Money-saving tips?

September 15, 2004 7:15 AM

Interested in money-saving tips. (more inside)

My husband and I are trying to stockpile as much savings as we can before we have kids. We’ve reduced our expenses as much as we think we can, but we didn’t live very extravagantly to begin with. We’re not the $4-latte / dinner out every night kind of people.

We’re not in financial trouble by any means - our bills are always paid on time if not early, and we have enough left over for day-to-day spending and emergencies; what we don’t spend gets put into savings. We’re just trying to increase those savings; via cutting costs.

Some info: We both work full time, own two cars (unfortunately necessary due to our town's poor public transportation), and bought a house together last year, which has an uncanny knack of sucking up any extra savings we manage to accrue.

Anyone care to share their favorite cost-cutting methods?

posted by boomchicka to work & money (29 answers total)

Take a month and be fanatical about writing down every little expense. At the end of the month sit down and compare your list to see where the money goes. That will give you a baseline.

Things you can think about:

- Buy groceries and supplies in bulk. Go to one of the warehouses like CostCo or Bj's and get things you will be using. Or better yet join a local cooperative if you have one.

- The house thing is hard. It will suck up all your extra money very easily. The more things you can do for yourself the better, obviously. Consider bartering services if one of you has something to trade, graphic design for painting or what have you.

-Once you've figured out how much money you have to spend- stick to it. One method is to withdraw all the money you've budgeted for the week and place the cash in an envelope. If you're really smart you'll throw away your ATM cards.

-Sell old stuff on Ebay!
posted by jeremias at 7:32 AM on September 15, 2004

Stop paying your bills early, wait until the last second to pay and do so electronically if it can be done at no cost. The interest won't be huge but a penny saved and all that.
posted by Mick at 7:38 AM on September 15, 2004

Don't over-pay your income tax. Make payments just large enough so that you don't incur a penalty and stash the rest away to gain interest until Uncle Sam demands it in April.
posted by Mick at 7:40 AM on September 15, 2004

I'm a fan of cost-cutting where I can. As a about-to-be-graduating college student I'm aiming to stock away some savings for the future and I like to think I'm doing a good job of it. Here's some of the tips I've come up with:

1. Buy the generic brand of plastic baggies, plastic wrap, aluminum foil, etc.
2. Minimize redundent travel. I try to organize my errands around town into a loop so I don't waste gas by backtracking all over the city.
3. When buying media items (book, DVD, video game, etc.) I usually buy from an online retailer. Prices are usually lower online, but of course only buy from reputable vendors. Also consider eBay, but that has a whole other set of rules for caution.
4. Sell old stuff on eBay. Even seemingly worthless stuff can bring in a little extra cash. Just last month I sold some expired 1980 Disney World tickets on eBay to a collector for a few bucks.
5. Set a weekly/monthly spending limit. Allow yourself $X to spend on entertainment/restaurants and don't go over that limit.
6. In general I consider it a good month for saving if I take in more money in a month than I pay out.

I hope these ideas are helpful. They're been working for me.
posted by Servo5678 at 7:42 AM on September 15, 2004

I find it pretty easy to spend whatever money I have, so set up an automatic investment plan that moves money out of your account as soon as it's put into your account. If you can send 100, 200, 500 dollars to a money market account each month -- whatever amount is a little painful but not debilitating, you'll probably find your spending patterns adjust to fit your new reduced budget within a few months.
posted by willnot at 7:48 AM on September 15, 2004

i have, personally, had less success with small economies (e.g., buying in bulk) and more success with lifestyle changes (such as the drawing out cash once a month and then not hitting the ATM again). one thing that really helped a friend of mine who spent too much discretionary income on clothes was disciplining herself to the "nothing new comes in until something old goes out" closet rule. she found she shopped a lot less when she had to give up something to get something.

make sure your savings account is getting the best interest possible (when i switched mine over to the credit union, i started earning quite a bit more) and keep only as much as necessary in the checking account rather than the savings account. you're better off keeping your "in case of emergency" money in the interest-bearing account.

