What could you do to save money?

[Danoff]

Here's the equation, it's really simple:

income - expenses = savings

I came to the realization that many people focus entirely too much on the first portion of that equation. Lots of people spend their entire lives (pun intended) concerned only with bolstering their income while never considering their expenses.

So here's an exercise I hope will be informative and useful to everyone.

What could you be doing right now to save money?

It could be little, like wash your own car instead of paying other people to do it, or use a library instead of barns & noble for books.

I spend a lot of time thinking about this - so I think my budget is pretty lean as it is, but I can still think of a few things:


1) Contribute to my 401k in 2006 - that's a big one for me... saves in taxes.
2) Drink less soda (hey, that's good from a calories point of view too)
3) Use birthdays, Christmas, etc. for practical items instead of buying them ahead of time.
4) Limit myself to one meal-per-week at a restaurant

That last one is one that I set out to do a year or so ago and have recently been violating. I need to get back on that.

So, can you think of anything you'd be willing to do to save some cash?

 

[Swift]

• Drive Slower - Saves gas
• Buy/Rent less movies and games - Those late fees will kill ya!
• Cancel Cable - If you really need the news, go online
• Turn the thermostat to 70 degrees. in most houses that saves energy in winter and summer.
• Avoid impulse buying - Self-explanatory.

 

[ceiling_fan]

Another good one is stopping smoking. I heard a pack a day is a $1500 per year habit.

 

[Famine]

Kill my girlfriend and hide the body.

 

[Der Alta]

Quit Drinking.

 

[Dave A]

Indeed.

Live in a smaller house, have only one car instead of two, use the PC less, though that'd probably cost me more than I'd save in electric.

Eat out less, go to the pub less, burn the missues credit cards. Usual stuff.

 

[Sage]

I think about this a lot too – I’m notorious among my friends for being a penny-pincher. (Do you know any other high school student who carries coupons with him?)

Some things I (and my family) already do (most of them similar to Dan’s):

• Eat out only on special special occasions (we literally eat out like three times a year)
• We give each other practical gifts during the holidays – e.g., my mom got me a battery charger and Crest Whitestrips for Christmas
• Buy computery stuff at an educational discount
• No soda
• We don’t have A/C
• Don’t drive like a bat out of hell
• And my favorite: I drive until I’m almost out of gas, because my theory is that if you do this, you’re spending more time driving with a lighter car (as opposed to filling up the car when it’s at half tank), thus increasing mileage

I’m not sure if there’s anything I can do to save more money (I can list a whole bunch of things my parents should be doing – I wish they’d sell a lot of their crap that they don’t need). Only thing I can think of is that when I upgrade my software, I’ll just buy Fireworks instead of the whole Studio package.

I already have plans on how I’m going to save money when I’m out on my own (I think about this stuff a lot!) – buy the smallest house I can get, run the A/C only when the temps are unbearable (I live just fine right now without A/C, and it gets to be upwards of 120° here), buy the cheapest “fun cars” I can get (and maybe CPO), one computer in the house, minimum number of furniture, I’ll try to do no TV (see how much stuff I can get from the Internet), etc.

 

[Pupik]

• Buy/Rent less movies and games - Those late fees will kill ya!

My local library has lots of DVDs to borrow. They have a three day limit, but let's face it, unless it's a long movie, how many times have you watched the movie a day or two after you rented it? Probably never, unless it's a trilogy. You forget about them, and that leads to late fees.

Drink more water, although it's far cheaper to purify (if need be) your own. Take a drink with you, it's always cheaper in the supermarket than if you go to a machine or a convienence mart.

Coupon cutting! Although don't buy something unless you need it, a lot of impulse buying comes from coupons.

Buy less frozen foods, and more fresh foods. Better for you, and cheaper, you'll see.

Check over that auto insurance policy. A lot of under-21-year-olds get this on their policy, but they can't rent cars anyhow. You might have to ask next time to get it excluded.

Credit card companies that promise to "pay your bill if you're injured/sick/broke" or "if it's stolen" tack on a monthly fee. It's usually a scam, they only pay the monthly minimum or the interest only, I've been told. Your credit card company has a policy on theft that comes to the card holder's rescue anyhow. You can usually opt-out of these plans at any time.

Tell that bum who has nicer shoes and better cologne than I have to go get a job.

How many video games do you buy? Couldn't you just borrow them, instead of rebting or buying them (besides, we know GT is the best, anyhow...don't waster your time)...

