9 Tips to Reducing your Expenses

Happy New Year! We totaled up our spending and are proud of our first year of marriage! We spent a total of $47,673.40 in 2017 while living in the most expensive area in the United States, the San Francisco Bay Area. This included a 1 week trip to Paris in May, 8 weddings that we attended (all but 1 were in the Bay Area), 1 week trip to New York, and a 1 week trip to Hong Kong/Thailand.

Now how is this possible? Here were some key tips that kept our expenses low.

  1. Coffee – We treated Starbucks/Peets/boba shops like they were a real treat for us. Mr. Hair drinks at least a cup of coffee a day.
    1. Reduce Spend Tip on Coffee: Last year, we bought the Aeropress Coffee and Espresso Maker and hasn’t stepped foot in for a $3 black coffee ever since. As a result, we only spent $229.64 on these places.
  2. Clothes – I focused on my French minimalistic style and only purchased clothing that fit that style. Mr. Hair and spent a total of $2,467.84. Since our closets are built for the most part, we don’t plan to spend as much this year.
    1. Reduce Spend Tip on Clothes: Figure out your style and you’ll spend less on clothes, because now you’ll be more picky about what goes into the closet.
  3. Stuff – We only have 565 square feet to store things in, which means we are very cautious about what goes into this place.
    1. Reduce Spend Tip on Stuff: You should always question why you are buying something and then if we can find a place for it before paying for it, then buy it. This has kept us from buying a lot of useless stuff.
  4. Gas – This will add up a lot if you drive to work. We are lucky in that we only use public transportation and have a commuter transit benefit with the company to purchase as a before-tax deduction, saving us at least a few hundred dollars a year. We spent $953.12 on gas alone.
    1. Reduce Spend Tip on Gas: Search for alternatives in your area. For example, if there is a train station nearby, then bike to the train station and from there bike to work. It may take a little longer, but you can do this 2 times a week instead and save some money on gas while getting your workout in the morning!
  5. Mortgage – This is where we are fortunate enough to have bought in 2014 and live where we live now.  We live just across the bridge to SF on the East Bay side, where rent goes for $2,000+. We paid $17,866.56 and that includes the mortgage, HOA, and property tax for the year of 2017 (about $1,500 a month). Most people in the Bay Area will pay anywhere from $1,500 (an hour away from SF) to $5,000 (to live in downtown SF). The further away you live from SF, the cheaper it will be.
    1. Reduce Spend Tip on Rent: Determine what you can handle (commute time wise), check out the public transportation around the area, and negotiate with the landlord (if possible).
  6. Eating out and groceries – Mr. Hair loves to eat and try new foods. We blew through this budget pretty quickly and spent a total of $8.560.18. We started cooking more at the end of the year and this helped us a bit.
    1. Tip on Life: I would say that there is at least 1 category in your budget that you show allow yourself a higher budget in to keep you happy. For us, that was trying new restaurants.
  7. Travel – We love to travel. This year we took 2 international trips and a hand full of domestic trips. Hotel/Airbnb/flights cost us a total of $5,889.69. You’re probably thinking for 2 people? That’s way to cheap, impossible! Yes and no. At the end of 2016, both Mr. Hair and I got the Chase Reserve. Yes, we each of us paid the $450 annual fee, but got back $300 per person in travel expenses that covered some of our hotels and flights. Each of us also received 100,000 bonus points when we signed up and used some of those points to pay for our hotels and flights.
    1. Reduce Spend Tip on Credit Cards: Find 1 credit card that both of you will make all your purchases from to really reap the rewards that the credit card has to offer. Youtube Video Credit Sifu: Credit Ladder does a great job of breaking down the tiers of credit card that you would most likely be eligible for and then Nerd Wallet does a great job of comparing those cards within the tier.
    2. Reduce Spend Tip on Credit Cards: Having more than 1 card to try to take advantage of rewards doesn’t work if you aren’t big spenders as there isn’t significant spending to make the rewards worth it, especially if you are paying an annual fee.
    3. Reduce Spend Tip on Credit Cards: If you like to travel, we highly recommend the Chase Reserve. It’s a bit pricey, but compared to the major competitor American Express Platinum, we find that the Chase Reverse’s flexibility is better suited for us. We recently came across the Uber Credit Card, made specially for millennials and MagnifyMoney does a great job of demonstrating the pros and cons. We talked about it, but at the end of the day, Chase Reserve suited us much better based on what we spend most on.
    4. Reduce Spend Tip on Travel: Start at least 6 months out and with some basic research which budget flights go out of your airport. Check all the airline carriers in that hub. For example, Oakland Airport has recently attracted many low cost carriers to Europe (Norwegian Air and Wow Airlines) and is most of the time cheaper than flying in/out of San Francisco (SFO); however, it’s cheaper to fly SFO when going to Asia as all the main Asian flights are out of SFO. Then, check for the off-season if you can fly October, January, or February to avoid major holidays and children breaks. Finally, setup alerts on Kayak to notify you, but sometimes the budget airlines that flies out of your airport isn’t partnered, so you’ll need to check those separately. Ideally for the San Francisco Bay Area, round trip flights to Asia are as low as $400; round trip flights to Europe are as low as $300; and round trip flights to South American are as low as $400.

Bottom Line: Devoting all expenses to 1 credit card whenever possible to reap rewards, asking why we are purchasing physical items, and spending on experiences has made our 2017 a good year with friends, family, and adventures.

Cheers to a new year!

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