not being done. Do your part and let others catch up. Even if they don’t improve you can be assured that the end result will be achieved. It might not look exactly like what you wanted but there will something at the end.
  2. Personal responsibility is better than collective responsibility. Do your job first before you start helping people with their. If you job is to manage others do that before you tell a junior how to insert that image in the presentation. Focusing on your own work and actually finishing it will allow you to accomplish more in the same amount of time and go back home a bit lighter.
  3. It is not always good to help people. Let it be clear if you don’t help people around you at all you are a bad person. But if you help them so much that they can’t do anything without your help you have created a monster for yourself.
  4. You have to learn to turn off your job mind. There are people who rely on their jobs to define them. Let’s be fair most of them don’t really worry about early retirement. It is not the worst quality but seriously a job is one of the most likely things to go away without any notice. It is therefore stupid to carry stress from a fleeting thing into your private life. That being said we have been some of the top notch stupid people in that regard and we accept it. Does it require a kid at home to force you to think about more than your job or is a hobby enough or should you start a blog? Who knows, as long as you get out of your job both physically and mentally.

We have been working on ourselves and learning how to distance ourselves from our work and actually enjoy the time we have on our hands. LivingaFi’s blog is probably one of the best boosts you will need to realize you are not alone and there is light at the end of the tunnel.

Is there any work related story that you would like to share? Or maybe what drives you to FIRE?

Reality Check- We bought a lot of stuff

This was perhaps the best thing that could have happened to us- a reality check. This post had started completely different. We felt that we did really good last year especially with our clothing and heeling purchases. Guess what that didn’t happen.

The Past

When we started working I was very much interested in getting myself a shoe collection to rival Carrie and a decent set of clothes to go along with my clothes. I did manage to deck out way better than I do today. Washing clothes was a big chore without a washing machine so before I outsourced the chore I would rather buy a few pairs than wash stuff. I had left home with a suitcase and the day and the day I shifted to our first married homes I had a huge taxi full of stuff. This was after I had thrown away quite a bit of stuff.

Once we moved to Hyderabad being married caught up to us and as we started to travel more buying clothes seemed like less of a priority. This does not mean we never bought clothes, far from it. This was around the time when online market places has risen their cheap heads and we enjoyed shopping form our bed quite a bit.

Past year

However both of us were under the impression that last year we had been good kids who did not waste a lot of cash on clothing various parts of our body. Oh how wrong we were. Once we sat down to count clothes and shoes bought we came to following total

Mr. S

2 Tshirts

1 Trouser

1 pair of shoes

1 piece of ethnic wear

Total- 4 items

Mrs S

3 Tops

2 Jeans

2 pieces of ethnic wear

1 pair of shoes

Total – 8 items

It might not sound that bad with just 12 items bought under various heads, but it is way more than I was under the impression we bought last year.

The Bottoms Problem

The worst part is both the jeans I bought just didn’t work and gave up due to my perfect (absent) thigh gap and I am in the market form some new ones. The pairs of shoes we bought are working great for both of us especially in rains. The pouring ruined my comfy leather shoes before we invested in crocs. The ethnic wear was for a close friend’s wedding and since we don’t wear or use them often older ones didn’t fit or were missing a component or two.

You know what I did above? This is something we have both been doing a lot lately and most of us can easily be accused of. I am making excuses. A lot of above are real facts and situation which needed some expense at that time but not all of them.

Fighting my own excuses

When the jeans gave away around December I was left in a lurch with just one pair of trousers to go with everything I wear to office. Around this time we were on a drive to save maximum amount we could and we were both feeling we can do better. I did not run out to buy another pair right away. Instead thanks to some health related changes and some weird coincidence I has lost a good amount of weight which meant a few older clothes started fitting again. As I write this I am wearing a top I bought way back in 2012 and hadn’t worn in last at least 2 years.

I also started to wear whatever kurta pajama fit me, to office. These usually require ironing two things instead of one in the morning and there are no pockets,so I hardly wear these.

But this time I was not making excuses and had decided to postpone any purchases off to next FY (our office subsidizes office wear for a certain amount each FY).

Future Plans

I now plan to go through my closet once more, purge things which have un-mendable holes or stains and things which I can’t fit into. Next step is to mend things which can be mended and then decide if I am really running low on clothes.

In last few weeks I was gifted a considerable sum as gift cards for a big chain. I can use it to buy clothes for free or I can buy stuff I think I need for my house (which is probably just want) or I can give it to someone as a gift or exchange it for cash with someone who is going to shop there anyway. To be true I was not considering any of these options a week back. Till then we were martyrs who hadn’t bought anything in one full year.

This does not mean that there are no clothing purchases in near future especially if I keep on losing the huge amount of excess weight I have on me right now.

This is not just about our clothes. This feeling of martyrdom and complacency extend to more areas of our life like eating out and cooking. I have been feeling like shit and the job has suddenly become quite tiring of late. We work half days on Saturdays which means only one day to sleep in. this means none of us is really in the cooking mood especially for something to carry to lunch. We have spent a small fortune on eating out in past few months.

