By John
These days we are all looking for ways to make our hard-earned dollars stretch a little further. Cutting the big-ticket items is obviously something you will already have considered – for instance, moving to a new house, forgetting the new car or boat, or taking less extravagant vacations. Now you are probably looking for ways to trim your living costs. Even modest changes to your day-to-day spending habits will save an appreciable amount of money without affecting your quality of life, and a determined effort can save you literally thousands of dollars a year.
So, how can I save more money?
Step No 1: Arrive at a budget
The first step is to arrive at a budget. Take away the fixed annual items of expenditure, like insurance premiums, from your total annual income; then take away the fixed monthly items of expenditure, like cable, internet and TV, from what’s left, and now you have the amount of your disposable income. But hang on! Who says those items are “fixed”? If you are still wondering how to save more money, here’s Step 2.
Step No 2: Find ways to spend less
You need to take a long look at those “fixed” items. The gym and other club memberships, for instance. Do you really need them? And if you decide you do, can you not get a cheaper type of membership that better reflects your schedule? Many things are negotiable in these competitive times. There are many ways too of getting discounts on auto, home and other insurance premiums – for instance, by bundling them together with one provider. Perhaps your circumstances have changed since you took out your auto policy – say, your son has left home – can you not adjust the collision waiver amount? All those “fixed”items need to be queried. You will end up spending less.
The same goes for the “fixed” monthly items too. Bundling all your TV, cable, internet and cellphone packages will produce significant savings. You should consider carefully which mobile data plan works for you – are you predominantly a texter, or chatterer, or mobile surfer, or a mix of all of them. Get a plan that fits your usage patterns. Maybe you can drop the landline altogether if all your family members own cells? Are you getting the best deal from your utilities company?
Having hopefully reduced the outlay on all the fixed items you can now deduct the total from your income leaving you with your disposable income, which gives you your budget.
Here are more ways to save money and spending less.
Step No 3
Before apportioning your budget, you must know what you have been spending your money on in the past, which is why keeping records is important. A sensible approach at this stage is to set yourself a goal of cutting say 10% off each of the major components of expenditure – utilities, food and groceries, transportation, and entertainment. Next you should look at each of those areas of expenditure and identify what is unimportant and can be cut out, and what is important but can be reduced. Through a combination of using less and smart shopping, you will Spend Less And Save MORE.
Step No Four
How to apply this lesson? Using less when combined with wasting less can save a remarkable amount of money on utilities: fix leaks of heating and air-conditioning from your house by insulating the roof, sealing doors, windows and other cracks, and fix leaking faucets at once. Switch off lights in empty rooms. Maximize the use of programmable thermostats to control heating and cooling, and motion sensors to control outdoor lighting. Switch to CFL light bulbs. Turn off running water when shaving, brushing your teeth and lathering. Use a bucket when washing the car. Using conscientious economy a saving of 10% on your utilities bill is not hard to achieve.
With food and groceries the emphasis is more on smart shopping. Always shop with a list. Knowing your prices is key, so that you know when something is a bargain. Go online to research good deals. Clip coupons – some people report regularly saving 50% on their grocery bills through using coupons. Hunt down sale items and discounts and use store loyalty cards. Buy generic goods not brand names. Buy stores’ own products. Buy non-perishables in bulk or big packages. Go to the butcher’s for meat, and the bakery for bread. Save a dollar here and a dollar there – it all adds up.
Don’t buy prepared foods – make your own lunches and snacks. Make your own coffee at home and take it with you.
On transportation you can make sure your car is in good operating condition, and have it regularly serviced. Do basic maintenance yourself. Buy spare parts yourself for the mechanic to fix. Seek out best gas deals online. Make less trips, especially for shopping. Drive conservatively.
On entertainment you can spend less by eating out less, renting movies instead of going to the theater, using the library for books and more. Spending less in this area will affect your lifestyle, of course, but saving $60 or $70 by not eating out just one less time in a month sounds a pretty good way to help you achieve your goal.
Using this Four step approach will help you to spend less and save more. And as the savings mount up, make them work for you by opening an interest-bearing deposit account.
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