Saving in the Time of COVID-19

Most of us are reeling from the uncertainty of this time we're in, and considering we are staring down the barrel of a major economic depression, we can all use some new ways to save and stretch money.  Below is just a short list of things I'm doing as a result of working from home, and also some things I always do to save money.  As always, this list is based on my observations and experiences, so please chime in with any other suggestions you have in the comments!

1. If you are working from home and not driving your car, update your car insurance so that you are not paying for any extras.  Note: if you are still making payments on a car loan, you often have to keep a certain level of coverage, so double check this first.  In our case, we own our two 2012 Prius's outright, so I reduced our coverage to the absolute bare minimum.  We had just made our six month payment, and reducing coverage got us almost $300 refunded.  Some companies are automatically giving people some money back, but you can also further reduce, and get even more back.  For instance, I saw that Geico is giving people 15% back, which is great, but I got us 30%, which is better.

2. Reduce food waste as much as possible.  Wasting food = wasted money.  Shop strategically and try not to buy more fresh produce at a time than you know you can eat.  It's very easy to feel virtuous while in the produce section, but if you bring home three kinds of salad greens, and then have a cold, rainy week where you don't want to eat salad at all--it's going to go bad.

• Plan meals in advance, and shop according to the plan.
• Make frozen veg your friend--often frozen vegetables are better for you because they are frozen at peak freshness, whereas fresh produce needs to travel to market and loses nutrients.
• Assess your kitchen for weaknesses.  What do you frequently end up wasting?  How can you focus on the problem areas and eliminate or reduce waste?  For instance, we use milk very infrequently, and used to buy it in half gallons, only to have it keep going bad when the container was half empty.  Now, we buy a half gallon of milk and portion it out into pint jars with lids.  Most of those go into the freezer, and we pull them out and thaw as needed.  This has made is waste less, and also stop making extra trips to the store.
• If you don't like a food, don't buy it. When people are trying to avoid the grocery store, it can be very tempting to stock up on things like rice, pasta, canned vegetables, which seems like a logical choice.  But, if you never eat rice and don't really have a way to incorporate it into your eating repertoire, you can use that shelf space for something that makes more sense for you.  If you don't want to eat canned soup or peanut butter, then don't buy it!

3. Put all your spare cash into a high interest savings account.  The Federal Reserve Bank slashed interest rates a while ago, but there are still some banks where you can get a decent return for savings accounts--more for Money Market accounts.  For instance, we are socking cash into a Capital One Money Market account, which nets us 1.3% interest for balances over $10,000 (about $15/month).  Their regular savings account rate is .5% last I checked.  That's not great, but it's still free money.  I like free money.  If you got the government stimulus check and you don't need it right away, put it into savings and leave it alone.

4. Don't blow a bunch of money on kitchen gadgetry.  Everyone in my fb feed starting baking bread as soon as stay at home orders came out, and I admit that I was mildly tempted to try my hand at bread baking again, but I didn't--for a couple of reasons:

• I've tried bread baking before and I find it frustrating, time-consuming and just not worth the effort.  Sure, I could probably get better with more practice, but once I'm back to commuting to work every day, I'm not going to spend my downtime baking bread.  
• I also don't have any bread pans, and I don't want to buy them on the off chance that this is a hobby that will stick. If there's something you want to do in the kitchen and it requires a bunch of equipment you don't own, maybe take a step back and think about what you can do with what you already have.  Or see if you can borrow what you need from a friend.

5. Try not to panic shop or shop out of boredom.  If you have to, unsave all credit card info from sites that you frequent.

6. Focus on reuseables.  If you have an extreme paper towel habit, try switching to rags and reuseable napkins for most of your needs. If you have on-site laundry and are working from home, this is the perfect time to figure out if this is a solution you can work with.

7. Get a bidet attachment for your toilet.  We got one from amazon a few months ago, and it has been a total game-changer.  For the low price of $25, we have cut our toilet paper use in half, which will more than pay for the bidet in less than a year. Plus, I feel cleaner than I ever have, and my husband installed it in less than an hour.

8. Wear your clothes out.  And by that, I don't mean out of the house, but rather wear them until they are falling apart, then transfer them to the rag bag to be used in place of paper towels for cleanup.  There is something supremely satisfying (to me) to getting every single last use out of an item.  Especially when most of us are at home more than ever, there's no reason to spend money on new clothes.  When I feel tempted to buy new clothes, I first make myself go look at what I already have, and usually realize that I have everything I need already.

Post Government Shutdown Budgeting

Thankfully, I was not personally affected by the recent government shutdown, but like most people, I was avidly following the news stories about the affected workers struggles to pay basic living expenses after missing more than one paycheck.  If nothing else good comes from this, at least its (possibly) created a bit of a dialogue about personal finance and forced people to examine their saving and spending.  At least, that's what it did for me.

I'm a saver, and always have been.  But when I looked at my accounts and tried to calculate how many months we could last if both of us lost our income, it was surprising.  We live in a very expensive city, and have been primarily focused on reducing debt (which is a good thing!) for the past year or so.  What that means, however, is that our rate of savings has slowed a bit, which is alarming.

