The simple mention of the words money, save, budget cause my brain to freeze!
When I worked in the financial planning industry, helping my clients to budget was routine. It seemed so simple and doable! It is, but if one never budgeted before, as any change, it could be difficult at the beginning, but worth sticking to it until it truly becomes routine.
Here are some general rules:
1. Keep it simple!
2. Know your NET income.
3. Determine your fix expenses versus variable/ flexible expenses.
4. Shop around for BOTH.
5. Know what to pay first and why.
Fix Expenses are those nagging bills which you don’t have the power to change. However, you do have the option to shop around and use less (examples of fix expenses: mortgage/rent, taxes, health, car, homeowners/renters insurance, water, heat, electricity, cable TV, internet.) You could drive less, use less water and turn off the electricity when you leave a room. One might argue that you don’t have to have a T.V. or internet, but the reality is, most of us feel disconnected without these conveniences of our modern lives. Personally, I consider Netflix ($8 month) as a necessity to maintain my sanity, so I have it listed under fix expenses, mental health care:)
In truth, the story that follows determined me to write this post and would like to share it with you.
Perhaps I am the only person on Earth experiencing financial difficulties and trying to cut corners, but just in case there are others in similar situations, I am writing about it anyway. If it could help one person, it would be better than none.
Here is the story:
My health insurance premium increased to $582.70 every two month (this constitutes just the “supplement part,” meaning, in addition I also pay $104 monthly.) For me, this is a prohibitive amount and the increase forced me to look into alternatives.
I will not go into the details of how long and convoluted the path to a less expensive premium was, but well worth it. I managed to find a similar plan for $131.30 monthly. I hope the saying, “If it looks too good to be true,” doesn’t apply! If we do the math, this change results in an annual saving of $1,920.60!!! Not too shabby and worth it every second I spent on hold with the insurance companies.
In other words, when writing down your budget, take each FIX EXPENSE and take the time to determine if it could be lowered. Most times, it could.
Other ways you might be able to lower fix expenses:
Check out if based on your income or age you might qualify for a lower rate. If you are over 50, many companies offer discounts (I believe AARP starts giving such discounts after 50) Another example is Verizon, which based on age and disability offers a less expensive rate for your phone. Please check with Verizon, as I am NOT sure of the specific rules and they change often. Please don’t be mad at me if they don’t offer the discounts which I think they do.)
Car insurance is another example of a fix expense which you might be able to lower, depending on the number of miles you drive, the purpose (is it for work, pleasure, both?) number and age of drivers, taking an online good driver exam, etc) You could also lower your premium when you “bundle” and use the same company for your homeowners insurance as well. If you select a higher deductible (what you pay before your insurance company does) would significantly lower your premium, as you assume more risk.
I guess this is all that comes to my mind about lowering fix expenses…
Let’s move to the fun part: Fluctuating expenses!!!
Examples: Food, gas (transportation,) unexpected house or car repairs, eating out, clothing, toiletries (soap, shampoo, tooth paste, skin care products) hair cuts, etc.
In Central Pennsylvania we are lucky to have plenty of farms. Not only could we buy less expensive food, but also fresh and hopefully, pesticide free.
We know the general rule:
The larger quantity of anything, one purchases, the less expensive it is. This rule is excellent for large families. If you are a couple or a single person, you might not be able to eat the large quantity before it spoils. If you buy large quantities, either buy non-perishables, or share with a friend.
Don’t assume that because it’s Walmart, it has the cheapest prices.
For instance, in Central PA, I find that a local chain, Sharp Shopper, carries for CERTAIN items, better and fresher produce. Most areas have such local stores, make sure you compare.
Purchasing gas. Gas could be a major expense we could not avoid, especially in areas where public transportation is non-existent.
We always have choices. One could just pull in the first gas station and fill the tank whenever it’s empty. I am not one of these people, and must confess this is a habit my ex-husband carved in my brain so deeply, I am hopeless: I MUST FIND the cheapest gas!!! This could be good or dangerous, if driving around to find the cheapest gas, you run out of gas, as I did!
Let’s say such an example is not realistic, but what follows, is.
. Some people have Sam’s Club Memberships and qualify for gas (purchased only from Sam’s gas station) which is generally cheaper than the average price of gas, by .05 – .06 cents. The grocery store, Giant, offers a similar deal if one purchases a certain amount of groceries.
Several gas stations in my area, offer similar discounts if one pays in cash. Always make sure you read the small print on the sign.
Another general rule, when shopping make sure you remember to look at the very bottom shelves, as well as the highest.
Use Groupons and coupons and similar services which would save you money.
I am not a coupon clipper and always felt guilty when the cashier at the grocery stores asked: “Any coupons?” and I had to admit I had none!
When companies such as Groupon emerged, my problem was solved at last! Groupon could save you money on just about anything, including travel, massages and haircuts. All you have to do to receive their best offers, is, provide Groupon with your zip code and they would email you the offers in your area. I even use groupons when I travel. If you know well in advance when and where you will be, provide Groupon with the zip code of that specific area, and you will receive pertinent offers. Oh God, I sound like a commercial for Groupon:) Disclaimer: they do not pay me and I do not profit in any way. Just like groupons:))
If after applying all these simple suggestions, one is still behind paying current bills, prioratize what you pay first and always contact the company if you are unable to pay on time. For instance, if you know that your county or borough will turn off your water, pay that bill first. If you are unable to pay the entire amount on anything, contact the company and ask for a payment plan. Generally, it is important to pay your credit cards on time. If you don’t, not only would you incur huge late payment fees, but it may negatively affect your credit history. When you pay a credit card bill, try to pay more than the minimum amount required, as otherwise the interest is so high, it would take you forever and a day to finish paying it.
I just remembered, at the beginning of the post I said “keep it simple,” and this post is already too long.
I hope it helps someone, somewhere in our world and I encourage you to please share with us your saving tips.
Wishing everyone a great weekend. With all the money we saved, let’s treat ourselves to a cone of ice cream. I like Rita’s with or without a groupon. After all, one must have a good reason to save money!