- Personal Finance
Saving Money When There's Nothing Left to Cut
I've Read All the Saving Money Tips, But...
When the tips you see all the time just don't seem to apply to your situation, or you really feel there are no other places to cut, you can still save money.
In many cases, it amounts to mere penny-pinching, but pennies add up to dimes which add up to dollars.
The most common advice you'll read online has to do with giving up things like purchased coffee drinks, making your own lattes and mochas instead. That's all well and good, and at the price of such beverages in the coffee houses,it is a valid savings.
However, suppose you have already cut such luxuries from your lifestyle; you're already brown-bagging it to work instead of buying lunch. There just doesn't seem to be many more places you can squeeze more from your hard-earned dollars.
Ah, but there are!
Pretend You Were Raised Yankee
I was. Even though a California native, both my parents were from New England, and both lived through the first great Depression. (Yes, I said first!! We are in, and have been in a depression for some time; the politicians simply do not want to call it what it is, and insist on saying 'recession' instead!)
Here is the Yankee motto:
"Use it up; wear it out; make it do, or do without."
The last part is the hardest for this modern, spoiled-rotten generation in which we and our children and grandchildren live, to deal with. "Do without." Today's kids need to learn what the word "no" means, and as parents and grandparents, we need to learn to say that two-letter word far more often.
We, and our children, have become far too accustomed to instant gratification. The pull-out-the-plastic shopping method removes the awareness of our income level, and allows us to spend ourselves into mountains of debt faster than you can sneeze.
Do An Experiment
For one solid month, put away the credit cards. All of them. Pretend you do not have any. Put them away someplace where they will be really inconvenient to get to, such as in your bank safe-deposit box.
Now, look at your expenses for day-to-day necessities. This includes food, utility bills, all the normal things related to running a household. It includes necessary replacement of worn-out shoes, but it does not include special-brand shoes for no better reason than prestige, because "everyone else" has them. Too bad. Don't be everyone else. Be yourself!
Necessary expenses include household phone service, and, if you are running a home business, probably also a fax/computer line. Not included are unlimited text and Internet plans on a cell phone. Kill the cell phone habit altogether, or at least kill off all the extras. There is nothing, absolutely nothing, on this planet so all-fired important that either you or your kids need to spend 24 hours a day with a cell phone glued to your hand, talking and/or texting. What about emergencies, you say? A $20 pay-as-you-go phone will fill that niche nicely.
In short, you must live for the entire month of this experiment as if you have no credit cards at all. If you do not have enough cash or money in the bank after your necessary bills are paid, you don't buy whatever item it is you want, because you simply cannot afford it. That is your actual economic reality. The credit cards are a dangerous buffer, blinding you to your actual income level, and they create a steep slope to disaster.
Frugality and New Skills
How to live like a real Yankee: fix it!
You may be used to tossing a pair of socks because a hole got worn in the toe or heel. That is wasteful because there is probably nothing wrong with the rest of the sock. New socks cost money--remember, this is cash money you may not have during this experiment.
Your grandmother, and possibly even your mother, engaged in a practice called "darning socks." It is not difficult, and can even be therapeutic, soothing your financial soul as you sit patching in the hole while it is still small, and saving the socks.
Oh, I almost forgot--if the sock is too far gone to save, keep it! They make great dustrags, for free! Don't buy special-purpose disposable dusting "cloths." Use old socks or old torn undies-- (nothing with hooks or snaps, though)--and wash them with the rest of the laundry. Ch-ching! More dollars stay in your pocket!
Zipper broken on your pants? Many dry-cleaners will replace zippers and do other minor alterations on clothing, for those who do not have the sewing skills to do so themselves. It may cost you $15 or so, but that comes under the necessary clothing maintenance, and is far cheaper than new pants.
Or, if you have a friend or neighbor who is a sewing whiz, perhaps you could trade services with her; she mends your pants while you pull weeds from her pet flower garden (for example). It's called bartering, and it used to be a way of life. Maybe, in this economy, it's time for a revival of bartering.
