Some tips for saving money
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I met with some family friends today, at their request, to do a simple financial and debt analysis and come up with some ideas on how they could save money month to month.
Here's the list they left with:
- Don't get tricked by Irregular Pay Periods - If one spouse is paid "every other Weds" and one is paid on the 1st and the 15th, pick one schedule to go with. For example, take the every other Weds paycheck and deposit it into a separate account and "pay yourself" on the 1st and the 15th.
- Be aware of Irregular Bills - Have an interest bearing account where you pay a "simulated monthly bill" (much like a mortgage escrow account behaves) that builds up until the yearly/biyearly payment comes out.
- Turn off everything in the house (as if you were on a trip) - When you go out for a long trip you likely prepare the house by turning things off. Why not do this all the time and work out a system where minimal things are on while you're at work? LCD or not, your computer monitor is a big light bulb. Forget screen savers, just turn it off.
- Save for Property Taxes Monthly - In Oregon, Yearly Property Taxes tend to sneak up on folks. Save for those taxes, and everything irregular, in a regular way like your paycheck. Money in, money out, same every month, makes for a predictable lifestyle.
- Call the Electric Company – Some electric companies give out Coupons for High Efficiency Lighting (fluorescent). Call yours.
- Library Book/Videos Box near the Front Door - Don't pay late fees. Leave a shoebox near the door you leave from. Make it a habit to put things like library books and rental videos in that box and take them with you as you walk out.
- Minimize Cell Phone Time - Somehow you survived the 80s and 90s without a cell phone. Save $75 a month or more by getting the plan that is the cheapest and hang up while driving.
- Check Tire Pressure Weekly - Get a tire pressure gauge, or better yet, check your pressure everytime you fill up. Good tire pressure can get you another 5 MPG or more.
- Know not just your Car's Mileage but your Dollars Per Mile - How much does it cost you to drive a mile? Is it 80 cents to the video store to rent a two dollar video? Maybe you should walk, or ride a bike.
- Fill up, write down ODO. Drive. Fill up, write down ODO. Take Miles Driven and divide by Gallons. That is your Miles Per Gallon. Then take the price of a gallon of gas and divide by your Miles Per Gallon. That’s how much it costs to drive one mile.
- Consolidate Trips - If you're out, get all your errands done in one trip. Avoid the "hub and spoke" model of returning home and heading out.
- Cancel the local paper delivery - You pay for Internet, use it.
- Cut Coupons and avoid waste - Bread lasts longest tightly bound in its bag, in the dark. Put Fruit in a paper sack in your fridge. Close lids.
- Consolidate Insurance - Is your home and car insurance with different companies? You might get a discount if you consolidate.
- Store Credit Cards are Satan - Cut up and close Store Cards. Call your existing Credit Cards and ask them if they can lower your rate. If they want your business, they will. Otherwise, leave them.
- Know how your Cash Flows monthly - Monthly is usually the way to go if you're paid monthly or on the 1st and 15th. If not, find a boundary that works for you and get your life's inputs and outputs into a simple CASHIN-CASHOUT=SOMELEFTOVERCASH equation. Then, take the left over cash and save it. Take your checkbook down to some agreed upon number. We always "level off" to $300. Then next month you'll get a paycheck(s) and pay bills. Take the SOMELEFTOVERCASH-$300 and save it. Rinse, Repeat.
It was a fun evening and everyone left feeling a little more empowered and prepared to take action. If not these actions, some action.
About Scott
Scott Hanselman is a former professor, former Chief Architect in finance, now speaker, consultant, father, diabetic, and Microsoft employee. He is a failed stand-up comic, a cornrower, and a book author.
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July 14, 2006 10:36
Do you turn your computer off at night?
Haacked
All very good suggestions. There are better ones, though, in "The Only Investment Guide You'll Ever Need" - an entertaining and very to-the-point book that's been constantly reprinted for 20 years or more, and updated frequently. Although the title has "investment", and they DO talk about investments, it's only a part of financial health, which is what the book is all about.
Don't believe me - read the reviews on Amazon.
Here's a taste: "Earning 177% on Bulk Purchases" (http://www.andrewtobias.com/bkoldcolumns/980901.html).
Don't believe me - read the reviews on Amazon.
Here's a taste: "Earning 177% on Bulk Purchases" (http://www.andrewtobias.com/bkoldcolumns/980901.html).
Check back tomorrow as Scott blogs about cold fusion and how you too can power your whole house with just a sigle glass of water.
Is there anything you don't know or don't have time to blog about. ;)
Is there anything you don't know or don't have time to blog about. ;)
RE Store Credit Cards
I have 1 or 2 of them, because I regularly shop there, and they give me a discount... The problem stated above doesn't bother me beacuse of a HUGE tip I'm about to give you
PAY YOUR CREDIT CARDS IN FULL, EVERY MONTH
and don't spend money on your cards you don't have! I treat my cards like cash - they are a 15 day (average) float, where I don't pay a withdrawl fee (like most ATMs), that gives me a cash back reward. The Credit card companies probably hate me.. If you never pay them monry, and they pay YOU...
