Let's face it, this economy sucks.
A gallon of gas costs more than a quick lunch, mortgage companies are in more trouble than you were your Freshman summer and people are nervous. For the regular Joe, you may notice that cash buffer at the end of the month is getting tight. You may be questioning your purchase of that new boat this summer or maybe your delaying your vacation till you get that "Here-don't-pay-attention-to-the-bigger-economic-problem" check from Uncle Sam this Spring. Either way, we need to figure out how not to lose our shirt this Summer.
So, for the rest of us that can't cut out the $4.00 Starbucks lattes and manicures to save us cash, here's a sure-fire list of 10 things that will save you cash...
- Don't miss your payment due dates
This may seem awfully obvious, but you'd be surprised how easy it is to do. This isn't exclusive to your credit card payment, either. It's easy to hold off that mortgage till the 5th or the 14th, but read your fine print. It may cost you anywhere from $25 to $50. Your credit card is the worst, these fees range from $39 and up and may even change your APR... that's bad news. The key is never to carry a balance to begin with, but if you have to remember... pay on time. If you can, pay it off. Think of your money as a sliding scale of interest. If your 401(k) is making you 7% and your CC is costing you 19%, you're essentially losing 12% on your money. This may be the only place you hear this, but it works: use your savings, decrease your 401(k) contribution (only temporarily) and get those credit cards paid off. They've become such an acceptable part of our culture, but they're a dead end road of debt.
Debt is dangerous, if we're tied to our job just to be able to make our payments, then we're essentially owned by the process. Get rid of it and give yourself a new lease on life. More articles to come on this... - Examine your grocery bill
Jody (my wife) and I are pretty thrifty (and trust me, we didn't start out this way, this is the result of making every financial mistake known to man, prior). We do our best to save every penny we can (except for that new target rifle I just bought...), however we still, just like everyone else, wish we could do more. Sometimes, we're dumbfounded at how much money it takes to operate a family of 5. About a year ago, I did my own practical analysis of where we were spending our money and found something startling: we were spending nearly $700 month on groceries! I'm not talking about steaks at Morton's, I'm talking about milk and sausage and pasta and cereal! Now, I do feed 5 people, but this was phenomenal. I had discovered the gaping black hole that was vacuuming my money out of my checking account.
First off, let me say that to eat healthy, you've got to be willing to pay for it. Fresh fruit, fresh vegetables; its gonna cost you, however, you can do something about it that doesn't require you to pre-package your meals or eat $0.25 boxes of mac and cheese or even buy your jello in 55 gallon drums from Sam's Club.
Jody and I found that by 'centering' our meals around staples we could moderate our spending. By finding that bulk bag of cod, we could figure out how to squeeze two or three meals out of it. By adding a vegetable and a bread to it, we could typcally make an entire meal for around $5.
Tip 2: shop at discount stores for less perishable items. We shop at Aldi for much of our less perishable items like canned goods, bread, milk, eggs, etc. You'd be surprise how much money can be save $0.50 at a time.
So, plan what you're going to center your meals around and put together a budget of what you can spend. When you go to the store, take that much cash and plan your list. You don't need to plan every meal, but 'center' every meal and your grocery budget will definitely benefit. - Run your furnace full time and close your doors
Sounds crazy, huh? Let me explain... when I say run your furnace full-time, I don't mean the heat, I mean the fan. On every thermostat, there is an option to run the fan on auto or full time. By selecting the fan option, you're not changing the temperature in your house, simply keeping air moving. By continually moving the air through your house, you're effectively balancing the temperature more effectively.
You'll find that your furnce 'burns' less, meaning the gas kicks on less often because the temperature is balanced out. Now, in addition to doing this, you must, must also do the following:
Close your doors... in many houses, there are areas that naturally draw colder air in. For me, its the mud room between my garage and my living room. This room has no supply or register from the furnace and the door is regularly opened and closed. This causes this room to be colder than the rest of the basement. If I leave the basement door open, between these rooms, the basement is perpetually colder and I find myself running my furnce higher to offset the difference, however, if I keep that door closed, the rooms balance their own temperature. The mud room is cold, man, but who cares, the only thing I'm doing in there is hanging my jacket up, right? So, close the doors to the rooms that don't need the heat. Bedrooms, laundry rooms, mud rooms, foyers, etc. Keep 'em closed and your gas bill will drop, guaranteed.
So, you're doing this, but you've got 3 rugrats that won't close the door or turn off a light if their life depended on it, right? What do you do...? - Create an "Incentive" program for your kids
Kids are smart, they're lovely, they're endearing, but they are masterminds of sabotage when it comes to trying to keep things closed, clean or off. So, realizing that you're not going to change millenia of ingrained apathy towards your checking account, one must take decisive action... Jody and I (with great influence from my own father's childhood discipline) created an 'incentive' program (which is kind of misleading, as this is negative-but effective-incentive).