But the Kids Will Scream
Oh, well. Let them scream. They will survive, and learn something in the process. Instead of allowing them to participate in the blinding, dazzling have-it-all world of the dangerous, imaginary wealth of credit cards, let them see exactly what your take-home pay is. Let them do the math.
Younger children may whine, throw tantrums, etc. when first told "no, we cannot afford that today." Make the statement, stick to it, and ignore the tantrum. Slightly older children, who have learned addition and subtraction, can be given the task of finding the cheaper brand in the grocery store, for example. They may even get a kick out of "helping."
Middle School and High School kids are plenty old enough to be made privy to the actual income. Allow them to see all the bills and the take-home, and have them plan a no-credit-cards-allowed budget, and see where they can come up with cuts. There are calculators online that can show you how much extra you are really paying for that "adorable outfit" that was "on sale for 20% off," once the credit-card interest is figured in.
If the the kids helped, and with that eye-opener in place, there is less likely to be grumping about it. The older ones may even get motivated to seek out a job after school for their own extras.
As the saying goes, "just say no," and set an example by saying it to yourself as well. Keep a log of how much you are saving. Denied yourself lunch out? Write down how much it would have cost. Stuck to your guns telling the kid they could not have a new skateboard? Write down the cost. At the end of the month, add it all up, and you'll be quite amazed at how much money you've saved.
Now, it may not be actual money in your pocket, because you've been paying by cash or check for everything instead of using plastic. But, adding up that amount that has not been tacked onto your (probably already large) credit-card debt, and accruing interest, should be quite a motivator to change your habits permanently.
The Car Trap
Finding A Less Expensive Car
Learning the difference between what we want and what we actually need is crucial to saving money. It applies to the adults, as well, and possibly nowhere more significant than in shopping for a replacement car. We may want a brand-new, envy-of-the-neighbors state-of-the-art SUV, (for example), but do we need it? Chances are excellent that the truly honest answer is a simple "no."
Buying new cars is a great way to throw perfectly good money down the drain. The instant the tires roll off the dealer's lot, that fancy new car loses 10% - 20% (depending on make and model) of its value. Buy a newer-model used vehicle instead. Someone else has already taken that depreciation hit.
And no, buying a used car does not necessarily mean taking on someone else's problems. Shop carefully, do research on the resale values, both through private parties and dealers, and go in armed with a firm price in mind. Be fully prepared to turn and walk out the door if the dealer won't work with your price.
Available as newer model used cars are returns from leases (check the mileage, and ask about warranty certification); also, some rental agencies sell off newer models from their fleets. Again, ask about warranties and mileage. If all you need is to get to the store and appointments, you can do well with these. While they do get a lot of mileage, and driven by many different drivers, it is in the rental company's best interest to keep their fleet well-maintained.
Also, check for dealer demos. These are likely as not to be current model-year vehicles that were used by the dealer for short test drives. They may have fewer than five-thousand miles on them, but because they have been off the lot and driven around, they can no longer be sold as new. That depreciation hit has been removed.
How Many Cars Do You Really Need?
While we're talking about driving, don't forget to examine whether or not you actually need more than one vehicile, or if it is merely a convenience. Are you paying gas and insurance for your kids to have a car to drive? Stop. Sell the extra vehicles. Kids generally do not appreciate what is just given to them. Let them know they are free to have a car for their exclusive use again when they have a job and can buy their own car, gas and insurance. Until then, walk, ride your bike or take a bus. It won't kill them. Honest.
Do both of you work in opposite directions? Find out the cost of public transportation, and compare it to the cost of maintenance, gas and insurance on your cars. If public transit or a carpool is a workable option, sell off the second car. If you honestly and truly must have a separate vehicle for each adult, keep them well-serviced to avoid costly repairs and towing for breakdowns, and improve your gas mileage.
For example, we do have both a car and a truck. I must have the truck for picking up raw materials for my business, as the load weight (1-½ tons) is far too much for our small compact car to handle. It simply would not fit inside, the weight burden is well over the car's capacity, and also over the tow-load capacity, so even a trailer is not an option. So, we leave the truck sit until we need to pick up supplies, and use the car for daily errands, as it gets better gas mileage than the truck. Last year was not a good year for the business, and we could not afford the registration on both vehicles, so we let the car sit, and licensed only the truck, which we had to have for the business. It was a rough year at the gas pump!