I am someone who strongly believes in not killing oneself for every tiny penny and some days did drain us so much that we could barely eat takeout before we crashed. This is not true for a lot of days though, days when we have been busy watching something online or playing one game or another.

It extends beyond clothes

Eating out is one of the biggest drains on our income and has definitely affected our savings rate. We both love food and it is really difficult to not feel like you deserve a relaxed evening when you have been working your ass off for over 10 hours. It is also equally stupid to define every indulgence as I deserve it because I did that.

If we look deeper I am sure we can find other things where excuses have crept up on us. Thankfully we are not making excuses like ‘… it is expected of us to do …’. To be fair we have succumbed to multiple such lines from our parents which drive us nuts. Thankfully we are not making these excuses to ourselves.

It is such a weird thing, life catches up to you and you miss a step without realizing what has happened. Last night was another such realization. I haven’t been at the top of my health lately and it has become a constant source of stress for me. Last night however I had to cook and finish off the perishable food we have in the fridge before we leave for a vacation. Suddenly it did not feel as difficult as it had been previous weeks, once I started.

Have you ever been under a strong belief about yourself or your belongings and have been proven wrong?

Why we chose to pay more to live close to work

In most of the big cities around the globe people live around 20-30 Km away from where they work. There are many reasons for this decision but one of the most important one is rents are higher closer to work than 20Km away. When we shifted to the new expensive city we also had to make the same decision.

We considered our options at length and came to a few conclusions:

None of us wanted to spend over 3 hours every day in traffic burning our money. We value our time and both of us get cranky when we have to spend extended hours in sun and rain doing nothing more than getting from one point to another. In a city known for its traffic jams you would have to really love sitting in a car to be able to justify 3 hours a day.

We wanted the flexibility of leaving work early to get something done at the house or not taking entire day off because something had to be fixed. In past one year since we have moved we have had multiple handymen come in at odd times, a lot of things delivered and for most of the things it has been possible for one of us to take a quick ride to home and take care of things. This is also quite handy when family is visiting.

We don’t own a car and moving 20KM+ away would require us to trade our trusty motorbike for a car. This would mean a lot more money than we would like to dish out on commute. This regular expense would be in addition to shelling out monies to get a four wheeler.

Meeting future needs. Currently there are just two of us but if we do extend our family we would need to be able to run the triangle of home work and day care. Increasing the distance simply did not make any sense. To be fair we have not raised a kid before but none of us were interested in keeping the child on road for long traffic logged hours.

Above are some of the reasons we decided to live within 10 minutes driving distance from our house. That being said we have spent over 20 minutes covering the 2.5km ride because of traffic, congestion, broken vehicle rains or marches. Now imagine how much would these factors affect longer commutes where your time increases at every single red light you have to stop at.


But there are some other factors which might have affected our decision

Even though we can easily afford our current rent, which is over 10K higher than the cheaper suburbs, it does make us question our renting choice multiple times. For many however 10K might be the difference between taking up the job or not. Commuting longer to ensure that you can actually work is a great option provided you cannot find a new job closer to where you live and you cannot find an alternate living arrangement like hostels or paying guest/roommate setting.

We are also blessed to be a dual income household (which does affect our affordability) where both partners work around the same location. This has allowed us to share commute costs as well as ensures none of us have to face longer commute. Most people work at different location than their spouse. So it might be a conscious choice to live closer to one of the spouse’s work in case the spouse is responsible for household errands, managing kids or has any other constraint where being closer to the house is better for them.

We value our time a lot but we also value our living conditions. We are usually not interested in swanky apartments (unless someone else is paying for it), but we need decent clean surroundings and good construction. Our definition of that though might be very different from someone say with kids for whom a park nearby is a requirement. Same people or those taking care of elderly parents might feel a safer environment to be a gated township/society. We are sure we will require these at some point of time, today however we are perfectly content with where we live.

We have parents and guests who live with us every once in a while. We are happy however renting a 1bhk instead of a more common choice of 2bhk or 3bhk to provide for visiting family. We are happy to let our parents use our bedroom and lay a mattress in living for a few weeks in a year that they are here. There are many who rent bigger simply because they need to have space for people to come and visit. If that is a need you would probably be better moving out to suburbs so that you can afford a bigger dwelling.
A few of above factors are the reason why we rent far cheaper than a lot of our colleagues living within the similar distance from office. Others who live over 30Km away spend hours travelling back and forth though a few of them do get the benefit of office provided transport.


Two of the houses we liked last year were 1 bhk and 2bhk for 23K and 30k respectively. Though we deeply debated the pros and cons with the later coming ahead on locality and building services our current location won in terms of price, proximity to office and being the amount of house we could maintain.