are you absolutely certain you can't get rid of one of the cars? try going for a month using only one of them. it might be easier than you think and the savings in insurance, gas, parking &c is huge.
posted by crush-onastick at 7:49 AM on September 15, 2004

Don't rent movies, check them out from your library. You won't always get the newest stuff and sometimes you might need to get on a list, but I've been watching excellent cinema for a year by doing nothing more than visiting the library.
posted by sciurus at 7:49 AM on September 15, 2004

Boomchicka, first off, congratulations on being as responsible as you seem to be with your finances, and with starting to plan ahead for what you want to be able to do in the future (keep your house, raise a child, retire at some point!). The simple fact that you are thinking about this raises your chances of being able to succeed.

A few thoughts and suggestions…

1. Write down everything you spend. Every single cent. Microsoft Money or Quicken are fantastic for this (I personally use Money). Once a week, sit down with your husband and go over this together. You’re not so much looking for places to cut out expenses (although you’re likely to find these), but just to be aware of how you spend your money. When you see this, and when you realize where all your money is going, you’re very likely to subconsciously cut back in your expenses. Those small expenses start to add up!

2. At some point during the weekend, sit down and figure out everything you’re going to eat for the following week. Make out a complete shopping list for the week, and do all your grocery shopping at once (Sunday evening is great for this!), and buy only what’s on the list. Next, stick with your food plan for the week. This will help you cut down on your food expenses by buying in bulk for some items (a household version of economies of scale) and avoiding impulse buying in the store.

3. Cut down on your disposable income. I know it sounds counterintuitive, but it really isn’t. You can probably find a way to take a piece of your paycheck and put it aside before you even have a chance to spend it. Try going to your bank and opening a basic savings account with an automatic deduction every two week for XXX amount of dollars, based on how much you’re hoping to save. Start small, and work your way up to larger and larger savings as you find ways to reduce your expenses. This money is always available to you if you need it for a REAL emergency, but stays out of your hands so you don’t “accidentally” spend it instead of saving it.

4. The next time you or your husband get a raise, save half of it and spend half of it. For example, if you get a raise that equates to an extra $5,000 a year, increase your automatic savings by $2,500 a year, and you can increase your spending allowance by $2,500 as well. Do this for every raise you get, and your savings will increase very quickly.

5. Realize what’s available online and at a library (if you’re on MeFi, I’m guessing this is probably already a given!). What you can save by borrowing books and movies from the library, or by reading magazines online, can save you a fortune.

6. Hand in hand with #1 above, figure out what your biggest expense areas are (Money or Quicken can help with this, as can annual credit card summary reports that you get from some cards, such as MBNA). If you decide that you want to tighten your belt a bit, this will allow you to target unnecessary expenses. You made a comment about avoiding $4.00 coffees in the morning (which is good, as I think Starbucks is the devil). What most people don’t recognize is that $1.50 for a cup of coffee, each day, adds up. If both you and your husband have one cup a day each at work, that’s $1.50 x 2 people x 250 days of work a year = $750 a year in “inexpensive” coffee expenses. When you look at it that way, kinda makes you want to drink water instead, doesn’t it?

Hope this helps, and good luck!
posted by NotMyselfRightNow at 7:58 AM on September 15, 2004

Now is the time to start canning!

My girlfriend and I are canning fiends, and we're looking at another winter that we don't have to buy vegetables from the grocery store, since we've canned enough pickles, tomatoes, corn, beans, jams, jellies, relishes, chutneys, etc. to last us a long time.

It's a lot of work, but saves money, especially if you can find a local farmer to barter with - they give you the produce free, and you give them half the canned goods.

Also, invest in a chest freezer and buy bulk pork/beef/lamb/chickens. We get organic pork for $1.79/pound and organic beef for $2.89/pound because we don't buy the pre-packaged garbage from the grocery store. These prices are very competitive with non-organic supermarket meat when you consider we're getting steaks, roasts, chops, ground meat, bacon, ribs, etc. for that one low price.

