How to Save Money And Still Live Versus Exist

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.

Food–

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!

Buying a New Home!!! What To Look For, What To Avoid

Writing this post was triggered by my checking out real estate values in my neighborhood. In all honesty, I wanted to see if my house’s value went up, down or was the same.

Zillow generally over-estimates values, but I went on it knowingly… http://www.zillow.com. Why?  The only excuse I have is that perhaps it is nice to see your home valued $10,000 more than  what you know you’d get if it were to sell it.

Then, after I was re-assured Zillow was continuing to over-estimate my house, I started checking other homes and values and discovered that some were listed in “pre-foreclosure…”  What does that mean? I wondered. I still don’t know for sure, but searched “What could cause foreclosure?” and came up with some very useful information.

I continue to have as the main purpose of my blog sharing information we could use in our daily lives,  and did MORE research and came up with more than  an answer to my initial search question.

Here it is!!!

What to check before you buy a new home. 

Most of us know the obvious: Do you have enough money to afford a down payment and the mortgage? Is the neighborhood safe? If you have children or plan on having kids, is the School District good?

In the heat of the moment, some of us fail to think of the following:

How much are the utilities? Does the house have a new roof and a new heater? Even if you buy a remodeled house, a leaky roof will “leak” your budget faster than you have enough money to fix the roof.

If you have pets. What are the township’s rules? How many dogs/cats are you allowed to have?

Check the costs of  homeowners, car and HEALTH insurance in the area you plan to move. They vary from area to area in the same state.

What do you need, yes NEED in terms of services:

A good health care system which is reasonably close in space

A good mechanic/shop to service your car

A reliable pharmacy to have good prices and reasonable hours.

A hair dresser/barber

A community to feel comfortable and welcomed.  A church,  Temple, Community Center, Al Anon,  AA or Narc Anonymous meetings in the area. Of course good neighbors.

The best time to check the safety of a neighborhood is to drive through it at night. Also, check the local newspaper’s Crime Section, The Police log.

Now… you bought your new home. You made sure the roof didn’t leak and you drove through neighborhood at night. All is great!

Time to pay your property taxes! They could be in escrow and just as your home insurance,  paid together with your mortgage. It is probably the best way to ensure it is all paid in a timely manner.

However, let’s say you opted to pay your  property taxes separate from your mortgage because you are responsible.  Did you know that if you pay your mortgage but not your property taxes the mortgage lender has the right to foreclose to protect their investment? I didn’t know that but this is the case according to http://www.homeguides.sfgate.com/can-property-tax-lien-cause-foreclosure

What are tax liens (same source as above)

They are debt attached to real estate when income and property taxes are unpaid. That means lien holders have a financial claim on the property.

When a home is bought the amount due is paid at closing from the homeowners equity. If the lien is not paid another action may be taken. In some states the new buyer may opt to inherit the debt (tax lien) and agree to pay it in a set period of time and pay more interest on the amount owed. These are called tax certificates, and if not paid in a timely manner foreclosure may be requested by the holder of the lien. This varies from state to state. In California for instance, instead of tax certificates there are levies placed against a property, which gives the taxing body ownership of the property. The time-frames of such actions vary from state to state.

Do I know what “pre foreclosure” means? No, I don’t but now I know I MUST pay both my mortgage and also the real estate taxes as the consequences of not paying are equally bad.

In my searches I came across some web sites that you might find of interest. Here they are:

http://www.veteransunited.com  Helps veterans buy a FIRST home

http://www.pennsylvaniadebtrelief.com  —

saletax.avalara.com

Happy searching for a new home and Happy 2015!