Currently our housing expenses make for over 50% of our household budget and we intend to increase the number by reducing our monthly expenses. With current 10% increase in rent we would have spent almost 4 years in the house before the rent would catch up to the other house’s starting rent.

What have been the factors you considered before you decided how far from work you live?
For those who own their house this might have a lot more factors but I am sure we all have theory of what is the best option.

Update 2016: How did Royally Frugal household do?

Why are Updates necessary? You ask. When we work towards a long term goal it can be very easy to get distracted. Are you looking at retiring in 10 years by saving aggressively? You are lucky if you can retain the gusto every month and every day. This is what makes it important to set smaller goals and keep reminding ourselves that there are smaller and seemingly needless decisions which will make that goal possible.
In our line of work it is very important that a concept be agreed upon and a vision for the finished product be clearly understood. However the stages of development are equally as important. Every small decision made and detail worked out will result in the final reality you want.
As this year closes we have seen a huge change in how we operate both as a family and as individuals. Our understanding of what our future could look like has improved while our capacity to take a messy house has reduced. When we started on the financial independence ‘journey’ early this year, it was to serve a completely different purpose. Also we were making some 50% less than what we make today. A year before that we were spending 50% more every month on our daily expenses every month.
Let’s talk a bit more about what happened in past year 10 months to be exact.

Income

We started 2016 thinking that we were a few bad expenses away from eating into our meager savings. The reason, in February we had to move to a new and very expensive city for our jobs . In this city a tiny flat rents 3X more than what we were dishing out for a two bedroom apartment, back in the old city.
Even if we could swallow a 300% hike in our rent even day to day necessities cost far-far more especially eating out. This meant we had to find a way to increase our income. Our first step was to ask our current company for some more money as relocation compensation. We did get some but that was definitely not enough to save a huge chunk.

Though this cash crunch was the reason we started on our frugal journey we kept on looking for a job and Mr.S found one overseas where he could make the more than what we were making here together. That was the first time we realized how easy putting in the papers can be and how most companies try to retain you.

We ended up staying with quite a considerable bump in the take home monies. December gave us another bump with the regular raise cycle of the organisation. So we can happily report we are earning quite a bit more than we were doing last year same time.

Another income stream opened up for us with rent from our property we have been paying EMIs for last few years. The flat was empty for a year before our agent found a tenant. We put in some of our own money to furnish the flat once we had a tenant and have been using the rent to make up for it till December.
In 2017 that money will go to equate our home loan once again.


Expenses

We started tracking our expenses around March and are finally able to come to an expense trend which spans for a considerable part of the year. Past year had quite a few ups and down and we realized our expense tracking method is probably not the best one.
We managed to reign in our expenses except for last 4 months of the year. Even with these high expenditure months we overall spent far less than what we were doing in the previous city. Below is the total spent under various heads.
Rent: 2,30,000
Household expenses: 2,14,969
Parental Support: 2,10,000
EMI paid (includes interest payment): 2,51,000
Gifts and other expenses: 20,000 (we did not track this but I am assuming a high sum)
Total Expenses tracked: 9,05,969
Total expenses: 9,25,969

This is an average expense of around 90K every month which is a huge sum for sure and it hasn’t been long since we started seeing this amount in our accounts. Every time I see how much we are spending I am shocked. However once I look into the various heads it starts making better sense.
Rent: Our rent is a lot and it has gone higher as the lease period ended. We did consider shifting but this high rent is still the lowest in the area we live unless we shift over 30-40Km from office and resign ourselves to 4 hours of daily commute. The only solace I have is that this is still less than the other houses we saw a year ago, new construction and ample space for the two of us.
Household expenses: We are trying to get our expenses down to 10K a month and Frugalwoods’s UFM challenge has been a good starting point for us. The expenses you see includes our one time setup costs like bed and mattress, a cabinet and a few other knick knacks required to get the kitchen more efficient.
This year we resolved to not buy replacements till we could repair the appliance. We can say for sure that it saved us over 5K in food processor after we got the jars repaired instead of creating more trash. (How do people in India trash their appliances? I have not had to do it even once; do you sell it off to the kabadi waala or repair shops?)
EMI: we have talked about our home loan earlier and how we decided to use part of the equated money to put into our investments. Around 80% of our EMI went into principle and with the rent now coming in from the property we plan on equating the balance again by the end of the year. This equated amount is the emergency fund we have for anything form a sudden medical emergency or a great opportunity.
This March will complete four years of our loan term and we are happy to report that we should finish our loan way before the full 10 year tenure and should not be paying any interest as we start equating the loan principle with the rent.
Gifts and other expenses:
This is something none of us are happy about not because we spent it, because we did not track it. We are sure what I have assumed here is too much but there is no way to confirm how much we actually spent. This category includes gifts we bought for our family, clothes shoes and other personal items. This year onward we will keep a better track of it all and hopefully this year we will have a single head with every expenditure tracked.