It also saves trips to the grocery store, thus saving you some gas and some money.
posted by rocketman at 7:58 AM on September 15, 2004

Prioritize your house-related spending so that you're only doing the repairs that will end up costing you more money later if you don't fix them.

So, wiring a new outlet can be delayed, while fixing a plumbing leak cannot. A great many small tasks around the house can be done yourselves, which will save a lot of money in labor fees, assuming you take the time to do it properly.

I don't know what part of the country you're in, but saving energy can make a serious difference in your finances:
1) Tighten up your house (weatherstrip, seal cracks, etc.). Most US houses are so leaky it's like having a 4ft hole to the outside in one of your walls (literally).
2) replace all incandescents with well-chosen CFL lights (this will cost more initially, but over the life of the bulb will save you $30-50 per bulb. Somewhere around here I've got a spreadsheet that will automatically calculate savings, if you want it.)
3) install a radiant barrier in your attic, especially if you live in a hot climate.
4) expand your comfort envelope a bit by using heating/AC less.
5) insulate your pipes, esp. the hot water.
6) change your household air filters regularly, and make sure the AC unit (if you have one) has been serviced recently. Similarly, clean the condensing coils on the back of your fridge. In fact, keep the fridge full, as the thermal mass will reduce temp. fluctuations, which means it will run the cooling unit less. If you don't want to keep lots of food in there, a couple gallons of water in jugs will suffice. This will also extend the service life of the fridge compressor.
7) there are some nifty "heat curtain" devices that can be hung on the inside of south-facing windows. They obscure your view somewhat, but in the winter they absorb sunlight and re-radiate it as heat, reducing heating costs without requiring much effort.

...and so on...
posted by aramaic at 8:22 AM on September 15, 2004

I picked up a copy of The Complete Tightwad Gazette by Amy Dacyczyn a year ago and it's been not only great reading but an awesome source of saving-money tips both teeny and large. Plus it really helps you get into the "tightwad" mindset. If you haven't read it yet, you should! =) Among other things, I've been slowly learning how to super-squeeze our food budget and grocery shop well, and also it motivated me to work out just how much money it was costing us to have my husband commute with his kind-of beater car (way too much! - it is actually going to be cheaper for us to pay more for an apartment close to where he works so we can get rid of the car).
posted by Melinika at 8:25 AM on September 15, 2004

Buy the generic brand of plastic baggies, plastic wrap, aluminum foil, etc.

This is extremely good advice, Servo. Another thing to add is pharmacuticals -- generic drugs, generic hair-care products, etc. Figure the average price difference between any generic item of any category (food, kitchen stuff, bathroom stuff, medicine cabinet stuff) is about 25% less than the brand-name version. That's a shitload of money saved each month.

If you smoke, stop. That's a ton of money saved/month.

If you're within a reasonable distance from work (and only you can really judge), consider biking to work. The money saved will be dramatic, though perhaps offset a bit by your increase in deodorant expenses. :)
posted by Civil_Disobedient at 8:26 AM on September 15, 2004

there are some nifty "heat curtain" devices that can be hung on the inside of south-facing windows. They obscure your view somewhat, but in the winter they absorb sunlight and re-radiate it as heat, reducing heating costs without requiring much effort.

watch out for this one...you'll end up with less heat in the house than without them. most sunlight entering your window is absorbed by the floor/furniture anyways, and then the energy is radiated as heat. You can't feel it happening cause they don't get as hot, but the "solar curtains" hanging by your window are re-radiating half of that heat right back out the window because they're so close to the window.

if you want to get a heating boost via solar gain from south-facing windows (north facing if you're in the southern hemisphere), just open your curtains/blinds during the day, and close them at night. even better is if you have some well insulating curtains to prevent heat loss at night. you'll get much more improvement by first sealing cracks and insulating your attic as aramaic suggested
posted by jacobsee at 8:57 AM on September 15, 2004

Great tips.

