Does The Nest Thermostat Save Money?

Welcome to my first READER REQUEST.  I love ideas for new posts, especially from readers.  This is my inaugural reader request, and I hope to do many more going forward.  A big thanks for the inspiration…

In this ROI analysis, I’m going to take a quick look at whether or not a smart thermostat such as the Nest Learning Thermostat can save you money.

For those that don’t know, smart thermostats like Nest try to save you money by reducing your heating and cooling costs.  They learn your daily schedule and turn the heat down when you aren’t in the house, and, on the flip side, they have everything all nice and toasty when you get back from work (vice versa with cooling in the summer too).  Additionally, you can control the thermostat remotely from your smart phone (everything is getting smart these days).  So say you forgot to turn the heat down when you left for vacation.  No problem, just adjust it during your layover.

Smart thermostats are part of a broader category of stuff called the Internet of Things, which basically just means that you have more and more devices talking to and coordinating with each other over the internet.  Another “Internet of Things” gadget is the Fitbit activity monitor bracelet that measures your steps, sleep, and other activity.  The name might be sort of lame and the industry / movement might still be in its infancy, but the Internet of Things seems like it will have a major impact on our lives in the future.

And for budget geeks like me, that future is potentially now.  Enter the Nest Thermostat.  According to Nest’s sexy little website (former Apple guys or something… go figure [as noted in comments below, Nest is owned by google now even though it was started by former Apple employees), heating and cooling costs account for roughly 50% of a household’s utility expenses.

The numbers:

This is how much you would save on energy costs by switching to a smart thermostat.  I got my numbers from  More on that in a second.

  • 10-Year NPV: $1,181
  • 10-Year ROI: 454%
  • 10-Year Payback: 2.6 years
chart - smart thermostat

Investing in a smart thermostat is worth about $1,200 over 10 years for the average U.S. household in the average U.S. climate.  The investment doesn’t pay for itself until halfway through the second year because the Nest Thermostat is pretty expensive at $250 per unit.  This means that the nest probably is a shakier investment if you rent or aren’t sure where you’ll be living in the next few years, but then again, you might be able to take it with you or, in the case of homeowners, it might actually be a selling point (as noted in comments below).

I’ll go into the methodology below, but the important thing to note here is that these numbers assume you aren’t already using an older-generation programmable thermostat.

This example assumes you mostly keep the heat or AC at a constant level all day, even when people aren’t in the house.  We use an older programmable thermostat at my house already, so the savings would probably be a lot smaller.  However, apparently we are the exception, because according to, 89% of households with programmable thermostats don’t actually program them.

Another thing to consider is that some heating and cooling systems such as heat pumps, don’t save as much money with the Nest Thermostat because it takes more energy to bring the temperature back up to normal than to have never let it drop in the first place.  I also think this could also be an issue with homes that rely heavily on thermal mass to regulate temperature, but from what I have read, Nest software can handle this kind of thing.

Long story short, for the average home that doesn’t already use a programmable thermostat, a smart thermostat can probably save you a nice chunk of money.

In addition to the Nest Thermostat, there are two other smart thermostats that also get mentioned a lot… the Honeywell Smart Thermostat, and the Ecobee Smart Thermostat.  Apparently they operate on different algorithms which can sometimes save more money, but if you are looking to keep things simple, Nest seems like the best bet (think Apple).


I’ll come clean immediately and admit to using’s energy savings calculator.  The first thing I did was to determine what cities have the most representative climate of the U.S.  From this list of 100 city climates, it turns out that Baltimore, Maryland is the most typical (minimum cumulative deviation from indexed variable averages).  Close behind were Wilmington, Delaware, Philadelphia, Pennsylvania, and Indianapolis, Indiana.

Then I figured out what the average square foot size of a U.S. house is these days.  I made an educated guess of 1,500 square feet based on information from the National Resources Defense Council.  Inputting these two variables and assuming the house has central AC, Nest’s calculator said I would save between $60 and $250 every year, or about an average of $155.  Because I’m a little skeptical of Nest trying to sell me, I multiplied by 80% to be more conservative, which gave me a final average annual savings of $125.

And that’s the basic gist of it.  If you don’t already use a programmable thermostat, get after it!

  1. Smart thermostat costs $250 – Amazon
  2. Average U.S. climate is Baltimore – 100 select cities data
  3. Average home is about 1,500 square feet – NRDC
  4. Takes about 1 hour to install Nest thermostat at $10.00 per hour – Amazon reviews
  5. You don’t already use a programmable thermostat
  6. Smart thermostat saves about $125 per year in energy costs

Should You Change Your Own Oil?

Ah, a quintessential image of American manliness, a dude changing his own oil.  Grease-stained jacket, crew cut, work rag, socket wrench in hand.  Self-sufficient to the max, except the part about needing a very expensive piece of machinery to get from point A to point B.

Not that I have any room to judge; being a two-car household means we need our fair share of oil changes too.  On average, I would say that our vehicles get their oil changed a little under two times a year, although it should be less now that I started biking to work more often.