As I said in the start it is easy to lose sight of your goals; we are clearly defining our goals for the coming year which should be coming out sometime soon.
If I had to be true I am a bit disappointed in us. We have not been able to rein in our spending for past 4 months. We definitely have a very real reason for most of the over budget amount but that still means we have not achieved the well-oiled machine we hope to run. This year we are working harder to make more efficient budget a norm for us.
That being said there are still times when we look at our spending habits and are surprised at how far we have managed to come within a year.
Did you manage to save and invest better past year?

The Way November Went

November was almost near October in terms of spending but a lot better in terms of comfort. The memory foam mattress we spent on in October is finally rewarding us with great sleep. Overall it was one expensive month, with a lot of changes both in how we look at things and actual changes which will affect our lives in the long term.

We spent around 27000/- this month apart from rent and mortgage. We also managed to put in a decent sum into our investments as we talked about in our previous post. This was probably the first time since we started on this quest that we timed the market.

This month’s high expenditure was in line with visiting family and being a 4 member household for a major part of the month. A lot of taxis were taken, restaurants were visited and gifts were exchanged. However we believe this is something which will happen at least once a year and will allow us to narrow down our actual annual expenses.

We cut on other expenses so that we can spend on things which matter to us like family. But to say that there were no frivolous expenses would be a lie. We could have cut corners or simply bought cheaper stuff. In most cases that would have resulted in a lengthy conversation which neither of us wanted to be a part of. After you are married for over half a decade you realize there are certain things you can simply not get through to your family. Picking your battles is the way to go!

November also marked a milestone for us and we surpassed 5% of the amount we believe we would require to retire. To be clear this is only in our actual investment not including our home equity or gains on our investments. It has been almost 6 months since we started our first investment in June and both of us believe we are on track. However we are looking at reducing our expenses even further. We plan to be a part of the Uber Frugal Month challenge started by Frugalwoods on their site and our aim is to keep out budget under 10K. However anything below our current estimate of 16K is a blessing.


Though we have been able to keep our actual household expenses with in the budget there is a clear upwards trend and in last three months. This has been a result of mandatory spending (passport renewals and health checkups) and increased household size, but we are not completely off the hook.

One of the major expenses which we could simply not justify was a midnight buffet at an inflated cost with a friend. The food was good but none of us walked out satisfied. It contributed to 6% of our monthly expense and was something which we wold want to avoid in future. Our solution is to host a few dinner parties which will cost us far-far less and we won’t have to wait till 12 in the night to get fed.


We have realized that we are spending far too much on food than required. We established this by not buying any vegetables except for coriander (technically it’s an herb) and green onions in last two weeks apart from staple trio. We have not gone hungry either; instead we have been using what we have already bought. For us one batch usually works for 2-3 meals for each one of us.

One of the things which have helped us achieve this is meal planning and prepping over the weekend. Most Indian curries reheat very well. We cook a bigger batch and pack in separate containers so that when we leave for office lunch involves picking up a box. The week we have all the food ready, cuts down our lunch costs by at least 25%. Since we still buy rotis from our lunch lady we still spend that much. Not only the cost since we know what we cook with and how we are in better control of what we eat. If you are looking at packing your own lunch then this is definitely a way to go about it. If you are ok with rice as your starch in lunch then you are in even more luck. Its way too easy to prep rice for the week, just pop it in fridge or freezer and then reheat or thaw using your office microwave.


For December we are looking to rationalize our expenses and become more efficient in our day to day jobs. We are travelling again for a week in December and are planning to throw a house party for our team on New Year ’s Eve. We believe it will be quite cost effective instead of going out as well as allow us to celebrate in safety of our house. More than that, I love cooking and none of us are averse to entertaining. This party will serve as a dry run for a few other dinner parties we would like to host instead of going out to eat ourselves.

No post about this November can ever be complete without a brief on how we coped with demonetisation. We actually fared quite well. We usually transact electronically and our credit card is our trusty companion (paid full every month). We did however stand in queues but were able to withdraw enough to provide cash for family and ourselves. But the biggest surprise was reduced crowds in the malls on weekends. We had in past spent 20 minutes in the checking out queue to get groceries but this time it was a breeze.

Our investments have fluctuated through the month as markets dipped up and down. Right now for us it is a game on waiting and watching as our money works for us. That is definitely the benefit of a long term plan.

How did your investments fare in the uncertain times of these past few weeks

Update-How have we been?

It’s a time for update. Diwali was just a few days ago and the few days of holidays we had have again reinforced our desire to retire and that too as early as we can. October was probably the busiest month in terms on our jobs and we have barely had time to think about anything except meeting the deadline. This has resulted in silence on this blog and a lot of delayed decisions personally. But that was not the only thing that happened this month; we also managed to finally fly off to a week long vacation. How we fund our recurrent trips is something we will discuss in another post, hopefully soon.

September ended on a high note for us as we prepared for our vacation and managed to keep our expenses within reason. None of us forgot about the blog but as life goes we were pulled into some highly demanding (though rewarding) work and deadlines (definitely demanding). In fact I have a lot of updates written and a few posts I need to sit down and work on.