Every time one of my kids leave a door open that is to be closed or a light on when they leave a room, it costs them a dime. $0.10. 1/10th of a dollar. Now to you and I, that doesn't seem drastic, but when you're only raking in $5 a week in allowance, this can be a punishing blow. It's a very passive approach to discipline as well and it makes kids of all ages understand the 'cost' of living. A word of advice: if you're going to start the process, make sure you enforce it. If you do it, it works like a charm. Once again, pennies at a time, but lots of pennies over a winter or summer season. - Eat for free
Denny's on Tuesdays & Saturdays, O'Charley's any night of the week and a handful of other restaurants all have 'Kids Eat Free' programs. Now, this is obviously not white linen service, but sometimes, you just need the change of pace, get your beautiful bride out of the house and go get some eats! As a family of five, drinking water vs. soft drinks, we can eat a nice meal at Denny's under 20 bones. That's music to Mr. Frugality's ears, baby. Then, save that cash you would have spent on dinner and use it to buy movie tickets and a babysitter for a night out on the town with your girl! - Think outside the box with your Cable, Internet & Phone bills
If you're like me, you have broadband internet, phone and cable service. These three dudes can end up costing you a pretty penny, especially when that 12 month $29/mo. service quietly expires and your service goes to $44.99/mo. Make sure you take a close look at what each service is costing you and invest a couple hours on a weekend to ensuring you're getting the best deal.
When I finally got an HD-enable television, I wanted to expand my 'basic' cable service to include HD stations, however, the standard offering was all or nothing. To get HD, you had to have, at minimum, the expanded package + the HD tier. Through a little finageling and some veiled threats at moving to the competitor, my cable provider allowed me to keep the basic cable package, rent the digital box seperately $4.99/mo., and purchase just the HD tier for $7.99/mo. Overall, I saved myself around $50/mo. and I still have all the HD channels I wanted.
Check your bill, negotiate and consolidate. A little work in these three areas can save you, in some cases, upwards of $100/mo. - Identify, then Track what you spend
One of the biggest reasons people don't know where their money goes is because they don't keep track of it. We work so hard to get it, but we spend it with a swipe here and a swipe there. Your bank is sending you statements, but what do you do with them? File them?
You should look them over with a highlighter and a pen. First, do it every month, then, after a few months, do it every quarter. Highlight and separate different expenses like groceries, gas, house bills, entertainment and non-essentials. Then, when you look to slim your budget, you've got something to start with, plus, you've got a record that you're doing it right! - Bring your lunch
Boring? Maybe, but not always... remember that great breaded cod you bought up around #2? Yeah, baby. That stuff is great on a sandwich with mayo and lettuce! Think about it. I work in the city and a sit down lunch typically costs $10, minimum. If you consider you have 20 working days in the month, that boils out to about $200 bones. That's half a nice used car payment. That's $2,400 a year. That's enough to take one weekend a month and stay at a nice, downtown hotel every month...
The point is, utilize every bit of the food you buy and take your lunch. One, you'll most likely lose weight (prepared food from home almost always has less calories and fat... unless your bringing cold fried chicken, that is) and two, you'll be saving a ton. Would you like to be adding that to your 401(k)? Let me scare the crap out of you... If you invested that $200 a month you're currently investing on potstickers and fried rice in a steady growing mutual fund returning an average of 9% over 10 years, your lunch money would turn into $38,702.86. Yeah. Lunch. Think about it. - Buy a Vacuum Packer
Mmm... deer chili in June. Fried catfish in march. Or, what's left of that cod from last month. That's the magic of vacuum packing, my friend. What was once destined for the garbage disposal after a lonely week in the fridge next to your flax seed oil now has new life! You may be saying to yourself, "I can freeze food just fine, there, Mr. Ronco..." but what you don't realize is that no matter what, cold air freezer burns food, no matter how tightly you've packaged it... it's a fact of life. Snag you one of these guys at a Sam's Club, a Target, wherever and start sealing up half of that package of steaks, half that package of lunch meat, etc.
In addition to saving prepared food for later, a vacuum packer lets you make practical use of that 55 gallon drum full of cream puffs that was your latest impulse purchase at Giant Box Mart. - Have a garage sale
At the end of the day, we all have too much junk. Kids' junk, our junk, our kids' kid's junk... who knows, we just have too much of it. The great part? Somebody wants it. Wants it bad enough to come over and God-awful times of the morning to peruse through it. Who knew?
All it takes is a little motivation, a sharpie, little labels, some basic marketing genius and you're well on your way to tapping into your unknown cash mint. Some garage sales we've had have made us well into the $300-600 range. Not bad for stuff I didn't need anyhow and a Saturday!
There are several keys to getting it right, though. Advertise in your local paper, both on Wednesday and Saturday. If you check with the classifieds department, often times that have a steeply discounted program just for ads like yours. Advertise key things if you have them. People attend garage sales for staple fodder like tools, electronics, golf clubs, baby furniture and guns. If you've got the glitz, then flaunt it properly.
In addition to shrewd marketing, you can also create 'retail appeal'. This is a trick I just learned from a colleague. When setting up your garage sale, think less junk store and more Target. Group common items in an appealing manner, e.g. group pans and pots with utensils and dishes and place them on a baker's rack or table. Set up clothing by season and size. Another tip is to add some kind of 'fitting room' to your setup. This can be as simple as some clothesline and blankets but may be just enough to convince someone to buy that sequin and fur hat you bought in 1989...
The key to all these tips is use common sense. Being in control of your money is an awesome thing and something I believe many people take too lightly. By controlling your money, you don't have to lay in bed and worry about things because you've already taken control of them. You're planning for your future and you're enjoying your Today. And if that fluff isn't enough, then think about this... For conversation's sake, let's say that you enact all these ideas and make them work. Let's say that by being shrewd and paying attention that you can save $350/month. Let's say again that you're 30 years old. If you can consciously save $350/month for the next 30 years, you will have saved $640,760. And that, my friend, is some serious jack. Every penny counts.