Oil changes aren’t a huge yearly expense, but forking over that $30 dollars is never fun.  What is even worse, however, is forking over $100+ dollars for all the extras you think you need.  I’m talking new cabin air filter, transmission flush, reverse light etc.  Anyway, the point is, if you can save some money doing it yourself, why the hell not?

Well, truth be told, you don’t really save a lot of money changing your own oil.  And if you include your labor costs, you are probably better off having a professional do it for you.

Before the numbers, though, I want to talk about actual ways you can save money on oil changes.  First, stop getting them every 3,000 miles!  You can cut your oil change costs by more than 50% if you decrease your frequency to a recommended once every 7,500 to 10,000 miles.  And if you have a newer car, you probably have an oil change indicator that takes all the guesswork out of it.

Check your owner’s manual for manufacturer recommendations, but the bottom line is that the 3,000 mile rule is sort of outdated.   Save yourself some money and stop making charitable donations to your local oil change outfit, even if that little sticker they gave you says otherwise.

Second, don’t fall for the up-sell.  It is hard to save money by changing your own oil because oil changes are loss leaders for a lot of places.  This means that your local quick lube joint prices oil changes at a very low, sometimes negative, profit margin to get you in the door.  Then they hit you with the higher-margin air filter and transmission work, which is where they really make their money.  Apparently grocery stores do this too with cooked rotisserie chickens, which is why the cooked birds in the front are often times cheaper than the uncooked ones in the back… that’s what gets you, the hungry, tired, low-will-power afterwork shopper, in the store to buy all the other higher-margin stuff.

Anyway, just don’t be naïve.  Keep track of the last time you had those things done and what constitutes a good, acceptable, or bad condition for these various parts and systems.  Watch especially air filters and lights because they are very easy to install could cost you a lot less if you buy them from a parts store.  If there is something legitimate that needs to be done and you can’t do it yourself, wait a few days.  Get quotes from some other places and you are bound to save a good chunk of money.

Third, look for deals.  You don’t need to be a loyal customer for something as routine as an oil change.  Follow the best price; you can sometimes get them as low as $15.00.

truck oil change

So that is how you can save money outsourcing your oil changes.  Now here are the numbers.

The numbers:

This example is for having someone else change your oil, because that is where the positive ROI is.  I try to keep all the ROI’s positive for comparison sake.

  • 10-Year NPV: $37
  • 10-Year ROI: 6%
  • 10-Year Payback: 0.6 years
might be profitable after 20 years

As you can see, both scenarios are basically even.  Change your oil yourself, or have someone else change it.  What really pushes the needle in favor of having someone else do it, at least financially, is the initial investment in equipment.  Specifically, I’m talking about a drain pan, car ramps, and a filter wrench.  These add an additional $55 of expenses in year 1.

Over a long period of time, the investment slowly loses value because your tangible profits are negative, and there is a growing opportunity cost associated with losing $10.00 every year.  It is the intangible costs (your own time) that keeps the investment afloat.  If you wanted to exclude those, it actually would save you about $4.50 each year to change your own oil, as opposed to costing you $3.70 if you include them.


Personally, I’m glad to see that it doesn’t really matter one way or the other.  Having someone else change my oil is quick, convenient, and mess-free.  On top of that, I get a free car inspection.  If I changed my own oil, I would be pretty lost to other potential problems and maintenance issues.

I really like both this and the garden example, and the beer example, because they help reign in my DIY enthusiasm.  This is one of the beauties of capitalism, the division of labor, and economies of scale… it doesn’t make sense to do everything yourself, and my life is much simpler for it.

So this is your excuse to take the path of least resistance when it comes to oil changes.  Don’t feel guilty, but also don’t get hosed on the up-sell!

If you do still want to change your own oil, however, don’t be discouraged.  It actually looks pretty easy.  A quick Google or YouTube search provides more than enough information.

  1. Get oil changed 2x per year (U.S. average miles per year = 15,000, AAA)
  2. Average outsource oil change costs $30 and takes 20 minutes (experience)
  3. Your time is worth $8.00 per hour while waiting at oil change place because you can do other productive stuff (versus $10)
  4. Your time is worth $10.00 per hour while doing your own oil change (my own personal number)
  5. It takes an average of 40 minutes per oil change when you do it yourself and account for all the cleanup, disposal, and parts shopping required (various internet sources, including Edmonds, The Art of Manliness, and The Simple Dollar)
  6. Oil + oil filter cost $25.00 combined (Walmart and Amazon)
  7. Drain pan, car ramps, and filter wrench cost $55 combined (Walmart and Amazon)

Brew Your Own Beer For Fun, Not For Money

I have been wanting to cover this topic for a while now because it is pretty fun and lighthearted.  Luckily I got just the nudge I needed last week when my Dad decided to try his hand at home-brewing.  A few years ago, this would have surprised me, but I have come to realize that my parents keep getting cooler and cooler with age.

So of course I got him to fork over the cost and time details for his first batch of hefeweizen, and I hate to break it to you, but from an investment perspective it ain’t pretty.  But, really, who is brewing to save money?  Not me, and not most of my friends.  Brewing is a DIY activity that most people enjoy and take pride in, in and of itself.  Sort of like cooking, but cooler and more populist.