When you are not dependent on your blog for money you can afford to let life run its course. Especially if you have an audience which realizes that people looking for FI are probably not interested in being bound to their blog. Thanks to all of you who believed us lazy souls will be back soon.

As October rolled in we were packing our bags and the excitement was high with this vacation coming at the heels of a lot of change and upheaval in our lives. Before we move to the FI bit let me say- if you have a chance to spend some time in Indonesia take it. It was perhaps one of the most comfortable trips we have taken in last few years.

November is almost halfway across as well and it has been a fun ride though a bit different from our usual months. We have house guests for a better period of the month so the expenditure is proportionate to a 4 people household than just the 2 of us.

Now back to the FI stuff- a lot has changed.

The month that was

October started with a vacation but for most people this is not really a productive month especially in India. The off days started with Dusshera and were sprinkled throughout till Diwali. It definitely did not hurt that most holidays allowed us to think of a long weekend. Usually Diwali is an expensive occasion but being the frugal people we are we rarely spend big bucks on anything. Diwali also comes with a lot of offers and discounts both online and in stores.

This allowed us to buy some essential items for our house like a bed and a good mattress. We had been researching for months and finally decided buying second hand wasn’t going to get us any major profit. Also none of us were comfortable about a second hand mattress because not many people here use mattress protector. And before this one neither did we. We also invested in a book shelf during past few months which is the only storage in our living room. For Diwali we bought following

Pack of 6 scented candles – 299

Pack of small wax diya(lamps)- 69

6 earthen diya(lamps)- 20

Pooja samagri- 100 (this is an approximation)

250 gm laddu- 50

Most of these are quite reusable and we ended up using just one of the scented candles. Still if I include all of this we spent a grand total of 538/- for the festival. It definitely saved us quite a bit more on the bed and mattress only. As people above 30 we believe we have had our share of fireworks and neither one of us was interested in lighting any so we didn’t buy them. What I am not including in this total is the cost of fruits since we buy fruit anyways as against sweets which none of us enjoys much.

Our office gifted us with gift cards and a small pack of sweets which we were more than happy to eat and share. These gift cards will help us buy some things we need.

Why are we buying things?

It might sound a bit weird that the person, who claims that freedom of not buying is awesome, is talking about buying things. Well there are multiple aspects to this.

We have purged probably a quarter of our belongings in terms of clothes, utensils and stuff which we no longer use. This started with family as we gave them and option to pick first then to a few colleagues and finally we handed a big box full of stuff to the staff at our building. They were free to take it for themselves or sell it off. This might seem stupid to some but none of these were things we could have sold ourselves or our friends and family were interested in. This made sure that we essentially emptied out one of the corners of our living room.

We never really bought stuff except for essentials like a bed and mattress (we sold our old bed when we had to move a few years back- earned money and saved transportation costs.) and a working kitchen. We were gifted the said bed by my family as a wedding gift and the lone couch we own was a gift from a friend. We did spend on buying a new to us four seater dining table and two recliners which everyone loves. We are looking to sell the couch to free up more space and also to reduce the stuff we own.

You’d remember our drive to eat better which we started a few months back. A major part of the drive is slowly phasing out our utensils both cooking and eating to healthier options. Non sticks and aluminium are moving out and being replaced by steel and cast iron. Both the replacements are quite expensive so we are using up any free money we have spare to get us some better stuff.

All of that being said we are quite conscious of the small apartment we call home as well as our preference for relatively empty and open spaces instead of those filled with things.

Big changes same investment

Apart from the changes that we are making or striving for there were two major changes which affected our investments one was the US election and the other was discontinuation of currency. Both these allowed us to buy on quite cheap prices on 9th November. Though the markets have recovered since then we are happy we bought in to the volatility.

Some would call it timing the market, well you would be correct but does it make sense to not buy at really low prices simply to be able to say I have never timed the market? Of course it doesn’t.

We also forayed into dividend stocks this quarter and we are slowly building our stock while investing in index funds alongside. In a market like India where volatility is quite high we concluded it was a good move to try alternates and create a kitty which we can leverage as required once we retire.

Our current portfolio follows the principles laid out here and we believe we will be able to tell you how this decision fared out by next financial year.

Apart from introducing dividend stocks we are continuing with our previous philosophy of investing every single penny we can since we do not need to have additional emergency fund. We are working hard to maximize our PPF accounts and anything over and above that goes into our index funds and dividend stocks.

If you are wondering why we are so intent on PPF that is because a guaranteed rate of 8% return compounded annually is way better than what the best of us can claim consistently from the market. Apart from that any returns are tax free which makes it a great instrument for fixed income.

As an experiment I have stopped tracking detailed expenses every day. We are still keeping tabs on how much we spend every day. It has been going on pretty fine and we have not spent a whole ton on things we don’t need but I miss being able to exactly tell how much we spent on groceries and how much on eating out.

