How I cut my expenses may provide some insight how to save money. Some people would call me cheap! Others may say I am frugal! I think of myself as value conscious! I hate to spend more money for something than I need to. My approach may cause you to rethink how you spend your money! Find out how you can live on less without feeling deprived!
Million dollar skills
Whether you are earning minimum wage or a million dollars a year, you spend money. How you spend your money will either earn you more or cost you a great deal. I have always been around rich successful people including my own parents. My neighbors were rich, my friends were rich and even a few relatives were rich. I think I learned from the best how to get more from my money and become successful. I wrote an article called “Successful vs. Unsuccessful People” which illustrates some of the traits I learned.
About seventeen (17) years ago, we downsized from a five (5) bedroom, three (3) bath home to a two bedroom and den townhouse. We rented out our home for three (3) years so we could test out townhouse living. During that time, we decided to buy a townhouse, but waited a year to sell the house. We bought during a buyer’s market and sold during a seller’s market. We went from a large home on a view lot with a swimming pool on a country club to a very nice townhouse with tennis courts, pool and Jacuzzi in a gated community. I cut my expenses in half!
My goal is always to pay less for things. How can I lower my utility bills? The first thing I did was change to a cold water wash. We use gas for hot water, heating and cooking. Just using a cold water wash saved nearly 33%! To save money on heating/cooling, I use a setback thermostat. In the winter, I set the thermostat at 68 degrees when we are home. I lower it to 65 degrees during the day and while we sleep. In the summer, I set it at 78 degrees during the day and 75 degrees when we are home. Generally we can turn off the air conditioning in the evening. During the summer, we barbecue which keeps the house cooler. To lower the electricity, I replaced all the light bulbs with CFLs. My utilities costs are between $75-85 per month summer and winter which includes about $25 of sanitation/sewer charges costs.
Groceries can be a big part of many people’s budget. First, my wife creates weekly menus and a list when she goes shopping. We buy all our household and personal items at Target and use their credit card so we receive an additional 5% (immediate) rebate. Avoiding buying these products at the supermarket saves a lot of money. My wife buys her produce at a produce market which offers the lowest prices. I buy chicken, flank steak and some other items at Costco. Our monthly groceries range $250-275 per month. Avoiding prepared foods, sticking with the basics and even adjusting your menu can keep your costs down. Leftovers make ideal lunches too!
Since many people are refinancing their mortgage or may buy a new home, I will talk about my experience with mortgages. I refinanced my mortgage about twelve (12) years ago. I changed from a 30 year fixed rate mortgage to a 15 year fixed rate mortgage. A lot of people are doing this now! What I did is negotiate with my bank to reduce the closing costs. Since I have good credit and could go anywhere, I negotiated with my bank to drop many of the fees. The result was a 5%, 15 year mortgage without most of the fees. That was quite an accomplishment twelve years ago.
Many of us spend a good portion of their budget on insurance. I am no different. I am very fortunate to have good medical, dental and vision care insurance for my wife and myself through work at no cost to me. Don’t get envious; I am a teacher that has not had an increase in many years. I used the internet to shop term life insurance about eight (8) years ago. About three (3) years ago, I found the least expensive automobile insurance company on the internet. When I shopped them, no one could match the rates. When I shopped homeowner’s insurance, I looked for a company that provides earthquake coverage. I live in earthquake country and survived the Northridge earthquake! I think the California Plan is expensive and inadequate. It is a national rated AAA company, I found by searching for customer satisfaction ratings online. I saved several hundred dollars on my automobile policy, but used some of the savings to increase my coverage. I was able to increase my coverage for my homeowner’s policy for the same cost.
Before you think that all I do is stay home and do nothing. We go to the movies once or twice a month using group discount tickets ($6 each) with friends, go out for dinner twice a week ($45 for 2, weekend total) and travel to faraway (New York & overseas) places. Almost all the restaurants, we frequent have loyalty programs and/or on my dining network for frequent flier miles. We use our credit card for everything to accumulate frequent flier miles (first or business class) for overseas trips. Vacations are exotic, but cost less thanks to those miles. Last year, I started to accumulate miles for hotel stays and even used my bonus for a long weekend at the beach! A few years ago, we went to New Orleans for Spring break. A couple years ago, we went to Vancouver to visit relatives.
Simply, slashing expenses is painful and difficult to maintain! My approach is to maintain the same product, service or lifestyle for less! I remember seeing my mother negotiate with a builder; she kept telling him what she wanted. He kept saying no, guess who won? She always got what she wanted and I do too. Lowering your expenses require good problem solving skills, persistence and determination. These are some of the ways to have more with less.
I have become an online shopper! I use the internet to find the lowest prices and the convenience of free shipping. If I cannot save at least 30+%, I wait for a sale. I recently bought some bicycling gear for an average of a forty (40%) percent discount delivered to my home. It helped that I was just replacing some worn out gear. I knew what I wanted and there were no sizing problems. What are you doing to cut your expenses? This is how I cut my expenses.
Photo by: Flickr