I mean, being able to whip up a soul-warming pho or some homemade sweet plantain arepas is pretty sexy, but nothing sells like making your own beer.  It just appeals to the masses.  Beer is the great unifier… even people at The Harvard School of Public Health say you should probably be drinking more of it.

Which brings us back to the ROI analysis.  I read somewhere that the average American consumes 4 drinks per week, but my age group, or at least the people I know tend to drink a little more than that.  So I built this analysis around the assumption that someone drinks 10 drinks per week (1 per day Monday through Thursday and 2 per day on the weekend, roughly in line with the optimal amount for health according to the linked Harvard Nutrition Source article above).  This is a little more aggressive than my standard practice of assuming the American average, but I will include numbers for 4 beers per week as well below.

Of course, if saving money is your top priority and you are having 10 drinks per week, you should probably cash in on the low-hanging fruit in your alcohol budget and simply reduce your consumption before thinking about brewing your own beer.

I also assumed that if you want to brew your own beer, you are probably going to reach for that craft brew six-pack of Ommegang BPA instead of Busch Light at the grocery store, although I have to admit that either is an admirable choice in my opinion.  More assumptions are listed and discussed below, but let’s jump into the numbers.

The financials for NOT brewing your own beer, but buying fancy six-packs instead:

  • 10-Year NPV: $2,434
  • 10-Year ROI: 29%
  • 10-Year Payback: 0.7 years
numbers for NOT brewing your own beer – click for link to live spreadsheet

So why does brewing your own beer cost almost $2,500 dollars more than buying the equivalent number of craft-brew six packs over ten years?  What really kills the ROI in this example are the time costs associated with brewing your own beer.  Going to the grocery store or gas station is a lot quicker on a per beer basis than brewing your own.  If you brew your own beer, I’m estimating about 6 hours of labor involved, and at $10.00 per hour, that puts you in the red.

However, as I mentioned above, for a lot of people, brewing is a labor of love.  And actually, if you take time out of the equation and look at the “Hard Value w/Growth” number above, you will see that you do in fact come away with an additional $3,100 after ten years.  This is because home brews cost about $1.00 per beer while store bought cost about $1.50 per beer by my estimates (again not including time costs).

For me, the time-value costs are probably somewhere closer to $5.00 per hour because as much as I love showing off and drinking my own homebrew, I sort of dread the whole sterilization process (cleanliness is next to godliness in brewing).  At $5.00 per hour, brewing is stlightly more profitable than buying.

Finally, keeping with the spirit of beer populism, using the 4 drinks per week American average we get the following for NOT brewing your own beer:

  • 10-Year NPV: $1,071
  • 10-Year ROI: 31%
  • 10-Year Payback: 0.6 years

There are probably economies of scale to be had by, say, kegging versus bottling, or increasing the size of your batches, but those same economies of scale are also available for a lot of commercial microbrews (kegs, growlers, etc.).

So what all these cold boring numbers tell me is that you should brew for the fun of having your own beer around to share and enjoy with friends and family.  There are other potential benefits too such as controlling how your beer is made and knowing what kinds of chemicals and ingredients are in your food.  Also, you can exercise your creative power by trying new techniques or flavor combinations that aren’t commercially available.  And finally, if society ever had some sort of major catastrophe that set us back a century or two, at least you would be familiar with the basic concepts of fermentation 🙂 .  On the flip side, there are benefits to buying commercially produced beer as well, such as consistent quality (homebrew experiments have been known to go awry on occasion) and convenience.

Hopefully this is enough information and commentary for now because I’m starting to get thirsty with all this booze talk. Luckily I have some cranberry hibiscus mead on deck in the refrigerator.  If you are interested in brewing for its own sake, I would say definitely check it out.  It is pretty easy and rewarding, especially if you are doing something like mead or fruit wine (I love mead because it is so simple to make… no boiling, just honey + water + yeast + time).  But beer isn’t that hard either.

Go talk to the guys at your local brew supply store.  Or if you are feeling adventurous you can buy a kit from amazon and watch a few youtube videos to get started.

Also, you can check out my favorite mead recipe below – Dry Hopped Apple Cider Mead.




  1. No bottle costs (re-using old bottles).
  2. Equipment costs $110 every 10 years.
  3. Batch costs about $40 per every 5 gallons.
  4. Drinking 10 beers per week (for optimal health of course)
  5. 6 hours of work per 5-gallon batch
  6. Alternative is buying $9.00 six-packs
  7. It takes about 5 minutes to buy beer at the store
  8. Savings grow at inflation adjusted 4% per year

Dry-Hopped Apple Cider Mead Recipe (pictured at the top of this post)

  • 4 lbs honey
  • 3 gallons apple juice (I used Trader Joe’s)
  • 2 gallons water
  • cider yeast (I used Wyeast Direct Pitch Activator – Cider 476)
  • 1.5 oz fresh hops (I used cascade variety)

This will give you a nice, summer-drinking dry cyser with about 6% alcohol by volume.  I also carbonated mine with some extra honey before bottling.  You might have to wait 1-2 months to get the mead fully clear, but it is worth the wait.