Looking at things differently

As you might have realized we have made a lot of changes around here and a few big ones came from outside our circle of control. We have been looking at a lot of aspects of our lives differently and a big part of that is to make us more efficient. These changes are in various stages and we have been waiting for these results to show up consistently before we share them with you.

This blog is our way of sharing our frugal investment and retirement journey with you. We would love to hear if there is anything in particular that you would like to read about.

Royally Frugal Life: What it means for us?

What exactly is a royally frugal life? If you have ever had this question, prepare to be answered today.

When we were wondering what to call the blog this name stood out and called to us because it is exactly the kind of life we have and want. We are not Royals. Yes a lot of people in our country can actually boast of royal blood we are not one of them. We are not rich either, when both of us started working we were provided with one month’s of assistance from our parents and then were supposed to feed ourselves.

I have talked extensively about how we started off and how our spending mentality gave way to saving mentality. Not only was this a big change in how we view money but also our life.

Royally Frugal Life: What we want and love

We love food and our travels around have made us not only aware of various cuisines but have also led us to crave them. A big part of our spending was devoted to eating out. This definitely did not result in empty pantry at home. No sir, we were still buying ingredients and also cooking though far less than we should have. All we have to show for these food indulgences is bigger waistline (for me at least) and a smaller bank balance. Before we moved to the expensive city our food indulgences were both satisfying as well as not as heavy on the pocket. With expensive city the taste has gone down while price tag has gone up. Thankfully we learned how to eat organic food at a much smaller cost to our pockets.

Another one of our major expense is travel and it would not be wrong to say we are addicted to it. A long spell without travel (visiting family doesn’t count) leaves us suffering from various withdrawal symptoms like yearning, lack of focus and hating our job and finances. Thankfully very early in our travel escapades we discovered that luxury travel is simply not for us, our pocket or our taste buds. Don’t get me wrong we love a five star stay any day of the year but there is definitely something to be said about roaming the streets, eating street food and socializing in a nice hostel.

Like majority of people we love to live in a clean, dry and nice house with enough space for us to walk around without bumping into things and small enough to clean by ourselves. Being comfortable with a comfy couch and a good mattress with little maintenance is far more important than the latest style of furniture. We love to live with our things for as long as possible, changing furnishings every three years is definitely not for us. That being said we love new things as much as any other thing, the element of surprise and a new feel is awesome. But I also love owning and using dependable things or repairing my appliances so that they last me a long time.

That is it for us as long as we have a nice clean place to live in eat the kind of food that we like and get to travel the world we would be happy.

Royally Frugal Life: What we don’t care about

We do not dream of owning an expensive car and burn fuel as we speed along on the highway.  No good sir, we are far happier being the lazy people we are and let someone drive us to the destination in public transport. We save fuel, environment and our energy required for driving and navigating. Does that mean road trips are not our style? Nope. We love them but we equally love sleeping the night away in one of the sleeper trains of India as they take us hundreds of miles away. Maybe when we have the luxury of time to slowly travel we would love to ride or drive our way around the vast expanse of our beautiful country. Guess what we need for that to be a reality- yup, financial independence and retirement so that we have time we need to bring our dreams to fruition.

A lot of people would see us with relatively sparse household (I am trying to get rid of few more things) riding around on a 5 year old motorbike and taking non ac sleeper trains around and assume we don’t know how to live our life. Then these people would wonder how we take so many trips and if we earn that much where is our big car. Sometimes the lack of correlation is simply mind boggling.

This is what our royally frugal rich life looks like to us- simple yet fulfilling and with less things in our life to worry about.

I have written extensively about how not owning a lot has helped us claim back both space as well as peace of mind. Remember stuff is not always physical a lot of us carry around excessive mental baggage as well. Maybe unloading the overload will help us all.

In past three months that we have outlined what we want to achieve as well as what our future goals are we have started working our way to living our version of a royally frugal lifestyle. It may not be a cheap thing to start with especially if like us you believe in bulk buying or if your appliances decide to give up on you together.

What I can say with experience is it will get better. Once you get the hang of cooking for yourself instead of spending money eating out you will actually grow to love the taste of your food better. Once you get the knack of finding deals and looking for the cheapest and effective way to meet your requirements you will never want to spend unnecessary money.

We value efficiency and not owning a lot of things as well as devising our own procedures for tasks have helped us achieve a better work life balance not just with our jobs but also with our chores. I hope to have the same lifestyle we have now with limited work and all the time in the world to travel and pursue all of our other desires and hobbies.

Royally Frugal Life: What kind of future we want?

Does our future royally frugal life include full time travel? Maybe. But there is an equally big chance that we do nothing else except sit on our ass and go through life in peace.  For us the freedom to choose what we want to do every day is what a life like royalty means. We have the additional benefit of not having to keep up any appearances which most royalties suffer from. We have thought about this in detail and have not been able to find a way to achieve the luxury of time apart from following frugal ways.