Buying everything in bulk isn't always a money-saver; places like Costco et al are great impulse-buying places.

Wait 6 months for the latest technology to drop in price.

Just a few suggestions.

 

[SRV2LOW4ME]

I'm with Famine here. The girlfriend is trying to spend my money faster then I make it, and the way I see it, it'd be cheaper to have her taken out then stay with her for another month. And maybe after all the smoke clears, and she's long forgotten, i'll try to quit smoking...maybe...

 

[Danoff]

I’m not sure if there’s anything I can do to save more money (I can list a whole bunch of things my parents should be doing – I wish they’d sell a lot of their crap that they don’t need)..

Do feel free to share. I wish my parents would put a storage shed on their land and move their crap out of pay-storage.

 

[Sage]

Heh, funny you mention that, because my dad just finished building a storage shed. The way I see it, we shouldn’t have so much crap that we need a storage shed. The main problem is my mom – she’s a crazy impulse buyer. If anything’s on sale or she has a coupon for it, she’ll buy it. Defeats the whole damn purpose of saving money. She’s also a lead-foot, which doesn’t help gas mileage.

My dad’s a little better (not an impulse buyer), although he basically refuses to use coupons or wait for a sale. He also spent a fortune building that shed – he built it like a house.

Oops, I have more to say, but the bell just rang. I’ll get back to this thread tonight.

 

[FoolKiller]

Well, as a graduate of Dave Ramsey's Financial Peace University course I have a few good tips:

1) Payoff whatever debt you have as quick as possible and don't have any more. Interest rates just mean you are paying extra for something. Home loans are the only exception. You can have one, but work at paying it off as quickly as possible.
2) Get rid of ALL credit cards. Debit cards are okay, but dangerous.
3) Learn the difference between want and need (clothes, food, shelter).
4) Always pay in cash. It has a psychological effect on you and the seller.
5) ALWAYS haggle a price. Even department stores will negotiate, especially if you show the cash. Their minds shut down.

Now, from my own personal experience:

1) Always buy used books/movies/games/music if you must have them. I never buy new. The money you save will by a disc repair kit in no time.
2) I bought my latest PC through a wholesale auction site. The same model was selling on Sony's site for twice as much.
3) Cook at home. The price of one meal out will by you enough groceries to fix a meal where leftovers will last all week. (There is nothing wrong with leftovers.)
4) On big-ticket items research and walk in with your research in hand. Salesmen have trouble screwing you if you have a hardcopy proving them wrong.
5) Be patient. You will find "it" at the price you want. It will just take time.

In the end just budget. You will find room for fun expenses. Take the fun money out in cash and after that you are finished until next month. The cash thing works for everything. You should have envelopes for every item in your budget and those envelopes should hold the cash for the budgeted amount. It becomes hard to "accidentally" spend too much.

 

[Danoff]

Allow me to play devil's advocate for a moment:

Well, as a graduate of Dave Ramsey's Financial Peace University course I have a few good tips:

1) Payoff whatever debt you have as quick as possible and don't have any more. Interest rates just mean you are paying extra for something. Home loans are the only exception. You can have one, but work at paying it off as quickly as possible.

But is it really better to try to pay it off as quickly as possible? Or should you invest the money you'd have put into the home - since you can deduct home mortgage interest.

2) Get rid of ALL credit cards. Debit cards are okay, but dangerous.

But isn't it better to have credit cards and just pay them off every month? For example, I use discover as much as humanly possible. It saves me 1% on everything I buy, and since I never (no seriously, never) run a balance - I come out ahead and I build credit.

4) Always pay in cash. It has a psychological effect on you and the seller.

See above about the credit card.

1) Always buy used books/movies/games/music if you must have them. I never buy new. The money you save will by a disc repair kit in no time.

How do those work in your experience? Do they save the disc?

4) On big-ticket items research and walk in with your research in hand. Salesmen have trouble screwing you if you have a hardcopy proving them wrong.

I think this worked really well for me when I bought my last car.

 

[Mark T]

Here's a few things that I've done to save money.

- When I go to the gym I take my own water instead of buying there bottles
- Changed my broadband provider and saved £10 a month
- Pay for small items on a card rather than taklng out £10 and spending the whole lot
- If I'm going out to clubs I buy cheap beer from an off license and drink before I go out
- If I go clubbing, I usually phone the club and pretend it's a birthday. Get free entry & a free drink
- Opened an ISA savings account, took out a 9 month interest free credit card and placed the money in the savings account. Made around £150 interest then paid off the card with the money in the account.