For penny-pinchers like myself, Clark Howard (www.clarkhoward.com) runs a great website. He's a consumer advocate based out of Atlanta, and a legendary cheapskate!
posted by herc at 9:14 AM on September 15, 2004

When we did the same thing last year, our biggest savings were on our bills.

1) Cable: we very rarely watch TV, so there was no reason to pay $ for extra cable. We now have a cablebill of $14/mo - a savings of $312 over the year.

2) Phone: we used to have a package for unlimited domestic calls for $20/mo (or something like that). We cut our landline to the bare minimum (keep it for internet access) and use our cell phones on nights and weekends instead at no extra cost. Savings over the year: $240.

3) Cell phones: we both have to have cell phones for business purposes, but we got onto the family plan and closely monitor our minutes. Savings over the year: $240.

4) Internet access: I get all my internet needs met at work, and my wife only needs it for emails/occasional browsing, so we went with a bare-bones dial-up for only $10/mo (peoplepc). (This was actually the hardest adjustment because we used to have high-speed access, but since we use it very rarely at home, we can deal with it.) Savings over the year: $300

5) Miscellaneous: we eliminated any magazines we used to subscribe to but never really read anymore, monthly movierentals (sure, netflix is a good deal if you watch tons of movies, but do you really watch that many a month?), basically any monthly non-necessary expenditures. Savings over the year: $200

So just by trimming our bills, we are saving almost $1300/year. Keep in mind that none of this has affected our lifestyle. We still go out to eat occasionally (though we prefer to have people over for dinner instead - more fun and cheaper in the long run), and we still buy the good stuff at the supermarket - organic when we can get it, etc - so we don't feel like we're pinching pennies at all. Which is a really big improvement over feeling like you can't ever have what you want.

Good luck!
posted by widdershins at 9:16 AM on September 15, 2004

Thanks to everyone for your great advice and kind words. I have so much to explore already; I can't wait to put some of these ideas into action.

One area where I would love to analyze my spending is at the grocery store. I really wish the chain grocers would start making customers' purchasing information available electronically. Now that most of them require a membership card to take advantage of sale prices, they certainly have this data. Sure, I can save and review receipts, but it would be SO nice to be able to go on line, pinpoint how we spend grocery money, and then reduce accordingly. Then again, that's exactly what stores don't want, so I guess I shouldn't hold my breath on that one. :)

Keep the suggestions coming; you're all giving me great motivation. Thanks again!
posted by boomchicka at 9:32 AM on September 15, 2004

Oh, and I forgot another biggie: mortgage rates. We are just in the process of buying a townhouse and opted for a 5/1 ARM (we figure we're going to stay there about 5 years) at 5%. This is going to save us thousands a year compared to the 6% fixed rate we were going to get. The amount of equity we're building remains the same - we just give the bank less money in interest. Well worth looking into if you haven't already.
posted by widdershins at 9:34 AM on September 15, 2004

A house can be the biggest drain on one's finances, both in the day-to-day and longer term picture. It's best to separate out those repairs and fix-ups that *need* to be done versus those that are *wants*. Establish a separate account for the wants (hard-wood flooring, extensive renovations, etc.) and contribute regularly every month.

Focus on changes that, while costing a little money up front, may save you money in the long run. Instead of replacing our somewhat inefficient furnace, we had dampers installed (at a comparatively negligible cost to replacing the furnace) that allow us to direct the heating more efficiently. The end result, a lower cost to our heating bills as we're using less heat to achieve the same effect. Replacing the furnace is a longer term goal (and the increased efficiency will pay for itself over time), but just a small change like this has made a world of difference — both in savings and comfort.