Gardening Costs: 400 Square Feet And a Spade

It is about that time of the year again.  What has been a relentless winter for most of the U.S. is slowly giving way to green sprouts and flowering buds.  Spring is in the air, and gardening season is upon us.

Don’t be fooled by my introductory rhetoric, however.  I am not a gardener.  Last year was our first attempt, and even in the temperate, lush Portland climate, there wasn’t a green thumb between the two of us.

Our poor results last year were a big motivator for this post.  I was hoping to find out that gardening isn’t worth it, but sadly, it appears that it (barely) is, or at least can be if you plan well.  Last year we planted beets, pole beans, cherry tomatoes, and squash in a small raised bed.  The only crop we harvested reliably was the squash.

The beets never came up, the beans were eaten by insects, and the tomatoes got a nasty case of blossom end rot from irregular watering and/or low calcium levels.  The clear message was that gardening is not easy, at least not for us.  But we still might try it again this year because, well, practice makes perfect, and my wife loves summer gardens and the idea of being more self-sufficient.

The numbers:

For this example, I assumed a 400 square-foot garden plot.  As Eliot fairly points out below, this is a big-ass garden.  The reason I went with 400 is that most of the studies I used as sources were above 500 square feet.

To be fairer to urban dwellers such as myself, I also ran the numbers for a 100 square foot garden, which are at the bottom of this post.

  • 10-Year NPV: $1,633
  • 10-Year ROI: 37%
  • 10-Year Payback: 0.9 years
click for link to live spreadsheet
chart - garden

So a 400-square-foot garden saves you $1,600 over 10 years.  This is only $160 per year on an average annual basis, which isn’t that exciting, especially considering that the ROI is a measly 37% and the garden is pretty big!  A low ROI means that you have to invest a lot of money just to earn a little bit of additional revenue.  It ties up your free cash more so than something with a higher ROI.  But the point of the whole thing is that it DOES save you money to grow your own fruits and vegetables.  Gardening costs are high, but retail prices are higher.

As a reminder, my analysis includes labor/time costs.  So I’m estimating about 1/10 of an hour for every square foot, or 40 hours of work for the year in this example.  I valued my gardening time at $6.00 per hour versus my normal estimate of $10.00 per hour because gardening isn’t ALL work.  I like being outside, watering my plants, watching them grow, etc., but there are still a lot of other things I would rather be doing.

Time accounts for roughly 55% of total cost.  For the person that doesn’t find gardening to be a chore at all (time costs = $0 per hour), the value of this example would increase 230% to almost $3,700 over 10 years (see “Hard Value W/Growth” line above).


Gardening costs are a complex topic, so take all of this with a grain of salt (not the gospel, more of a directional guide).  There are as many ways to build a garden as there are fruits and vegetables to grow in it.  Some gardens will be more expensive than others because of climates, crop needs, pest control etc.  And the final “retail” value of your crops will vary significantly depending on what crops you decide to grow.

My main source of information for this example was a blog post by an Oregon State University Master Gardener, Gail Langellotto.  The blog post references six different gardening cost studies.  The value per square foot of these studies are wildly different, with the lowest value at $0.28 and the highest at $1.53, almost six times as valuable as the lowest.  That is a 600% variance!

That being said, there were some common winners in the studies that Gail referenced, meaning that these crops are the most likely to succeed and will save you the most money:

  • salad greens
  • tomatoes
  • beets
  • broccoli
  • potatoes
  • strawberries

Personally, I sort of want to throw in the towel on our garden.  I’m okay with paying a little extra for variety and the flexibility to buy my produce as needed (or maybe join a CSA).  There are also probably a lot of other things I could do with my time that have an ROI greater than 37%.  Additionally, organic food is a value of ours, and growing an organic garden seems much harder.  Heck, our non-organic homegrown vegetable produce from last year probably had more chemicals per pound than the non-organic commercial produce at the grocery store.  Paying a little extra for a lot less chemicals doesn’t seem to be a bad deal either.  And finally, to top it off, the downside risks of growing your own food are a lot higher.

As I mentioned above, last year we lost about 75% of our crops.  That is an expensive season.  I’m sure we could research more and be more disciplined this year, but the risks would still be there.  It is similar to the rent vs. own debate.  You might pay a premium to rent, but at least you can better plan your costs and avoid major downside risks such as having to replace a roof or redo the basement after major water damage.

Either way, knowing how to grow my own food does seem like one of those essential life skills that I should have, and I do like the idea of at least getting good at gardening before I decide to quit.  Not to mention it will make my wife happy.  I’m not committing one way or the other, but at least I have the quantitative perspective now to help decide 🙂

The bottom line for me is that a garden can be marginally profitable, but there are a ton of other ways to spend my time and money that would provide more value.  I might still garden, but financial factors probably won’t be the main reason.

