I just finished reading the Automatic Millionaire and am mid-way throughyour book Smart Couples Finish Rich. My wife, Melanie, and I met while serving in Armenia as Peace Corps volunteers and were recently married in October 2004.
We both work for non-profit organizations, so we have to be careful with our money. That being said, we have a lot of friends who live near us in the District of Columbia metropolitan area and are often inundated with requests to go out for dinner, drinks, dancing, etc.
My latte factor has always been spending money on dinner and drinks with friends. A typical Friday night out in the DC area can cost anywhere from $60 to $100 per person after you factor in drinks, appetizers, the maincourse, dessert, etc.
I complained to my wife one day that I hadn’t been able to save much in my regular checking, so we looked at my bank statements and realized that our occassional night out was costing me much more than it was costing her. She’s always been a fabulous saver and has a large chunk of money that she’s accumulated since college, despite never having a particularly high-paying job. Naturally, I asked for her consultation. We decided that I could cut down on my latte factor by:
1. Having our pre-dinner drinks at a bar during happy hour 2. Limiting the number of drinks per evening to three or four 3. Ordering a quality brew for the first round (or two), then switching to a less expensive domestic for the rest of the evening. I could also switch to water towards the very end of the evening (healthy, and cost effective)4. Should the group decide to have dessert after dinner, we could suggest going someplace less expensive (like a small coffee shop). This is actually cost-effective and can be easily disguised as an adventurous suggestion.”Hey, why don’t we check out that new coffee house near DuPont. I hear they make great cannoli!”
5. Avoid mixed drinks (they take less time to consume and typically cost more than beer)
We also started consolidating our social engagements so that we had to “go out” less often, but with more of our friends. We have also started taking advantage of free stuff in the city to save on entertainment(museums, art galleries, monuments, etc.)
Using this strategy, I have been able to save $20-$50 a month in my entertainment budget. Eating out is expensive, so I hardly ever buy lunch while at work. Most people get bored with “brown bagging,” but my wife and I have found that sack lunch needn’t be boring. In fact, it can turn into a fun and romantic activity for a married couple. We plan our menu for the week and make it a point to incorporate interesting dishes into our weekly bill of fare. Then, we shop for the ingredients and cook together on two or three of the weekday evenings. We’ve experimented with Thai, Moroccan,Armenian, Cajun and Indian dishes in our first year together. Yeah, the grocery bill is a little higher than it normally would be each week, but it is still much cheaper, overall, than buying lunch two or three times a week.If we each bought lunch three times a week, it would cost us an additional$48 per week).
By cutting down on what I spend on entertainment and lunch, I’ve been able to contribute the maximum amount to my Roth IRA and 14% of my income to my Thrift Savings Plan (I am now a government employee).