Here are 12 money-saving tips to help you save a couple of bucks in the midst of the continued brutal economy.
1. Keep a monthly spending journal. Create your own system, from a handwritten log to a sophisticated spreadsheet, to track every dollar spent from the mortgage or rent to your entertainment/movies/DVD and morning caffeine expenses. Know where every dollar goes to see where cuts can be made. Live below your means and learn to “do without” so you can build an emergency fund. You may have heard about creating a six-month or a one-year cushion, but this is an amount you have to be comfortable with not knowing what unforeseen expenses like car repairs or emergency room visits that tomorrow may bring.
2. Don’t carry debt … or get out of it. Set a goal to pay off the balance of everything but your mortgage, which currently has a tax advantage in the form of deductible interest. First tackle the loan with the highest interest rate and only do a debt consolidation loan when the interest rate is lower than the blended rate on the debts you’re paying off. Think twice about taking out a second mortgage, also known as a home equity loan or line-of-credit, to pay off unsecured debt. It may be tax deductible, but you will never lose your house for failing to make a minimum payment on a credit card. Advice from a mortgage broker who is more concerned about earning a hefty commission for a few hours of work should be disregarded.
If you don’t want to carry any debt at all, pay off your mortgage and guarantee a decent rate-of-return on your money. Recent chatter has indicated the interest deduction may be on the chopping block or at least up for discussion. Even with the interest rates dipping into the 3 percent range on mortgage loans, the interest you’ll be earning in a savings account is under 0.5 percent and stock market returns will most likely be mixed. Many have been slapped with the ironic salt-in-the-wound taxes on capital gains distributions and reinvested dividends on stocks and mutual funds that have tanked and would have been better off paying down (or off) their mortgage. Your house may have lost market value as well the last couple of years, but you had a place to live that was your own.
Be extremely hesitant to jump at an offer from your mortgage bank to set up biweekly mortgage payments to shave years off your loan. These “deals” are a source of income to your servicer and typically include substantial set-up and transaction fees for something you can do on your own. The bank may not immediately apply the additional funds to your principal balance, instead holding the money until there are sufficient funds to make a full payment. In other words, your loan won’t be “re-amortized” every time you make an individual payment. You will reap virtually the identical benefit if you make one additional principal-only payment per year.
3. Clip and Save – grocery. Clip and print manufacturer coupons and combine them with grocery store sales to trim your food budget. A local chain offers to double a maximum of five coupons of up to $1 with a minimum $25 food purchase on Wednesdays, the mid-week day with the least amount of customer traffic that your grocer is asking you to shop on. Double-coupon Saturdays have recently been added. Plan a weekly menu based on the three or four meats on sale every week. Stock up and freeze your staple items, which should last six months or longer if properly packaged. Learn to cook as you will eat both cheaper and healthier than you would by nuking frozen meals high in saturated fat and soup high in sodium. Watch out for the TV dinners that promote themselves as low calorie, reduced fat or healthy because you may be simply getting smaller portion sizes. You take a knee-buckling one-two combination punch in your gut and wallet for the price you pay for the convenience.
With the fast food giants pushing $1 double cheeseburgers and $2 taco meals, you have myriad options to scarf down a ton of empty calories for a just a couple of bucks. But have you ever felt physically or emotionally better after consuming more than a day’s worth of calories, saturated fat and sodium in one sitting? Think about packing healthy lunches at home and skipping the fast food run and you’ll save on gas too. This may help you avoid some of the medical issues we’ve been reading about the past few years that some have blamed squarely on the fast and junk food industries. It’s up to you what, where and how much you eat, so don’t waste time thinking about suing any merchant for any health issue from consuming too much of their product.
It can be expensive to eat healthy, so buy fruits such as strawberries and blueberries when on sale for $1.50 to $2.50 a pound. Apples are often on special at $.99 a pound and have a longer shelf life than most perishables. A 16-ounce bag of baby carrots can often be had for $1, while a bag of potato chips will run $2 to $3 on sale.
4. Clip and Save II- restaurant/entertainment. Take advantage of happy hour food and drink specials as well as buy-one get-one-free meal offers, but don’t order drinks you wouldn’t otherwise just to use a coupon. Beverages are where restaurants have their highest profit margins. This may negate your coupon savings, especially if it’s a buy-one get-one-for-half-price deal requiring a two-drink minimum. Remember that being frugal doesn’t mean being cheap, however, and over-tip for exceptional service from the wait staff and bartenders as they rely on gratuities to help pay the bills. They have been hit hard by the economy so be generous and treat them with kindness and respect and always address them by name.