By my calculations, it should cost us $3000/month to cover our basic costs.  This includes:

1. Rent ($2300)
2. Electricity (~$120)
3. Gas bill (home $50)
4. Food (~$250)
5. Household (things like toilet paper, etc. $50)
6. Phones ($100)
7. Misc-- ($100) Things like home internet, Netflix/Hulu.  This is an area that we could cut if things get desperate, but there's always hidden costs with doing that as well.  For example, we could cut home internet since we're lucky enough to have a great public library less than a mile away that's open 12 hours a day.  But, reinstalling internet comes with additional fees.  Also, if we were aggressively trying to find new jobs, it would be inconvenient to have to camp out at the library all day, though I recognize that plenty of people do that.

Thankfully, both our cars are paid off, and if we weren't driving to work every day, we'd save about $200/month on gas.  Our car insurance bill is due 2/15 though, so that's a $900 expense that's unavoidable and would really pummel our savings.  Probably my first impulse, if we were in a lost income situation, would be to put that on a credit card to try to buy some time.  I imagine that's what a lot of people had to do.

Because we have a chest freezer, and I have a tendency (compulsion?) to stock up on food when it's on sale, we could probably go more than a month buying very minimal groceries. That number in my calculations is our average food budget. In fact, I'm going to do a pantry challenge in February and March to try to eat down some of my stores of food before we go on an extended vacation in April.

Student loan payments are a bit tricky.  I'm on the Public Service Loan Forgiveness plan (assuming it still exists when my time finally comes), which means that I pay a prescribed amount of money every month, and I can't deviate from it.  I could put my loans into forebearance, if I was really hard up, but my interest rates are so high that that would really cost me a lot of extra money and time down the road, so it's not a very appealing option.  My student loan payment is $440/month, which is almost double our monthly food budget.  It seems incredibly backward to be mulling over whether I would pay my student loans or buy food, but that's a real problem facing plenty of people.

Over all, we're certainly in a better position than many, but not a comfortable position by any stretch.  I've been trying to build up our emergency fund, and doing this audit is making me realize that that needs to be more of a priority.

Where to save:

I have several Capital One online bank accounts, and I LOVE them.  Their accounts are fee free, and have the best rates I've found.  The traditional savings account has a 1% interest rate, which means that we're earning somewhere around $6/month on our current balance of $8600.  That's not amazing, but it's still quite good.  I'll take free money wherever I can get it.  

Their Money Market savings account, which requires a minimum balance of $10,000 has a rate of 2% interest at the time of this writing.  Compare that to my bricks and mortar bank, which has an interest rate of .02%, and earns me about $.20 per year, this is a no-brainer.

Our plan is to keep about $15,000 in a Money Market account so that we have easy access to liquid cash, should we need it.  At the current 2% interest rate, that will earn us about $25 per month in interest. Above and beyond that, I've got my eye on some of Capital One's CDs, that currently have a rate of 2.85% for the three year.  That's a ways down the road, but I want to have a plan in mind for when that day comes!  Plus, it's pretty fun to shop for low stakes investments, and makes me feel very virtuous.

We're going to be feeling the fallout from the government shutdown for a long time, but I really encourage people to take this is a wake-up call to really examine your finances and make a plan.  It's cold outside, and a good time to hunker down with your bank balance.

I made bread!

I made my first two loaves of bread the other day, and they turned out ok--not great, but ok. I purposely bought too much yeast (also, I had two coupons) so I'd be forced to try again. Also, I forgot to add salt, but it still tastes ok.

I used the potato bread recipe from The Frugal Girl because one of my biggest hangups when it comes to bread baking is the fact that fresh bread just goes stale so quickly. She said that potato bread seems to stay good longer, so I thought that that would be a good kind of loaf to start with. I may have done something else wrong besides not adding salt, because it just didn't ever really taste that fresh. It was crumbly from the start, but I guess in a good way.

Two issues that I'm having right now:

1. My loaves were short and wide rather than tall and loaf-like. I have one loaf pan that is metal, and the other is silicon. What I've notices with the silicon one, even when making lentil loaf, is that everything just comes out wide. You heap in more ingredients trying to get a nice tall loaf, and the pan itself just expands until you're stuck with wide bread/lentil loaf. That works ok for the lentil loaf, but not very good if I want to eventually make sandwiches.
2. I mixed the yeast with the warm water and let it sit, then started stirring in flour. do I just heap in five cups of flour, and then mix it around, or do I stir and add? I feel like I got my hands in the mess too quickly because it was really sticky, but as I don't know any better, that may have been exactly right.

My loaves certainly didn't look like Frugal Girl's--she clearly has magic baking powers.
So, one point for finally ripping that band-aid off and making the attempt, but zero points for the bread itself. I'm ready to accept that the silicon loaf pan is crap and perhaps buy another metal one, but I feel like that's a waste if I don't totally love the bread I'm making. How many tries does it take to get it right?