  1. New garden plot costs of $0.10 per square foot ($40 here) once every 10 years (ex: wood frame for raised bed) (average of various studies sourced below)
  2. Annual garden plot costs of $0.50 per square foot ($200 here) (ex: fertilizer, mulch)(average of various studies sourced below)
  3. Time costs of 0.10 hours per square foot ($240 per year) (yahoo, personal experience, JD Roth)
  4. Retail value of garden produce = $1.25 per square foot ($500 here) (average of various studies sourced below).
  5. If you don’t garden, you have to spend an extra 4 minutes per week on your grocery store trips at $10 per hour for the entire year (estimate).  (Looking back at this assumption, it is a little generous to the pro-garden argument.)
Sources and methodology:

The most comprehensive source is the OSU Master Gardener post I mentioned above.  Gail cites 6 different gardening studies.  Of those studies, I liked JD Roth and Roger Dorian’s posts the best.  I also explored one additional blog post from Sharon Rawlette to help with estimates.

Basically what I did with all these sources is that I inflated all the older studies’ costs and revenues up to today’s dollars.  Then I averaged the per square foot costs and revenues to come up with my numbers.  Each of these studies was done a little differently, which means there is some inevitable noise in the data.  I isolated a few of the studies to figure out one-time setup costs, and I got my time estimates from J.D. Roth, my own personal experience, and yahoo questions.

I tended to round up for most of theses variables, so the average annual running costs per square foot might have been $0.45 per square foot and the fixed costs might have been $0.06, but I rounded those to $0.50 and $0.10 because they are cleaner numbers.  Plus there was already a ton of variance between each study, and on top of that, a newbie gardener is probably going to be pretty cost-inefficient for the first few years.  My net yield numbers (revenue minus costs) are pretty much right in line with Gail’s calculated average of $0.74 (I’m at $0.75).

So there you have it.  Happy planting.


So, as I mentioned above, 400 square feet is a lot of space.  I would imagine there are some economies of scale with larger gardens, but there are also drawbacks that I didn’t quantify.

First, you may not have that much space.  Second, you might end up with way too much food and have to spend extra time preserving, pickling, canning, freezing, and/or fermenting your extra produce just so that none of your hard work goes to waste.  This could add a lot of time to your gardening endeavors on a per square foot basis, acting sort of as a reverse economy of scale.

So how about a smaller, 10×10 (100 sq. ft.) garden?  This seems like it could be closer to the right amount of food without having to preserve extras, and more realistic for first time gardeners.

Here are the numbers for a 100-square-foot garden:

roi - small garden

So the ROI doesn’t change; it is still a measly 37%, and now the dollar savings (including time costs) are even smaller.  For me this further strengthens the argument that, similar to brewing beer, you should garden because you like it, not because it will save you money.

For someone that doesn’t care about the time costs and simply likes gardening or wants to learn (or might even pay to learn), it saves closer to $100 per year on average.

I did tweak a few assumptions here besides the area of the garden.  I assumed that your time costs would increase 10% on a per square foot basis because of economies of scale (ex: still need a spade regardless of how big your area is), so 0.11 hours per square foot, or 11 hours for the year.  I also assumed that the alternative scenario of grocery store shopping time drops by about 50% because the equivalent amount of groceries needed to replace your garden produce is smaller.

Feel free to download the spreadsheet and mess with the numbers on your own because this is sort of a tricky one, but most of the signs point to a mediocre return on investment on a percentage and total dollar basis.

The Dirty Little Secret About Early Retirement


Here’s the dirty little secret you won’t hear too often in the early retirement community: income matters, A LOT.  A typical handling of the income conundrum goes something like this: “Yeah, it can be hard to retire early / save a lot with lower incomes, but it is still possible if you are determined.”  The sad reality that this attitude conceals is that, while it still may be *possible*, retiring early with a low-to-average income requires significantly more sacrifices.

Specifically, the average American household earning $50k per year probably won’t be able to retire in less than 30 years, even with a budget similar to Mr. Money Mustache, unless they are willing to give up some other basic necessities, which is asking a lot and living a life out somewhat out of balance in my humble opinion.

Part of the reason this harsh reality doesn’t really get highlighted too often is that it doesn’t sell; it doesn’t bring in page views.  I wish, however, that it would get discussed more frequently because there is an unsettling amount of victim-blaming in certain personal finance corners of the internet.  True, sometimes there are ways out of tough financial situations, but not acknowledging how much more difficult it can be for someone like Jannette Navarro, a working single mother, to escape the cycle of poverty (much less, retire early) does a true disservice to the struggles of average and low-income Americans.

The common thinking about people with low savings rates, even at lower end of the income spectrum, is that they should still be able to find some fat to trim in their budgets, which could theoretically lead them to financial independence.  The truth of the matter, however, is that a basic bare-bones budget is still really expensive, even without the supposed frilly indulgences like daily lattes and weekly hair salon trips (an unfortunate racist welfare queen trope).

The numbers:

1. Not surprisingly, rich households save a larger percentage of their incomes.

Do the Rich Save More?… Yes, at least in the late 1980’s.

Take a look at the “Active (median)” line on the bottom right.  This is the active median savings rate (doesn’t account for passive increases in wealth).  It shows that the richest 20% of households save about 15% of their incomes, while the poorest 40% barely save anything.