 

[FoolKiller]

But is it really better to try to pay it off as quickly as possible? Or should you invest the money you'd have put into the home - since you can deduct home mortgage interest.

But isn't it better to have credit cards and just pay them off every month? For example, I use discover as much as humanly possible. It saves me 1% on everything I buy, and since I never (no seriously, never) run a balance - I come out ahead and I build credit.

See above about the credit card.

I tried these same arguments but it is hard to argue against the emergency situation. If you lose a job for some reason you still have these bills to pay with the interest. The unforseen is hard to plan for and having as little running expense as possible is the best plan.

It may be great to deduct mortagae from taxes, but if the entire house payment is being invested you will make more money over time. The home loan is an exception to the debt issue for the investment reason. You pay it off as quickly as possible while building asavings. All other debt should be paid off first, lowest amount first-largest amount last.

As for paying off the credit cards all the time you never know when something will cause you to not do that. At the same time you can just consider yourself as paying your debt off as you accrue it. You can never assume that your current financial state will be the same down the road though. Stuff happens and the next thing you know you are staring at a bill you can't pay. I have a personal policy of never spending money that I don't have, even if it is just borrowing from the credit card company until the bill comes in.

I guess I just subscribe to the never a borrower nor a lender be philosophy.

As for always paying in cash, you will never risk going over your budget because your total alloted amount is in your hand. It took me a while to get used to this idea but I almost never impulse buy now. Also, when was the last time you got an appliance knocked down in price by showing the store manager the $300 you intended to spend either at his store or the one across the street? For some reason cash just makes eyes light up and brains shut down. I also found 100% down on a car gets that price down real quick.

These are all the Financial Peace stuff and I can't explain it well, but I have seen the math and it works out for long-term investing and saving. I would be more skeptical if I had to buy anything extra from him, but I don't.

In the end it is just all about living within your means and not getting any unnecessary debts or expenses.

How do those work in your experience? Do they save the disc?

Only had to use it once and it worked fine. I have a Half Priced Books store by work and they only buy good wuality items and then mark it all down to half the original price or more. I bought a $25 hardcover book for $5. I bought a set of Humphrey Bogart old-time radio dramas (I like them) still in the shrink wrap for $10 when they go for $35. I have gotten DVDs for $5-$10.

I think this worked really well for me when I bought my last car.

I also like the tactic of only saying, "that's not good enough," without making a counter offer until they absolutely refuse to go down any more. They have no clue how to handle you, think you are strange, and just want to get you moved on.

 

[TB]

But isn't it better to have credit cards and just pay them off every month? For example, I use discover as much as humanly possible. It saves me 1% on everything I buy, and since I never (no seriously, never) run a balance - I come out ahead and I build credit.

We do the exact same thing. We've had 2 service charges in 7 years - they wrote both of them off because they weren't our fault (one was just after 9/11 when the mail was running like a dog).

Don't do what my in laws are doing. They were bankrupt twice in the last 5 years. They got out of the first one by selling their shop and moving the business into their garage. They tanked again, he got a job working for someone else and they sold the business. Now they are going on a trip to Europe with the money from selling the business. Complete idiots. They stayed at our house for 6 weeks while the looked for an apartment. Amazingly, they found one within 24 hours of us telling them they had 2 days and they were gone (we originally agreed they could stay for 2 weeks). We will never help them out like that again. You have to help yourself before I'll take care of you.

 

[Swift]

Don't do what my in laws are doing. They were bankrupt twice in the last 5 years. They got out of the first one by selling their shop and moving the business into their garage. They tanked again, he got a job working for someone else and they sold the business. Now they are going on a trip to Europe with the money from selling the business. Complete idiots. They stayed at our house for 6 weeks while the looked for an apartment. Amazingly, they found one within 24 hours of us telling them they had 2 days and they were gone (we originally agreed they could stay for 2 weeks). We will never help them out like that again. You have to help yourself before I'll take care of you.

That IS radically stupid. Man, I guess some people just don't learn huh?

 

[jammyozzy]

These are things I'm doing or trying to do:

- Stop playing pay-monthly MMO's. (I'm trying to beat my Planetside addiction )
- Put all the loose change I have lying around together, repeat every fortnight.
- Stuck a picture of something I'm saving for in the lid of my money box. Is buying x worth more time without y?
- Stop being so greedy when buying lunch. Too many Creme Eggs.

