Like I have written before, it isn’t something I could have done long term (I went for a month) but there were quite a few take-away lessons I learned about budgeting that I can share with you, that you can start doing TODAY to keep a little extra money in your pocket.
The easiest changes are always the ones that impact you the least. Things that don’t feel like you are actually sacrificing anything. So today I am sharing:
1. Make a few phone calls
Often we tend to get in the rut of “Bills come in, money goes out..” and we don’t actually stand back and look at exactly what that money is going towards. Often we are spending more than we really need to because we have never ASKED to pay less.
A few examples of services that tend to be negotiable (especially the longer you have been a reliable customer) are:
Cable/Satellite: Especially once you are out of your contract, TV providers tend to be more than happy to roll you into a new ‘deal’ to keep your loyalty.
Cell Phone: Are you using the best plan for you? Is it possible to bundle or downgrade? If you aren’t maxing out your minutes, why are you paying for them?
Internet: As more companies are adding high-speed internet service to various parts of the country, the competition is on. Call around and make sure you are only paying for what you use and need.
Auto/Home/Life Insurance: The longer you have gone without an accident or as young drivers get older rates should go down. Insurance companies may not give you those discounts unless you ask.
Investments: Have you evaluated your fees and costs of things like your 401(k) and mutual funds? The internet is a plethora of information about the costs associated with investments, and unless you have a proven reason to pay for the high fees, you may want to try to negotiate with your brokerage company.
2. Watch the grass grow
This is one of my favorite tips because it actually means LESS WORK and MORE MONEY. Who doesn’t love that?
If you have a lawn, raise your lawnmower up a few notches and allow it to grow longer and cut it less frequently. How will this save you any money? Longer grass tends to need less water since sunlight doesn’t dry out the soil as quickly. Less water means less irrigation. You also can leave grass trimmings on the lawn, instead of bagging them, to help retain soil moisture (as long as your thatch later doesn’t get too thick.)
Additionally, by cutting your grass long and less frequently, you are using less gas to power your lawnmower. Cha-ching!
3. Use a Credit Card that Helps Pay Your Credit Card Bill
(I’m recommending American Express)
I am a loyal American Express Card Holder. I actually applied for my first Amex when I joined Costco (another great money saving tip), because that is the only type of credit card they will accept. But now I use my American Express regularly at lots of retailers, not just Costco.
The reason is because Amex has a program which allows you to save offers to your card, and when you make purchases at participating retailers and restaurants (Such as Dollar Tree, JC Penny, Bed Bath & Beyond and The Cheesecake Factory) you are automatically issued a credit on your bill. The program is called AmexOffers. If you are going to be spending money, you may as well be earning rewards!
4. Stop Flushing Cash Down the Drain
Unless you have installed high efficiency toilets, chances are you are using way more water than you need to with every flush. The simplest way to save water with every flush is to just add a brick or two to the back of your toilet tank. The water it displaces is water you aren’t wasting.
If you are really committed, you can replace your toilets with Water Sense ones or a dual flush model (which is the most water efficient type of toilet on the market when used properly.) If you don’t want to replace the toilet itself, there are extremely affordable dual flush conversion kits which allow you to use different amounts of water for solid versus liquid waste.
Other water conserving measures are low flow shower heads and even a simple change to your faucet aerator. (Here is a detailed tutorial on how I replaced my faucet aerators.)
5. Pretend there are 13 months in the year
If you have a mortgage payment, you have probably been hit up by a flyer in the mail telling you that “So-n-so Company can chop 5-8 years off your mortgage.” Typically they propose paying one extra mortgage payment a year, in order to accomplish this. Instead of paying a full payment once month, you pay a half payment every 2 weeks and it ‘feels’ the same since a month is APPROXIMATELY 4 weeks.
Why it works is that you are actually paying the equivalent of 13 monthly payments instead of 12 (paying every 2 weeks results in 26 (HALF) payments over 52 weeks.) You have a full month's worth of principal being paid. Contrary to popular misconception you typically actually save any interest by paying bi-weekly since your two monthly bi-weekly payments are usually held to the end of the month anyhow. The 5-8 years is solely a result of principal pay down by having two extra payments made annually.
The problem with this method is often your mortgage company will charge you a fee to set up biweekly payments. A much better way of executing these savings is to calculate what an extra month’s payment would be spread out over 12 months. So if you mortgage is $1200/month, you would divide $1200 by 12, and the resulting $100 is what you should add to each monthly payment (for a total of $1300.)
So now, instead of paying $1200x12 months, or $14,400/annually you would be paying $1300x12 months, or $15,600/annually, which is the exact equivalent of 13 monthly $1200 payments.
The beauty of this method is that it is entirely FREE to setup, and you can stop paying the extra at any time. If you commit to biweekly payments, you lose that flexibility. Just make sure you check with your mortgage company to make sure you don’t have a loan pre-payment penalty or other reason to not increase the amount of money going towards your loan principal.
So there you have it. 5 simple ways that you can find more money without sacrificing lifestyle or feeling deprived. Some require a little work up front, but once you make these minor changes, the return on your investment of time just keeps going.