Is it because the poor are lazy and overindulgent in luxury expenses like lattes, or is something else going on?  Something else, I would argue…

2. A basic needs budget is actually pretty expensive.


This table shows that, on average, a basic needs budget is about 200% higher than the federal poverty line.  This isn’t surprising, since the methodology for calculating the federal poverty line is completely outdated and doesn’t account for things like transportation or medical expenses.  In fact, it is calculated simply by multiplying the “subsistence food budget” by 3.

So looking at the specific numbers above, living in a single-adult, two-child household in a moderate-cost city requires a little over $40,000 per year to make ends meet(2009 dollars).

3. The average American household has about 2.5 people in it and makes about $50,000 per year (2013 dollars).

Remember the savings rates by income quintile chart above?  Here are how those household income quintiles looked in 2012:

By definition, overall median income is going to be pretty close to the mean of the third household income quintile, and it is.  So roughly 50% of U.S. households make more than $50,000 and roughly 50% make less.

4. The average 2.5-person household can realistically only save about $14,000 per year (28% savings rate on $50k income).

The average of federal poverty thresholds for 2 and 3 person households is about $18,000.  And since we’ve established that a bare-bones budget is about 200% of the federal poverty line, this means that the average 2.5-person household probably needs to spend about $36,000 a year strictly on necessities.  So on a $50,000 income, that leaves $14,000 left-over for savings (before taxes).

5. A 28% savings rate requires roughly 33 years of work to reach financial independence.

Remember this chart from my post on financial independence?

years until retirement vs. savings rate

The chart shows, it will take the average American household, living on a bare-bones budget, about 33 years to save enough money to become financially independent.  Not so easy, right?  And it takes even more time for the 49% of households earning less than $50k.

A Mr. Money Mustache reality check and comparison:

Okay, I can imagine someone being skeptical of the bare-bones budget figure, so I wanted to run a reality check against Mr. Money Mustache’s own spending numbers.  During his wealth accumulation phase, he and his wife averaged about $100,000 in combined annual income (twice the U.S. average) and $36,000 in annual spending for a rough 64% savings rate that allowed them to retire in 10 years.  Not bad… quite impressive actually.

But notice the connection in annual spending between the MMM 2-person household and the bare bones budget for a 2.5-person household.  They are EXACTLY THE SAME.  MMM is the first to admit that he still views their lifestyle as pretty luxurious (organic groceries, beer and wine, nice house, etc.), and that jives perfectly with the fact that they were a 2-person household living on what I’ve calculated to be a 2.5-person bare-bones budget.  They were living a little above their means (but not much)

a day in the life of the MMM family

The funny thing is that most people other than frugal personal finance nerds look at the MMM lifestyle as a huge sacrifice (no driving, even in crappy weather, very few restaurants, no international travel, limited travel in general, no cable, very little shopping, lots of DIY projects, skimping on heat and A/C, etc.).  In other words, most people would agree that $36,000 per year is a very reasonable bare-bones budget for a 2-person household, even more so for a 2.5-member household.

So with a $36,000 MMM-style household budget in mind.  Here is how long it would take to reach financial independence given different levels of income:

36k income retirement years chart

In other words, while the MMM household was able to retire in about 10 years because of their high salary (and frugal lifestyle), the typical U.S. household living the same frugal lifestyle would be required to work roughly 20 additional years simply to  accomplish the same thing.

Concluding thoughts:

I don’t mean to discourage anyone in the bottom half of the income spectrum from saving money.  Achieving financial independence in 33 years is still better than not achieving it at all, and is also better than achieving it in 40 or 50 years.  But this message is radically different from the get rich (pretty) quick promises that are normally discussed in the early retirement blogging community.

This is an important message to get across, because I have talked with low-income earners that are turned-off by the unrealistic advice they see on the internet (“Save a minimum of 50% of income!”) .  I’m guilty of this too.  I generally emphasize ways to cut costs rather than grow income, but I don’t mean to hide from the fact that this advice isn’t appropriate, nor realistic, for a large portion of the population.

There are some early retirement hall-of-famers, such as Jacob from Early Retirement Extreme who lived on $7,000 a year, that show how financial independence can actually be accomplished with much less.  But I think most would reject his lifestyle as too radical.  The more plausible path for a household with a low-to-average income is to look for ways to earn more.

Eating a strict diet of lentils, rice, and beans might not be everybody’s thing.

In the future, I hope to write on the subject of bringing in more money.  In the meantime, though, Jay Money has a great Side Hustle Series at Budgets Are Sexy, and Mr. Money Mustache also has two posts dedicated to ways to bring in more than $50,000 without a degree.

So, in closing, saving money and achieving early retirement is much easier for high-income earners.  The realistic best case scenario for roughly half of Americans is to run on a bare-bones budget and still not reach financial independence for 30+ years.

Different situations call for different advice and understanding.  Let’s not forget nor diminish the challenges of making ends meet for less-fortunate segments of the population.