I have 1 or 2 of them, because I regularly shop there, and they give me a discount... The problem stated above doesn't bother me beacuse of a HUGE tip I'm about to give you
PAY YOUR CREDIT CARDS IN FULL, EVERY MONTH
and don't spend money on your cards you don't have! I treat my cards like cash - they are a 15 day (average) float, where I don't pay a withdrawl fee (like most ATMs), that gives me a cash back reward. The Credit card companies probably hate me.. If you never pay them monry, and they pay YOU...
"Cancel the local paper delivery"
Personally, I think OregonLive.com just sucks if it's considered an electronic replacement for The Oregonian. I don't like the layout, the organization.. almost everything.
Check if your company has the paper in the lunch room. Read it there and save money.
Being a developer, and between reading blogs, emails and browsing the net, I spend more than enough hours infront of a monitor. So whenever I can get a paper equivalent for information, I am old fashioned. I still like to read print on ink on paper. That's why I don't care for eBooks, audio books, pdf's and epaper stuff.
Using coupons from the paper would pay for the paper. (doing the equivalent on the net and printing coupons is a hassle)
abdu
Personally, I think OregonLive.com just sucks if it's considered an electronic replacement for The Oregonian. I don't like the layout, the organization.. almost everything.
Check if your company has the paper in the lunch room. Read it there and save money.
Being a developer, and between reading blogs, emails and browsing the net, I spend more than enough hours infront of a monitor. So whenever I can get a paper equivalent for information, I am old fashioned. I still like to read print on ink on paper. That's why I don't care for eBooks, audio books, pdf's and epaper stuff.
Using coupons from the paper would pay for the paper. (doing the equivalent on the net and printing coupons is a hassle)
abdu
I have another one for you
STAY AWAY FROM FRYS
They should just put a big sign over the door: "Bank - deposits only"
STAY AWAY FROM FRYS
They should just put a big sign over the door: "Bank - deposits only"
Turn off everything in the house (as if you were on a trip) - Also, unless someone is always/almost always there, buy and use a setback thermostat. Unfortunately, in my 3 adult household, our schedules are different enough that there is someone home pretty much all the time.
Minimize Cell Phone Time - Unless you have one or more teenagers at home, do exactly the opposite...Maximize Cell Phone Time and get rid of your landline. We did this a year ago when we realized our landline bill had gone up ~20% in 7 months and we only got a few calls a month on the landline. We were paying over $50/month for our landline. Why so much? We had all the telemarketer-blocking options available. Very effective, but very expensive. With our cell phones, we get no telemarketing and calls between the three of us are free and we have unlimited long distance after 19:00 weekdays and all day on the weekends. In the past year, we only exceeded our pool of included minutes once and that was by less than $10.
Cancel the local paper delivery - In addition to what others have said, you forgot the most important part of the paper - THE COMICS! On a more serious side, I have yet to find a local newspaper web site that covers local issues as well as the physical paper does.
Minimize Cell Phone Time - Unless you have one or more teenagers at home, do exactly the opposite...Maximize Cell Phone Time and get rid of your landline. We did this a year ago when we realized our landline bill had gone up ~20% in 7 months and we only got a few calls a month on the landline. We were paying over $50/month for our landline. Why so much? We had all the telemarketer-blocking options available. Very effective, but very expensive. With our cell phones, we get no telemarketing and calls between the three of us are free and we have unlimited long distance after 19:00 weekdays and all day on the weekends. In the past year, we only exceeded our pool of included minutes once and that was by less than $10.
Cancel the local paper delivery - In addition to what others have said, you forgot the most important part of the paper - THE COMICS! On a more serious side, I have yet to find a local newspaper web site that covers local issues as well as the physical paper does.
Scott:
When calculating "Dollars Per Mile" don't forget that Capital Expenditure (cost of the vehicle), maintenance, and insurance all play into cost per mile. It's interesting that people will drive several miles out of the way to save 5 cents a gallon at a different gas station. On a 20 gallon fillup in a minivan, that's only an extra dollar spread over 400 miles that's about a quarter of a cent.
But what about that monthly payment? Consider buying a cheaper used car and making payments to yourself for 3-5 years and then buy the nicer car with cash and avoid paying the finance couple double or triple the value of your car. As an example, a new sedan-style with payments runs for $.50-.75 a mile all things considered, but the same model 5 years older bought used can get down to $.10-.15!
When calculating "Dollars Per Mile" don't forget that Capital Expenditure (cost of the vehicle), maintenance, and insurance all play into cost per mile. It's interesting that people will drive several miles out of the way to save 5 cents a gallon at a different gas station. On a 20 gallon fillup in a minivan, that's only an extra dollar spread over 400 miles that's about a quarter of a cent.
But what about that monthly payment? Consider buying a cheaper used car and making payments to yourself for 3-5 years and then buy the nicer car with cash and avoid paying the finance couple double or triple the value of your car. As an example, a new sedan-style with payments runs for $.50-.75 a mile all things considered, but the same model 5 years older bought used can get down to $.10-.15!
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