If one is searching for personal enlightenment, forget yoga, meditation surrounded by crystals, sweat lodges or religious conversion. Merely itemize—honestly—your monthly expenses. You’ll likely find an assortment of surprises and embarrassments fueled by inattentiveness—or, at worst, complete lack of discipline. You’ll also find truth to the statement that the hospitality industry is an effective measuring tool for the health of our consumer-driven economy. And truth in another statement about that industry for consumers: for the most part, it’s a luxury expense quickly eliminated when times get tough. (When the recent recession hit, the restaurant industry took the brunt of consumers’ reflexive belt tightening.)
The Better Half and I looked closely at our expenses last month before my severance checks ended and the unemployment payments—amounting to just slightly more than half my previous pay before taxes—began.
Yes, a layoff will force one to dive into the money pool—as shallow as it might be—and find all the outgoing streams. And it should. Fortunately, The Better Half and I are not big spenders to begin with, and always look for ways to save money since our career paths won’t likely to make us rich (she’s a teacher, I was a magazine editor). We cook at home often, and don’t have expensive habits or recreational activities. We compost and recycle, which keeps the trash bill down. We let our tiny urban lawn grow a bit longer (we set the deck of the lawn mower at its highest notch) and thus never water it, and a rain barrel feeds part of our low maintenance garden—our quarterly water bill hovers between $80 and $90. We grow most of the herbs we use, some of them indoors during the winter—big savings there. Two years ago, we properly re-insulated the attic spaces of our 1923 home when it was re-roofed, and installed ductless air conditioning. The difference in heating and cooling costs has been dramatic; the improvements will pay for themselves in a few years. We have “Basic” cable. You get the drift.
So there we sat, itemizing. The largest expense, of course, was the mortgage. Fortunately we had refinanced a year earlier, taking advantage of the Federal government program to help homeowners underwater (nearly everyone), which dropped our monthly payment almost $300. The other largest expense? Not surprisingly, health insurance. Joining my wife’s plan after my layoff cost her an added $400 per paycheck. Yes, you read that correctly. Per. Paycheck. Fortunately that cost includes our daughter.
For me, it was easy to get started breaking down my spending. I use a credit card for nearly every expense to rack up points for airfare or some of the other household items available with the service (I pay the card off in full each month). The way The Better Half and I have things divvied up, I usually pay for meals out and liquor store purchases. Even in a modest month of eating out (we were watching our pennies during my severance run) we still hit $250. Nothing fancy, either—a couple D’Amico & Sons visits and two liquor runs took up most of that, and the rest smaller purchases at various bakeries, sandwich shops and cafés.
Are we spending too much on “hospitality?” If our healthcare expense didn’t rise by at least $600 per month (our daughter cost $200 per paycheck on my previous insurance) this wouldn’t be a topic for a short blog post. Unfortunately for most in our situation, there’s only one budgetary decision to make. For someone whose prior career depended on the hospitality and foodservice industry, it’s not made casually. The reality is this: we need to cut a lot from monthly expenses the longer we are stuck with one income and unemployment insurance.
Modern thrift. A fine device for a regular column, no?