Cooking at Home vs. Eating Out

Scallop sashimi, aji amarillo, lychee, pink peppercorn at Smallwares in Portland, OR


Here’s the thing.  I used to eat out at restaurants so much that I decided to start a food blog in 2010 to keep track of all the fabulous meals I was having around NYC.  I didn’t want to forget them; I wanted to savor the memories.  I will say, looking back at the blog for the first time in a few years, I’m still really glad I documented it.  I ate some amazing food in NYC (and Portland), and I probably would have forgotten some of those experiences otherwise.

Anyway, I don’t dine out as much these days, mostly because I took a hard look at my values and decided that the excessive spending on foodie restaurants didn’t really align that well with my life priorities.  Luckily I like cooking too.

We cook a lot more now and go to restaurants just occasionally, usually as a treat or to socialize, which are happiness-enhancing behaviors (delayed gratification) and also fit better with our priorities.  Life is good under this new paradigm, and if you have similar goals/values/priorities and a weakness for restaurant food (and drink), I would definitely encourage a test run.

Apparently, most people eat a little over four commercially prepared meals per week, or about 18 per month.  These meals cost about $13.00 on average versus about $4.00 when you cook for yourself.  But those are just face-value costs and don’t include things like driving, time/labor, and the intangible suckiness of having to do your own dishes.

So that is what this post is about… does eating out two times less per week, about a 50% reduction for most people, save you money.  And if so, how much?

The numbers:

How much will the small sacrifice of cooking for yourself two more times per week save you?  Assuming you’re like the rest of America in restaurant spending habits, my estimate is somewhere in the ballpark of $8,600 per decade.  Here are the details:

  • 10 Year NPV: $8,632
  • 10 Year ROI: 88%
  • 10 Year Payback: 0.6 years

That is a pretty snazzy $86-hundred for simply 86-ing two restaurant meals per week, especially just for one person! And being even more ambitious by cutting 4 meals out every week is worth over $17,000 per person every 10 years.

Some notes and observations…

I’m including time and labor costs in these numbers.  If you exclude them by looking at the hard value with growth number, you’ll notice that the top-line value of two less meals out per week exceeds $12,200 over ten years.  It isn’t a big surprise, at least to me, that cooking requires a bit more time and is slightly less fun (mostly just the dishes part).

Over 10 years, the average meal out costs about $15 with time and labor costs included versus $13 without.  Compare that to $9 and $4 for home-cooked food.   This means that cooking for yourself saves about $6 per person every meal when you count time and labor costs.  Excluding time and labor costs, the savings is even greater at $11 per person per meal.

On the intangible cost front, I’m assuming that driving costs essentially cancel each other out for both scenarios.  I’m also assuming that your time is worth about $10 per hour when cooking and $7 per hour when chillaxing at a restaurant with your friends/family/smartphone/book.

For the commercially prepared meals, I’m guessing average wait times of about 10 minutes per meal versus 30 minutes of prepping, cooking, cleaning, and packing-up when cooking for yourself.  30 minutes might seem low, but there are a lot of meals where you don’t have to cook anything at all because you made huge portions the night before (more on this later).

Anyway, that is the basic framework, and it is all adjustable if you want to download and tinker with the ROI spreadsheet yourself.

General musings on cooking more often:

There are a few ways to leverage this example even further.  I’m using a $4.00 per person per meal assumption when you cook for yourself, but Mark Bittman from the New York Times has a great infographic showing how you can have nutritious meals at even lower costs. And if you really want to amp things up, aka, keep your food costs down, Leanne Brown has a free cookbook that shows how you can cook healthy meals on roughly $4.00 per day or $1.33 per meal!  This would be huge additional savings if you wanted to give it a try.

RV Toilet Leaking On Floor

RVing is a great option to take when you want to enjoy camping without suffering the hardships of camping especially when it comes to the use of the bathroom. But what do you do if you suffer from toilet leakage? You are left with two options which include taking it back to the dealership for repair or fixing it yourself. The former is a good choice especially when you don’t want to get your hands dirty but it is expensive. But for an easy and inexpensive method of repair, you can fix the toilet yourself by finding out how to fix the RV toilet leaking on the floor.

Now, if your toilet is leaking around its base, the most likely cause would be a bad flange seal between the toilet and the septic tank. To repair it, you would need certain equipment that include.

Rv Toilet Leaking On Floor

Equipment for Repairing Toilet Leakage

  • New flange seal for your toilet model
  • Wrench or socket set
  • Teflon tape
  • Putty knife
  • Old towels
  • Hand mirror
  • Rubber gloves
  • Cleaning supplies

How to Fix RV Toilet Leaking on Floor

1. Verify the leak location

To fix the leakage in your RV toilet, you have to examine the toilet to verify the point of leakage. You have to be sure so you avoid mistakes in your repairs. Take a hand mirror and examine the back of the toilet and the bottom fittings to see where the leakage is coming from.

The toilet may be leaking from the water inlet valve or the flush valve so you have to confirm the point of leakage.

If the leakage is coming from under the toilet you will notice the leakage when you flush because water goes through the flange.

2. Shut off the water

You need to shut off the water inlet flow as the next step. If your toilet has no water valve, disconnect the water pump instead. Flush the toilet immediately to empty the toilet and get water out of the way.

