We all know the saying, hard times don’t last, but people do. Well, I keep hearing (and occasionally saying) that times are tough, and I thought it was time to ‘tighten my belt a bit’. Due to a confluence of events, I find myself looking for ways to save a little more and spend a little less (just like old times), so I’m writing this article for both myself and you!
First, by offering full disclosure, the confluence of events… My wife and I were blessed with our second child on May 10, 2007; Although it is definitely a blessing, it also increases our cost of living. I quit my JOB in December 2007. Right before that, times were good so I bought a big house and a new truck. Despite a large down payment, the house still has a large monthly mortgage. The real estate market is doing worse than the economy in general, and the combined value of my real estate holdings has dropped quite a bit (which means smaller paydays if/when I sell any of my existing properties in this real estate market). Last but not least, I recently purchased two superior single family homes to fix up, and we’re trying to finish one while we do initial repairs on the other… So the ‘cushion of cash’ I had on hand is tied up in the purchase and repair of those two houses.
Second, with that out of the way, some painless ways to save more and spend less… If you haven’t shopped around for auto insurance in the last 1-2 years, now is a good time. I am not settling for a low quality insurer, or less than adequate insurance, but I am saying keep your insurer honest by making sure you are getting your money’s worth. Many people are surprised by the fact that the same two insurance companies, offering the same insurance coverage, two years apart, can completely change their rates… I have personally experienced it. Also, if applicable, you can search for other insurance, such as life, health, disability, etc. You can save money without any sacrifice! Do you have a cell phone plan that makes the most sense for you to use (I know someone personally who should have an unlimited plan, who continually spends a fortune on overage minutes, WHY?)?
If your electric bill is high, Lakeland Electric conducts FREE energy audits. Maybe you know some things you’re not willing to do right now, like upgrading to more energy-efficient appliances, but maybe there are also some cheap and easy ways to significantly lower your electricity bill that you haven’t thought about. If you have a sprinkler system, is it turned off during periods of heavy rain? Do you heat and cool your home sensibly (eg I heat to about 73 degrees in the winter and cool to about 77 degrees in the summer; a 4-5 degree swing should not result in any real discomfort, and if further spread doesn’t bother your family, even better)? How about you get a financial checkup? Are all your investments, individually evaluated, performing well and making sense? Do you know what you are invested in, and how and why it should bring you profit? Similarly, if you borrow, do your loans make sense?
Could they be better structured, have better rates, etc.? Especially if you have a balance on a credit card with a high interest rate, can you reduce it in any way? I know I am constantly bombarded with zero interest rate for X number of months of credit cards that could help. As an example, when I have a loan that I plan to pay off in full in the next year or two, I get a zero-interest credit card for eighteen months, pay off the loan with it, and now my full payment pays the principal instead. Part goes to interest. Are you one of those people who pays bills late for whatever reason, incurring late fees, penalties, higher interest rates, etc.? Find out what it takes to get up and stay up, and the savings alone will help you stay there. If you tend to spend more when you use a credit card instead of cash (which most people do), ditch credit cards. If, on the other hand, you have a high level of self-discipline, then use free, high-reward credit cards, charge all your normal expenses, pay the bill in full every month, and rack up rewards (I do this and my business does that my wife and I go out to eat well).
In fact, since I’m rehabbing two houses, I redeemed over $200 in Discover cash back bonus awards last month. If applicable, improve your credit scores so any future loans will be cheaper (better rates, lower fees). When it comes to tax season, are you getting all the deductions you’re entitled to? Many people intentionally don’t take the tax deductions they’re entitled to because they think it might cause an audit; little sidebar here: as long as you’re not doing anything ‘wrong’, the audit will probably do you less harm than the money you’re throwing away (in the rare case you do get audited). Here’s one I found saving me a lot of money recently… When I see something in a store that I ‘must have’, I wait and research online later. Two benefits: First, the urge to spend often disappears, reducing spending altogether, and second, I find that almost everything I research I can buy cheaper online than what I would have paid at the store (yes, even the shipping included). and handling).