Also, keep your eyes open for half-price specials to see the Brewers or your local major or minor league team this summer. There’s nothing like the sound of the crack of the bat, the pop of the catcher’s mitt and the roar of the crowd. It’s always a better experience to see your favorite players in person and you don’t have to spend a fortune to attend. You cannot put a price on the indelible memories your kids will have 25 years from now. In previous seasons, numerous offers would have netted you four seats in the Terrace Level for a mere $28 to $32 at Miller Park for a majority of the games. Check out websites such as stubhub.com to search for deeper discounts that can be had, especially on weekday games. With the mixed signals we will continue to receive about the economic recovery, expect promotions to see your favorite teams to continue.
Some have complained that the cost of food and beverage, parking and souvenirs make it too expensive to attend. If you feel this way, eat and drink at home before heading to the ballpark or check with the Brewers or your local team to see what carry-in food items and beverages are allowed. Park on the street near the stadium and take the scenic walk in, and buy your jerseys and hats when they’re on sale at the department stores.
5. Teach your children early and often about finances. Take your kids shopping so they can learn as early as they are able to comprehend that money doesn’t grow on trees. Have a portion of their allowance based on sorting through the coupons and store ads every Sunday to get an education in spending and saving. Have a daily and Sunday subscription to the Milwaukee Journal Sentinel as the savings from the coupons alone will cover the cost of your daily paper. In essence, the top-notch reporting of writers like Tom Haudricourt, Bob McGinn, Todd Rosiak, Tom Enlund and the Pulitzer Prize Award-Winning Raquel Rutledge will be FREE.
6. Credit vs. Debit. Use a credit card for major purchases, emergencies or when you are earning cash-back incentives, but don’t carry a balance at a high-interest rate when you have the funds available to pay it off, especially when you are earning next to no interest in your savings account. If you cannot pay for something other than prescription medications, medical expenses, grocery-bought food or fuel by the end of the free grace period, don’t buy it. Combine errands to ensure you are driving less. Assess wants vs. needs. Go with a debit card if your credit card spending is out of control so you can have the funds taken directly from your checking account. Plus, you may earn points that can be redeemed for gift cards from partnering merchants.
7. Use your library card. Place a hold on DVDs, CDs and books on your library’s website instead of buying them and having them sit unopened because of a lack of a due date. Some claim that a purchased DVD may be viewed only once or twice. You may have to wait a week, month or longer for new releases, so browse the newly acquired DVD section to pick up another must-see movie from the previous month or two. Take advantage of Waukesha County’s or your local system where you can have another county library’s DVD or book shipped to your local one free-of-charge. Check with your local library to see if your county offers a similar plan. So enjoy an old black-and-white classic like “Double Indemnity” or a recent one such as “Up” for free.
8. Forget fashion trends. Today’s $100+ pair of jeans is tomorrow’s donation or junk. Who among us hasn’t wondered what we were thinking when we bought that now-ugly blazer, shirt or sports coat? Stick to conservative or classic. Your kindness, smile and sense of humor – and not your clothes, watches or shoes – is what will make you attractive. Your pants won’t make you confident either, especially if you’re worried about the credit card interest you will end up paying to purchase the jeans.
9. Marry the right person. Human relationships are extremely complex, and emotions can run high even for couples whose marriages are built on a solid foundation. Two distinct personalities and communication styles will present challenges in dealing with money, sex and kids regardless of the economic conditions. So get hitched with someone with whom you can discuss anything. Of the number of issues confronting couples today, disparate attitudes and behaviors about finances have, at the very least, contributed to a global financial meltdown. This isn’t even mentioning the cost involved in hiring pricy divorce attorneys and paying alimony or child support. Other entanglements involving Social Security and pensions can create further headaches during divorce proceedings.
10. Treat yourself. Remember to enjoy money and life. If nothing else, the stock market troubles should have taught us to have fun spending our hard-earned dollars. So treat yourself when you have saved the funds to purchase an item, service or vacation in-full (make sure to check out the many websites for deals on flight and hotel packages). And renew your subscription to magazines such as Sports Illustrated and Entertainment Weekly for a mere $.36 and $.19 per issue, respectively. With all the money you’ll now be saving, you can afford it. Plus, if we can learn anything from the successes, failures and foibles of our favorite athletes and entertainers, it will be well worth the 55 cents per week.
11. Pull the Plug. I have no idea how electricity works, but I’ve read that even if an appliance is turned off, it will still consume power if it’s merely plugged in. If you don’t plan on using the TV (the cable box will have to re-boot) in the basement, the lamp in the spare bedroom or the clothes washer and dryer for a few days, unplug it to save a couple of cents. Some claim this will slash as much as 10 percent off the bill. Give it a try.
12. Just Ask. If you want a raise, a discount on your cable services, a free month of a gym membership, an extra session with your personal trainer or anything that is negotiable, ask nicely with a smile. Be prepared to back up your request with your loyalty or performance results. What’s the worst possible outcome if you make the request with kindness and without a hint of hubris? You’ll never know what you can get if you don’t ask for it … with a please and thank you attached.