What is your definition of Rich life? Does it include expensive cars or the freedom of travelling the world or maybe the freedom of seeing your child grow up? There is no right answer and we would love to hear from you.

Becoming a Landlord- Lesson Learnt

August for all means and purposes was a good month and if September could take a cue from that it would be nice. You can read our monthly update here. In August we found a tenant and became landlords ourselves.

Renting without an agent

We are the kind of people who forgo services of agents and other service providers for renting. We do this for two reasons. Firstly, it saves us some money (quite considerable in some cases) and secondly it is easier for us to do it ourselves than coordinate with others.

When we had to look for an apartment after our move to the expensive city we took it upon ourselves. We were told by many including both the renters and landlords that hiring an agent was required. We persevered and landed an apartment which costs us at least 10% less than what we had been told apartment like ours run for. Add to that paying the broker additional 1 month rent and we did land a sweet-sweet deal. The difference is enough to make up for another year’s rent hike which if not negotiated would be around 10%.

Most of the landlords who are looking for self-servicing and industrious tenants also avoid agents. This was the same case last year when we had to shift bases in the old city to be closer to office and reduce our rent. We found a cozy two bedroom place which was 10 minutes from office parking and never had any issues. We are also the kind of tenants who believe in being fair to our landlords. If it is a small repair like replacing a tap, we’ll do it ourselves. However if it is a permanent fixing which we will not be able to take away with us- the landlord pays.

Why we used an agent this time

Even after knowing and first hand experiencing the benefits of not using an agent we had to use one to find a tenant ourselves. We have a few reasons behind the decision:

  1. Our property is in another state so travelling there to vet the tenant, draw rent agreement etc. are not just bothersome and inconvenient they also cost a decent sum.
  2. The agent we found charges quite reasonable rates which are far less than what we would have spent on a trip. These charges cover for leg work of showing the house to multiple tenants, tenant background check and drawing up rent agreement to name a few.
  3. Most important reason was that the house had been empty for almost one year. Once we concluded we would not be able to find a tenant ourselves we resorted to looking for an agent/property manager to help us out.

How it went

Months after contacting the agent we were told that they finally have a tenant who is pretty interested but believes the rent is too high. We did come to a mutual agreement on a certain price and let it out. The reason we came down on our previously decided rate were two

  1. Empty property was simply eating up maintenance costs which the tenant will take off from our hands and is over and above the rent. Even though we do have a good home loan it still means some interest which will be completely taken off our hands.
  2. We would finally start an additional income stream which would help us add more to our savings.

From what our agent and tenant tells us the going rent for a furnished flat with decked out kitchen, wardrobes and other woodwork is a bit lower than what we are currently charging. After we got the possession we had thought in depth about the way we can furnish the said flat. The cheapest option came out to be buying furniture online and avoiding the hassle of a carpenter. The itch to deck the flat was real and we had to hold ourselves back from spending more money on the flat.

Our reasoning was simple; once we have a tenant lined up we can buy the furniture and get it delivered which is what we did. The couple we are renting to were in a hurry to take up the house which meant they were there when a lot of fittings were done. The furniture required will be delivered to them so our need to have a property manager went away

We have been tenants almost all our working lives and the one time we could have avoided that we moved for our job. Mr. S has rented most of his life and I have seen my family managing tenants. This means we know what real pain points are for a tenants and how much they would be ready to wait for; or so we thought.

We were not ready for the continuous communication which will be required with a 32 year old man who is unable to find a handyman we were paying for. More than that inability to coordinate with them once we find a person from 600Km baffled us. This was very different from our approach of talking to the landlord, getting stuff done and then adjusting in the rent.

Lessons learnt:

The entire year from getting the keys to our flat to finding a tenant has taught us quite a few things.

  1. It is difficult to manage a property from distance esp. another city. We believe if we had been in the same city we would have been either living in the flat or at least been able to spread the word around better and would probably not have had to pay for the agency. More than that, getting fittings done and making the flat tenant ready would have been an easy task being in the same city.
  2. It is OK to get help and pay for it. When we finally realized we would need an agency to take over the renting process it was a bit late. We would probably have had a tenant earlier if we had understood the enormity of the task sooner.
  3. Not everyone is like us. We almost always assume that every tenant thinks like us and so do all landlords. Turns out we were wrong. People have different priorities just like we want our privacy and sleep more than not having to clean ourselves.
  4. Getting another income stream started is more important than worrying about 500/- every month. This was something which was pretty difficult for me to do- reduce rent. We finally reconciled that not accepting the tenant would result in a far bigger loss especially if you add the society maintenance and electricity we had been paying.

It is definitely a happy ending with some rental income coming in and unloading of the expenses we were incurring simply by owing a flat. Not just that with a new income stream we have the capability of saving more than what we have been doing. It will take us a few months before we recover the expenses made on the flat. Post that it is pure returns on a property.