 

[TB]

Kind of along the same line - if you have kids, start a 529 plan (in the US, anyway) for them. We started with $1000 and have been adding $100/month for 18 months. So far, there is around $3200 saved up for college for my 2 year old. We'll be starting one for our other son very soon and plan on upping the $100/month to $200/month each when our school loans are paid off.

Not so much saving as planning ahead.

 

[Duke]

We are in-betweeners. We buy a lot of stuff - probably too much - but at the same time we have a pretty good idea of what things are worth, and we just won't pay more than that. We have adopted many of the ideas above, but some we are just not willing or reasonably able to. Here are some of the highlights off the top:

• 10% off the top goes straigh to 401(k) for both of us. If you never see it, you'll never miss it - in fact I'm thinking about going to 15%, but maybe not right now. We also take advantage of Employer Matching programs, as well as Flexible Spending Accounts. FSAs let us set aside money for child care and health/dental expenses before income tax. Then we reimburse ourselves from that FSA, and the lack of income tax means that each dollar we spend buys $1.25 or so in services.
  
• Never carry a balance on our credit card. We pay it off in full every month, and thanks to cash back, we do in fact move most of our purchases through our credit account. This generates us "free" $150 gift cards several times a year, and does wonders for our credit rating. Also, since we always pay off, and we try desperately to never be late, we get really good interest rates just in case the worst happens and we do have to carry a blance. Our card now has an annual rate of ~5% and it gives us at least 1% back in cash.
  
• We make all major appliance purchases using "X days same as cash" deals, then budget a monthly payment to guarantee we pay it off in the allotted time frame. This lets us stretch the purchase cost out without incurring any interest or finance charges.
  
• We're doubling the principal amount on our mortgage every month. This is the best of both worlds. During the first half of the mortgage, almost all your payment goes to the interest and only a little goes to the principal balance, so doubling the principal amount is easy. We can write that interest off our taxes now. The more principal you pay off early, the more quickly you can close out the loan, by chopping payments off the back end of the term. In the late years, the payment is almost all principal and hardly any interest, so the deductible amount of interest you're losing is minimal, and your minimizing the overall interest total by paying the loan off early.
  
• We buy moderately-priced cars and we keep them along time, we don't buy brand-new models, and we consider used cars before new. Between 1998 and 2003 we owned 4 cars at the same time and carried no car payment, thus no interest. A couple of accidents put a dent in that plan, but we've so far bought good-value cars to replace them. The new TSX was a splurge but it was a great value, it's fun to drive and luxurious enough, and it will hold value and last. We both actively enjoy driving enough that we are willing to indulge ourselves a little here.
  
• We rarely go on vacation; at least not long, far trips. We've gone on 3 in the last 10 years or so, and one of those was half-paid by a contest.
  
• We don't buy much in the way of expensive clothes. The most expensive item I own is my only suit, which was $200. Nothing else I ever wear cost more than $30.
  
• We don't buy cutting edge technology or toys. Wait 6 months for the first revision, at least. The price/quality curve is totally against you otherwise.

One thing we do tend to do is eat out a lot - like 52 times as much as Sage . But that's a conscious decision based on our schedule. With both of us working full time, 2 kids in karate class 3-4 times a week, and being involved in 2 Scout troops, something has to give. That thing is dinner. However, we always box the leftovers, and they go to school and work as lunches the next day.

Overall we try not to spend money like water, but we indulge ourselves in areas that we truly enjoy and maximize the enjoyment we get from those "wasted" dollars.

My brother-in-law is 60, a professional engineer, and makes a very good salary. He's also a total piker. He won't spend a dime he doesn't have to. He's got a collection of video cassettes he records (and re-re-records) himself off the air; they're so worn out the picture quality sucks. He's getting his brother to copy their crappy old LPs to CD.

He drives POS cars he buys used, runs for a year, and ditches. He's the only person I know who has a beater to keep miles off of his "good" car - the "good" car is a plain jane 1995 Legacy wagon, 2WD, which gives you an idea about the beaters.

To me that kind of economy is not worth it. Sure, he could probably buy my house for cash... but so what? Is he enjopying the fruits of his labor? I wouldn't be, if I lived like the way he does.

 

[TB]

We make all major appliance purchases using "X days same as cash" deals, then budget a monthly payment to guarantee we pay it off in the allotted time frame. This lets us stretch the purchase cost out without incurring any interest or finance charges.