A Few Other Tricks
A "must have" that's really an extra you can't afford? Try swap meets or flea markets to sell off some of your items no longer used or really needed. It's a good way to get rid of cast-offs and make a little extra cash on the side. This works for video games, household décor, outgrown bikes, duplicate or triplicate tools, and so fort
Teens and "Must-Haves"
Kiddo just has to have a glamorous dress for the prom? Let her earn money by babysitting or other service chores, for at least part of the money. Then, check out second-hand stores, clothing consignment shops and the like. True, it won't be a 'brand new dress,' but it will be nearly new, often only worn once for just such a special night out. It will be "new to her," and I can pretty much guarantee that she won't suffer the "horror" of ending up with the same dress as her arch rival.
Many consignment shops specialize in formal wear, and their items are professionally prepared for resale. These clothes can be anything from prom dresses, bridesmaid's dresses (also good for prom wear), and even an evening gown worn one time for dinner with the captain while on a cruise ship.
Grocery Brand Names
Don't be a "brand-name snob" in the grocery store. Read labels, and compare ingredients. 90% of the generic or 'house-brands' of basic foodstuffs like soup, tomato sauce, biscuit mix and so forth, contain identical ingredients, and you really cannot tell the difference in taste.
You may think you can, but in a blind taste-test, no, you would not know. Besides, many times, the name-brand companies are producing the house-brand labels on the same production lines.
The same goes for milk. Given the same type of milk, whether whole, 2%, 1% or skim, they are truly alike save for the prices. Buy the cheaper brands, and you may save enough to splurge on some ice cream!
What about "couponing?" Well, let's just say I remain skeptical. Most coupons these days come with specific limitations prohibiting "doubling" and other such devices that used to be popular. Also, in my experience, the house brands are still cheaper, even after taking into account the 'cents off' from the coupon.
Coupons serve one purpose, and one purpose only: to insure brand loyalty. You'll notice you rarely, if ever, find coupons offered for store brands. If they were truly interested in saving you money, the prices of their products would be in line with those of the store brands
Watering the Yard
Watering the yard. You can even save on your water bill. Any of us who have ever lived through a drought can tell how to save using so much water. I won't go into the "navy" shower routine, as that is one thing I refuse to do. However, while waiting for the water to get hot, run it into a bucket instead of down the drain, and use to water your plants. After it has sat for 24 hours, the chlorine has evaporated out, making it even better for the plants than straight tap water!
This one won't work for everyone, but if it will, you're ahead of the game. During the last bad drought, a friend of mine hooked up the drain hose from her washing machine to a garden hose, and ran it out to the yard to water her ground cover. At the end of the garden hose was a soaker hose, with some larger-than-normal holes poked in it.
The ground cover got watered, and she used the same water twice, saving money. This is "gray water," not "black water," so there is no health risk for watering ornamentals this way. Because there is some phosphorus from the soap, it makes a good fertilizer, but not for use on edibles or delicate plantings. It's just one more little trick than can save a few bucks here and there.
Watch Out For False Economies
Don't indulge in false economy. That means those little traps that would seem to save you money, but end up costing more in the long run. A perfect example can be found with toilet tissue. You know, the chintzy kind you find in public restrooms, where they serve such a volume of people that they try to save money by buying the very cheapest tissue they can find.
Ultimately, this backfires, because it is so thin that at least twice as much as usual is needed to get the job done, so there are really no savings at all; more money is spent replacing product more often. So when it comes to that kind of product, buy the one you like and that works best for your family. It will be cheaper over the long term.
Now, it is up to you. Come up with your own tricks to find ways to add those pennies into dollars. We have yet to be as personally bad off as stories I recall my mom telling, of having to use cardboard inserts in their shoes because they could not afford to have them repaired, but we're not that far away, either.
I was raised with that 'save it; it may be useful' mentality, and I take recycling to heart, so here's one final tip: don't throw the money-back cans and bottles into the city trash pick-up or recycling collection. Save them separately, and cash them in yourself!