Real Estate as an Investment?

Real estate is a great option but unfortunately the returns are still not enough to tide two of us over every month. I am not including rent here, just food and other expenses. Apart from this there is the huge cost we have already sunk into the house. We have discussed viability of real estate as a retirement plan quite a few times but don’t really see it as a real option for us. Will we fare better with a few cheaper properties in addition to our desired net worth? For sure and we might be able to live with just the rent and never dip into our investments. Will that push our retirement back? Definitely. That being said we are still looking into all options and there is a possibility we might surprise you with a new property in coming years. The chances of that are low for sure.

What part of your portfolio is in real estate and how much of your retirement income do to you expect from rentals? Do you have some tenant stories you would like to share?

August-Monthly Update: the month of better health

August was a month of some big changes and a lot of realizations. I am confident that the changes we made last month will have their ripple effects on coming months for sure.

We also decided in August to stop publishing our monthly expense reports because they don’t give a clear enough picture since most of the expenses are rolling. Instead we would like to talk more about the financial and other changes during the month. Which is why instead of expense reports it will be monthly updates from now on.

It started like any other month some groceries and a few other expenses. We ended our ban on eating out in last few days of July and in August we were free from and restrictions on it. This was also the month when we hosted a few friends at our place. But the biggest change was how we deal with our health.

The Hosting

We had a few friends from work over for an afternoon and another friend the next day. I love entertaining and cooking so it was a fun day with colleagues, but not so much with the friend. We have realized in past few months that most people are not fit to be houseguests. In fact our friend list needs some pruning and boundaries need to be set. These two days ended up pretty expensive and cost us nearly 10% of our monthly expenses.

The food

We are slowly turning to organic food and we bought a huge haul of organic staples which will last us far longer than the month itself. This ended up being the biggest amount we have spent on food in a long time. In fact it was almost 3 times of what we spent in July.

We started packing our breakfast for office since June-July. This month we started to slowly wean off our paid lunch in office and started carrying part of our lunch. This will help us to keep the cost down as well as eat food we like and be able to control what actually goes into our food.

Fresh vegetables and milk featured largely in our food list this month which not just makes me happy but also healthy. We were never buying too much sugary drinks but this month we simply got rid of them.

The Health

We got our blood tests done in July and the results were not quite good. Both of us were facing vitamin deficiency. We started vitamin regimen in July and in August we reaped the benefits. Biggest one of these benefits was not feeling tired anymore and suddenly we had so much more time in the evening. All of those few precious hours after office were now usable because we were not burnt out anymore. I am sure our body internally liked the vitamins even more but this was the biggest benefit we could have asked for. We were waking up fresher and sleeping better than we had been for past few months.

Mid-august I decided to take up a new challenge and help my body feel even better. I stopped drinking caffeinated drinks, alcohol and anything with added refined sugar. Water became my new staple and office coffee (free!) went out of my daily habits. Dairy and fresh fruit or vegetable juices are allowed as well. This was probably the biggest change I have ever made to my diet in my life. Even though the challenge I started for myself is for 100 day only (23 days over) it has helped me realize how good it can be to kick coffee, tea and sugar from your daily routine.

Does this help us save money? Yes and no. Almost all of my coffee was in and by office and if I don’t consume it any more my employer benefits by a few mugs a day. Apart from that I am no more ordering a glass of some drink (alcoholic of not) when I go out which saves a lot of money. Though we had already reduced our restaurant visits, this will result in saving a few bottles of carbonated drinks we bought in a year.

Apart from this we have been consciously monitoring our food, which means I decide what we eat and he eats it. Supplements and cleansing food are high on our lists especially since we do have a few new conditions to worry about.

Neither one of us have started exercising except we are cleaning our place much more, organizing better, cooking more and overall spending much more time being active in our daily life. Has this helped? Yup, we have cleaner house, better food and happier people.

The finances

We were able to contribute around 45% of our take home to our investments this month after buying fittings and furnishings for our house we rented out last month. This was not a good thing since we got increased salary this month and we should have been able to save quite a bit more.

A considerable part of our income also goes towards our home loan EMI and the principle portion of it is a tad bit over 10% of our income. Including this we come to a bit over 55% and that is something I am still not content with. There is however a limit to the amount we can save after putting in rent and other mandatory expenses.Apart from these there is a mandatory contribution to EPF which is combined for both of us is around 6-7 % of our take home pay.

In reality I believe we can achieve a maximum 60% savings rate. These savings though are still a bit away from us since we have to recoup the amount we put into our flat as well as the bulk purchases for some food and supplements which we have recently made.

The biggest addition to our income this month was adding rental income to our portfolio. It covers the interest portion of our EMI and allows us to save a bit more. The landlord experience for us newbies has been bittersweet which you should be reading about in some time.

September has continued in the same vein as August and I hope we continue to improve our health and savings.

How was August for you and what are you expecting in September?