3. Disconnect and remove the toilet

The toilet is being held down by two or three bolts which may be covered. You have to look for caps sticking up from the base of the toilet. Take off the cap with a putty knife then use a socket or wrench to remove the nuts holding the flange bolts.

You may find the nuts at different locations such as on each side of the toilet or one may be in front and the other behind or they use three bolts to hold it down. Loosen the toilet water supply from the inlet valve and pull the toilet away from the wall.

Pull out the toilet from the flange bolt and set it aside. This may cause a big mess so you may want to spread a towel or put a garbage bag on the floor before loosening the toilet.

4. Remove the old flange seal

The seal may be found around the drain hole underneath the toilet or it may be stuck at the bottom of the toilet. So find it and take it out. If the seal is old and made out of wax, make use of the putty knife to take it off so the toilet base can be clean of flange debris so the new seal can seat perfectly.

5. Replace the seal

After cleaning the area, put in the new seal. Center it around the toilet drain flange while following the producer’s instruction.

6. Install the toilet back

Slip back the toilet in place over the flange bolts and position the toilet drain into the flange seal. Ensure that the toilet, the drain, and the flange are connected properly. Once it is positioned properly, re-tighten the nut. Reconnect the water supply using the Teflon tape after cleaning the supply nozzle. Turn on the water supply to see if everything is working perfectly.


Your toilet is now fixed and ready for use. If you notice any other issue you may not handle, you can call on a professional to help you check things out.

How To Replace Bathroom Tiles That Have Fallen Off

Is the mortar used in holding your tiles in place pulling off? Have any of your bathroom tiles fallen off yet? If this is the case, then you may need to repair bath tile before all of them come off. If you don’t repair them in time, water can get underneath the tile and cause more tiles to come off or ooze off a putrid smell. If you don’t repair the tile immediately it starts coming off, the small repair task may turn out to become an expensive repair.

How To Replace Bathroom Tiles That Have Fallen Off

Why Do Bathroom Tiles Come off?

There are different reasons as to why your bathroom tiles come off your wall in the first place and if you don’t take note, your tile may come off soon as this is something that almost every house owner would face at a particular time or the other.  Hot water is a major cause of the deteriorating state of the seal holding the tiles as it can rupture the seal of the tiles and cause the tiles to fall if any of these issues occur;

  • The tiles were not properly cleaned before application. When the tiles are packed in a store for a while before use, chalk dust usually covers its surface and can make it hard for the tiles to adhere to an underlying surface.
  • The riles were not properly primed
  • The grouting was carried out less than 24 hours before the tile adhesive set up
  • The adhesive used in setting up the tiles cannot stand up to water (do not use water-soluble adhesives in kitchens and bathrooms)
  • The grouting done on the wall was not waterproof
  • The tiles were not properly grouted leaving room for water to seep in behind the surface.
  • The grout mixture was not sealed with a grout sealant after application

These are just some of the issues that can make your bathroom tile fall off and they are tied closely to the installation process of your bathroom tiles. Therefore you should properly install the tiles so they will not fall off even in the busiest of bathrooms with hot water exposure.

How to Repair Bath Tile

Bathroom tiles are made strong during production making them quite durable.  But they may not last on your walls if they become vulnerable to the effects of improper installation. If you find out that your bathroom tiles are peeling off, follow these quick steps to repair bath tile

Remove the Tile

If your bathroom tile hasn’t pulled off entirely but is broken or a particular section has pulled off leaving a few remainders on the wall, you would have to remove the remaining pieces. 

When you want to install a new bathroom tile, your surface has to be free from any remnants of the former tile.

When removing the section of the tile that needs replacement, you have to be careful so you don’t damage the adjacent tiles. There may be some remnants left behind on the wall after removing the tiles, you have to scrap them off entirely. You may need to sprinkle some water to soften the remnants.

Install the New Tile

Before you install the new tile, you may need to choose your adhesive. There are different types of adhesives in the market with each made for a specific purpose.  When installing tiles in your bathroom, it is advised that you use water-based mastic adhesive. Apply a thin layer of the adhesive on the back of the tile and place the new tile firmly into place holding it down for 30 seconds or more.

Grout the Tile

Performing a grout job on your newly installed tile would make the edges waterproof and tight so it’s essential that it is performed accurately. Let the adhesive you just applied dry for up to 3 hours before grouting the edges of the tile.

You can consider two types of grouting to perform namely

  • Unsanded grout which is best used for tiles that are 1/8 of an inch or less apart or
  • Sanded grout which is best when the distance between tiles are more than 1/8 of inches

Mix the grout with water until it is pasty then spread it onto the tile going past the edges to make sure it spreads evenly.  Allow the grout dry for 30 minutes or more then wash off any grout on the surface of the tile.


Leave the tile to dry and set by itself for up to 24 hours or more. This way it will set properly and ensure that your tile is held steadfastly against the wall. This is a quite simple method of repairing bath tiles anyone can do. It is cost-effective and efficient if you follow the steps thoroughly.