A few years ago, I was “stupid” broke. I say “stupid” because the reason for my lack of funds had nothing to do with serious things, like medical bills or job loss. I was broke because of very bad decisions when it came to saving money.
I was contemplating a job change, and considering committing a serious money sin: cashing out a 401(k) just to have the money to bail myself out of my own mistakes. I did the research, found out why this can be a bad idea, and rolled over the account into another retirement plan and found another job. I also took a hard look at my money lifestyle.
Here are 26 things I changed to save money.
I chose a very low-tech method to start the process: a pad of paper and pen. I labeled the paper with the letters of the alphabet, A to Z, from top to bottom. And I forced myself to find twenty-six ways to change my money-saving mindset.
- Write out a budget. It does not need to be done to the penny. It does need to be something you can see on paper. Before you can deal with the dollar demons, you have to confront them, and figure out where the money is going.
- You’re using coupons, buying BOGOs and applying for those product refunds, no matter how small the savings. But did you ever consider saving your savings? Take the amount you save (you can see the amount at the bottom of your register tape) and stash it in a special account. I did, and the amount is over $16,000 over eight years so far. This is the set of papers I was referring to above; And I’m still keeping a running tab.
- Buy higher-quality goods in order to cut back on your wants and needs. That may not sound like you are saving money, but you will replace less often if you buy well-made items in the first place.
- Know when consumer goods are at their best price. Each month of the year brings special savings.
- Learn these five “Rs”: Recycle Reuse, Repair, Replenish and Resell. Make Craigslist and Freecycle your go-to places before you go to the mall. If you cannot keep it, find someone who will pay for it or trade for something you need. Learn some simple fix-it skills. The toilet doesn’t have to run, the sink doesn’t have to leak and grout is easy to re-caulk. You Tube has thousands of how-to repair videos.
- Would you be OK with less of something routine? If you get manicures and pedicures weekly, how about bi-weekly and keep saving money?
- End the midweek fast-food pickup stops. Shop for groceries, make a weekly menu based on what you bought, and stick with it. Those I’m-too-tired-too-cook-tonight-takeouts are hazardous for your health and your wallet.
- Watch for sales and don’t wait until you’ve run out of something you use every day. Buy at a discount and add it to your stash. Having what you need on hand saves you time and money later.
- If you have a retirement savings plan in place, such as an IRA or 401(k), make sure you are contributing as much money as you can. This saves you money on your taxes in the short run, and you can’t spend now what you can’t access now.
- If you use prescription medications, ask your doctor about generics, or call your health plan and find out if a mail order service is available. Both can mean saving money.
- If you love to spend money for holiday gifts, start a holiday fund. Some banks and credit unions still offer what used to be known as a Christmas Club account; my credit union calls it a Holiday Fund. The money goes in when I want it to, but it cannot come out until early November without a penalty.
- Keep your car tuned up and cleaned up. Regular maintenance on the exterior and interior, oil changes and checking the tires for air pressure and wear seems like nickle-and-dime stuff, but it prevents expensive problems later.
- Empty your wallet of change every day and save the money until the end of the year. Many banks offer change-counting machines free to account holders, so you won’t have to roll your coins. I’ve been doing this for a few years, and end up with around $125.00 each year.
- Track your spending with budgeting software. Better Budgeting has free worksheets you can download and print. Mint is a free online service you can use on any computer or mobile device to track your money.
- Take a good look at your smartphone and decide if you have enough apps. The free ones are fine. But how many game apps, exercise apps, calendar apps, etc., do you need to pay for? They’re cheap when you consider them one at a time. But they add up over time, and if you don’t use them, you’re not saving money.
- Run full washer and dishwasher loads. This saves money by saving water as well as the environment.
- Combine errands in a single car trip. Think about your daily route; if going from points A to B to C involves any backtracking, you are not saving money by wasting gas and time.
- We love to spoil our pets, but saving money can extend to Fido and Fluffy. If you feed your four-legged family premium or specialized pet food, check with your vet to see if there is a bulk-buying source available.
- Small families or couples sometimes won’t consider warehouse stores, because they cannot use or store such large quantities. If you want to shop there but don’t have the storage space, share the purchases (and cost) with another family.
- When comparing food costs: know that it’s unit price that matters. Sometimes, a sale really is a sale. And sometimes, it’s a means to get you to buy something you normally wouldn’t.
- If you have several credit cards to pay off, it’s not just what you owe, but the interest rate. Resolve to pay off the high interest rate cards first; it’s the fees that keep you from saving money by consuming your bank account.
- If you have cable/Internet/phone with one company, call the company and ask for a better rate, even if you’ve been a longtime customer. There is competition out there, and let them know you are shopping around for a new provider. if your service is spread out over multiple providers, see if bundling with one provider saves money.
- Shop around for car insurance, especially if you have a good driving record. Insurance companies love good drivers!
- Look at the memberships and long-term purchases that cost you money: the gym, golf club, tennis club, pool, theater, dance lessons and other forms of exercise and entertainment. Do you really use them enough to merit a year-round payment, or could you do with buying just those experiences that you can actually use?
- Many retail stores offer free signups for their loyalty programs. I use several, for grocery and drug stores. I like them because the savings gained (close to $800 a year for just one drugstore) is worth it.
- On the other hand, a number of specialty clothing stores try to lure you into signing up for their store credit card, offering the promise of a discount on what you are buying that day. Just say “No, thanks” to this. There’s no saving money, between the high interest rates and small rewards (which, unlike unaffiliated cards, can only be used at that store).
- Don’t forget quarterly, semi-annual or annual costs, such as long-term health care payments, auto tags, dental cleanings, homeowner’s insurance, the property tax bill – all those repeating, but not monthly items. Saving money means making sure you can fund these items out of your regular budget.