Frugal February… A Different Take, One That’s Sustainable.

Seen the "Frugal February" challenge recently? 

The main idea is following holiday indulgences and resolutions being forgotten, use February (only 28 days) to do something difficult but important – get your finances back on track. 

Popularity has grown amongst the F.I.R.E. (Financial Independence, Retire Early) bloggers. You know, the supposedly “retired at 33” gurus that post multiple times a day to promote a website with 6 Google ads and links for annual subscriptions payable to their LLC. 

The challenge with this challenge?

Many use Frugal February as a month to not spend. While noble, how sustainable is this for improved outcomes, “Wow, $2,200 saved last month, we deserve a vacation in the Caribbean!”?

Instead, let’s discuss actions that provide yearlong benefits plus a better time to start. 

Finding Time To Focus.

Weekends are likely full of family activities, kids sports and honey-do lists. Add an unofficial national holiday, Super Bowl Sunday, and it’s easy to be derailed. 

So wait, start February 12th and go through March 11th. Kids activities have a break between winter to spring and family activities may be in a lull. 

Focus One: Credit Utiliza​​tion.

Run your annual credit report. If not above 780, plan to fix so it improves your future cost of borrowing. 

Next, review your terms (interest rates, fees, available limits) of credit cards, loans and HELOCs, including the zero balances. 

Also consolidate to 2-3 credit cards with high limits, then use one primarily that’s paid off monthly. Now it’s easier to track expenses for budgeting and maximizing rewards.  

Speaking of rewards, shift from air/hotel rewards to cash back automatically used the following month on purchases. Consider how often air/hotel programs update for a destruction of stored value. A $400 flight now likely needs 25,000 miles, whereas get 5% cash back on annual $25,000 spend, $1,250 was used on following month purchases.  

Focus Two: Shop Insurance. 

Been 3 years since shopped home, auto, umbrella and/or pet insurance? Good chance it increased over +30% without any claims to “cover increasing costs”. 

While partially true, consider, “We noticed you’re still here, so we’re betting on autopay and inertia to increase profits.” 

Focus Three: Your Automatic Payments.

Review all automatic payments and use of those services/products. 

Yes, it’s easy to cancel Peacock after a NFL playoff game. But what of subscriptions on products shipped by Amazon, Instacart, DoorDash? Are you still using it, how frequently and can it be found at a lower price

What of new bundles offered to better meet your needs? Talking about subscription plans for your cellphone, internet, cable/streaming, music, fitness, data storage, kids gaming, kids activites, club memberships, pet supplies, etc.   

Focus Four: Organize to Live With Less. 

Declutter, purge, or just throw (bleep) out. Feng Shui touts the benefits of energy and flow, but to me it reduces the need to buy stuff that will reclutter your space. 

Speaking of space, if paying for a storage unit, please stop. At $200 a month, $2,400 annually and $12,000 over 5 years, is the crap not good enough to be in your home worth $12,000? 

How about even $1,000? Prove it by listing for sale.

Get $600, then a $3,000 win/win (or 3X return) over next 12 months. 

Focus Five: Finish Your Taxes.

With taxes done by March 11th, there is time to complete deadline items like funding an IRA or Backdoor Roth, plus gain ~10 months to impact 2024 from discovery within the return. Also, you’re worry-free for March Madness, St. Patrick’s Day and kid’s new spring activities. 

To get more sustainable ways to improve finances, speak with your Certified Financial Planner. 

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.

Glenn Brown is a Holliston resident and owner of PlanDynamic, LLC, www.PlanDynamic.com. Glenn is a fee-only Certified Financial Planner™ helping motivated people take control of their planning and investing, so they can balance kids, aging parents and financial independence.

This article appeared in the April editions of Local Town Pages for Holliston, Natick, Ashland, Franklin, Hopedale, Medway/Mills, Bellingham, and Norfolk/Wrentham. Additionally in 1st weekly edition of Community Advocate for Shrewsbury, Westborough, Northborough, Southborough, Grafton, Marlborough, and Hudson. 

Please call me at (508) 834-7733 or directly schedule a meeting to learn more about considerations for planning and investing so you can balance kids, aging parents and your financial independence.

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