If you eat a lot outside of WORK, can you save money by packing lunch more often? Something my family is guilty of quite often: we throw out perfectly good leftovers while eating out or preparing something more appetizing. Three solutions quickly come to mind: one, eat the leftovers; two, freeze leftovers for later; three, prepare smaller meals. If you have the time and the inclination (I don’t), plant a garden. Do you make sure to haggle and take advantage of deals on things you know you’ll use anyway? And, on the other side of the coin, avoid buying junk that you absolutely don’t need just because it was on sale!
Do you clip coupons, actively look for sale prices, etc.? While I think exercise is great and I actively exercise myself, if you’re one of those people who has an expensive gym membership and only goes to the gym twice a year, get rid of it. This is a fun and easy way to save a little money – my wife takes my kids to the library almost every week and not only do they get all the books they can read for free, they even get a ton of kids movies on DVD! ! With the popularity of cell phones these days, I know many people who have thrown away their landline because it was wasted money. Last and definitely not least, the old adage, Pay yourself first! ‘If you pay yourself last, you never will. If you pay yourself first, you will never miss out. These are all things that, with just a little upfront work, can help you save more and spend less without sacrificing your lifestyle. Next, let’s move on to the things that might hurt a little…
Third, ways to save more and spend less where the ‘no pain, no gain’ terminology applies… Depending on how badly you want to achieve your goals, how bad your financial situation is, your time constraints, etc., Let’s start with the extreme: can you work longer hours, get a second job, start a part-time business (even if temporarily to get over the hump)? Perhaps a stay-at-home spouse can pick up some work from home? In this economy, many stay-at-home parents babysit extra children for friends or family, allowing one family to earn extra money (babysitting) and the other to save extra money (cheaper than daycare). Perhaps private school or homeschooling should be replaced by public school, if only temporarily while times are tough? It’s not for everyone, but I know a couple who happily rented an extra room in their house for a long time.
Consider a smaller, cheaper, more fuel efficient car, now or the next time you buy a car (yes, as mentioned above, I failed miserably in this category). On the subject of vehicles, most of you are probably already packing a lot of errands into fewer trips and avoiding unnecessary driving these days. Are you making the most of free home entertainment? Brainstorm with your family all the fun, free or cheap things you can think of to do at home, then implement your favorites and save the cost of travel and entertainment.
Most Americans can save some money by eating out less, and I personally know that when I cut back on soda and drink more water, my body and wallet appreciate it. If you routinely drink coffee at Starbucks or drink alcohol at bars/restaurants, besides the moral issues, let me kill you now for what you spend per drink! Oh! And I won’t even start with the cigarettes/tobacco. Finally, this is what everyone hates to do: create a budget! First, spend like you normally do and track every penny for at least a couple of months…and find out where your money is really going. If you can bring yourself to do so, continue to track expenses for a full year so that you are sure to include once or twice a year expenses such as vacations, birthdays, insurance, taxes, etc. Nine times out of ten, there will be some surprisingly high expenses, and you’ll know where to look to stop the bleeding.
This article is just to whet your appetite, but if you’ve got some helpful tips and want more of the same, look online for some places to save money… I know I stumbled across a few when I was looking for personal financial information not too long ago, and saw some good advice as well as some I would never recommend… I’ll share a few as that can be good for a laugh… Cut down on showers to once a week (save on hot water, shampoo, soap and probably appointments!) , for those of you who are single!). Train your pets to use the bathroom. Go early on trash day and pick up what you need from what others throw away (I guess they say one man’s trash is another man’s treasure – LOL). Go vegetarian – it’s a cheaper lifestyle (I know meat can be expensive, but that seems extreme for a meat and potatoes guy like me!). Anyway, enough of extremes!!! Best wishes to all, and hopefully I’ll see you…on the other side of the rainbow (you know, where the pot of gold is)!