We have money in savings for emergency situations (water heater blowing up, washing machine pulling an Old Faithful, etc.) Then there is no need to wait for "X days same as cash" deal.

We're doubling the principal amount on our mortgage every month.

That one is huge. I completely forgot about it. That'll slice 5+ years off of a 30 year mortgage.

We buy moderately-priced cars and we keep them along time.

When we bought our new car ('05 Honda Pilot), we got a great deal. They tried to sneak some stuff by us (etch, etc) and then my son started screaming. The loan manager couldn't get us out of his office fast enough.

 

[kyle]

Not too much right at the moment, but still I am a spendophobe.

 

[Duke]

We have money in savings for emergency situations (water heater blowing up, washing machine pulling an Old Faithful, etc.) Then there is no need to wait for "X days same as cash" deal.

Oh, we've got money aside for plenty of emergencies. But if somebody will lend it to us for free, why not?

I remember talking with a coworker who was buying her second (or maybe third) house, having traded up every few years. She said, "I've never left a closing meeting with more than $250 in the bank."

I looked at her like she was insane. I told her I'd never left a closing meeting with less than my first three mortgage payments in the bank.

 

[Raghavan]

Buy used stuff.
Buy clothes (except shoes) at Walmart
Turn all of the lights off except in the room you're in.
Don't go out anywhere to eat.
Buy a clunker car with good mpg
buy a bike so you don't have to use said car
no a/c
no heater
don't get married and have kids
no credit cards - just pay with cash, don't have to worry about bills
pirate all DVD movies and games so you get em for free
resist buying computer hardware

I'd do all this to save money, and i plan to, too, so i can pay off my house and car and stuff (when i actually start my own life)

 

[Sage]

pirate all DVD movies and games so you get em for free

Methinks Dan was referring to moral ways to save money.

 

[Raghavan]

Methinks Dan was referring to moral ways to save money.

Ok, scrap that then.

 

[Solid Lifters]

We pay a lot per month on electricity, so first, that can be reduced. With my desktop PC, wife's laptop, kids PC, my entertainment center, four fridges, two freezers (suck electricity like a Hoover), kids TV with DVD players, tape players, hallway and room lights on all day ... ALL constantly on, so it's easy to see why we spend nearly $300 month on it.

Next, food. We spend a lot for the good stuff. I could survive on bologna samiches, cold cereal and ramen noodles, on occasion. We have a milk man, meat man and a vegetable/fruit man that come to our house. They ain't cheap, but we get the stuff better than you can get in the store. Plus, they know what we like, and constantly bring it to us without asking. I like to cook, and I like making whatever, no matter how expensive it might be. We spend about $250 a week on food. Yikes!

I suppose we could get a smaller DirecTV package. But, $100 bucks a month, to say $55 bucks a month just might not be worth it.

Get a slower internet connection, but that only saves $10 bucks a month, and I ain't going back to dial up, even if I was broke.

Sell the cars, and drive something cheaper, and keep them longer than three to five years. Don't get them detailed as much. Go to a normal car wash, and wax it myself.

Stop spoiling my two boys. They get, usually, whatever they want, provided I felt they earned it.

Tell the wife to budget her clothes and shoe spending. She makes her own, too, and it's still isn't enough. She also has a thing for old expensive furniture, that I just don't understand.

Stop buying so many guns, ammo and... nah...

Sell the crap we don't need or use, instead of give it away. We've got a lot of crap, and not-so-crap, that we never use. No need to keep it. But, we never sell it. We end up just giving it away.

To be honest, we don't have that many expenses. The house is costly, but we're keeping it no matter what.

 

[niky]

Hmmm...

-What I do:

I already buy the cheapest clothes I can. I only buy new stuff if I need it for office work.

I've found a good shoe brand that's unknown here and doesn't sell. I get them for 1/4 original price.

I don't buy very many video games or DVDs... heck, last video game I bought was GT4.

I try to do as many things in one drive as possible.

I don't spend on very many things... maybe 2-3 magazines a month.

We use the AC maybe just once a week.

We don't use much electricity, everything's always off.

-What I don't:

I still eat out too much. Damn, I'm getting fat. Wife can't cook regularly just yet (recovering from pregnancy, caring for baby)

I still drive too fast...

 

[X-Othermic]

Stop buying so many PS2/PC games.
Get myself a job so i can actually earn money in the first place!!
Only things really at the moment.

 

[Danny]

I could stop living an extravagant jetset lifestyle.