Additional savings can come by more careful planning of the renovations you do make. It's best if you can do the changes yourself, however, if you have to hire people to do some of the work for you, you'll save money if you get them to everything at once. If they're installing crown moulding, etc., do it all at once rather than in bits and pieces.
posted by filmgoerjuan at 10:23 AM on September 15, 2004

the "solar curtains" hanging by your window are re-radiating half of that heat right back out the window

A tangent: it's not quite that simple. Standard soda-lime glass is relatively transparent to the thermal radiation offered by the sun, but largely opaque to the longer wave thermal radiation produced by surfaces within the building (eg: a sofa, the floor, an HDPE solar curtain). This is what makes greenhouses work.

The extent to which interior surfaces reradiate heat depends on a lot of factors, one of which is their reflectivity. A white-painted room will reflect a significant fraction of the sunlight entering rather than converting it to long-wave heat. The point of a solar curtain is to intercept the incoming short-wave radiation (by being very nonreflective & highly emissive) and convert it as efficiently as possible to long-wave radiation, to which the window is opaque, before it can be bounced back out of the room as reflected short-wave radiation. It is, in effect creating a sort of miniature Trombe wall with almost no thermal inertia (this can be a drawback).

Direct radiation out through the glass of a window is typically a fairly small portion of any heat loss. Convection & conduction losses dominate, which is why "superwindows" are such a big deal.
posted by aramaic at 10:28 AM on September 15, 2004

I take the last two or three grocery store receipts with me when I go grocery shopping now. It's a quick way to see if garbage bag prices have gone up or down or whatever, or to compare if a new store is cheaper than your regular store.

Another grocery tip that I thought EVERYONE was aware of, but it stunned my boyfriend when I told him about it: The price on the left side of the price tag on the shelf is the price per pound (or per ounce, or per 100 count -- whatever applies to the style of item). That's the price to look at when comparing items, since some brands have, say, 12 oz jars while others are 14oz. I thought this was really elementary, but if he (a law student!) didn't realize it, maybe it will help someone else, too.
posted by bcwinters at 10:36 AM on September 15, 2004

Per the left hand price thing, make sure you are comparing apples to apples. I noticed on some products, say papertowels, for some it was per 1000 and others it was a different count.
posted by szg8 at 11:39 AM on September 15, 2004

As a new homeowner, I'm in the process of putting our household on a stricter budget, too. One place you might not think to look for savings is utility bills. I managed to reduce our water bill by about 30% by going on a special plan that charges me less for off-peak use. I can easily shift my schedule around to run things like the dishwasher during off-peak times. I have also heard of electric plans where you can limit your costs or spread them out over the whole year for greater predictability. It might also be a good time to evaluate your phone service. Does your plan match your actual calling patterns? Would it be cheaper to go cell-only to take advantage of free long distance and unlimited nights and weekends (for us, it was)...
posted by gokart4xmas at 1:45 PM on September 15, 2004

bcwinters is right about the unit pricing in grocery stores - they don't all have it, but it's a great way to save both money and the mental gymnastics required to figure out if it's cheaper to pay $3.50 for the 500 gram container or $2.85 for the 360 gram container.

Here are some of the principles I use:

- Don't shop for recreation. This means, don't hang out in malls, don't window shop, don't look at catalogues. You may even want to avoid looking at fashion magazines. You'll be a lot happier with what you already have if you don't spend a lot of time looking at pretty, shiny new versions of it. When you do need to go shopping, make a list, and don't buy things that aren't on the list.

- Buy used whenever possible. The one exception to the no shopping rules is thrift shops - you'll be the most successful at thrift shopping if you drop in regularly. But even in thrift stores, shop with a list, and before you buy anything, ask yourself, "If this were a regular price, would I still want it?" I don't know if you have them where you are, but we have Cash Converters in Toronto - a chain pawnshop. These stores are great for electronic items (appliances, computers, sound systems), musical instruments and CDs, and jewellery.

- Be careful not to be too shortsighted when trying to save. I've come to believe it's a bad idea to buy no-name when you're buying appliances of whatever kind. I also don't buy cheap shoes. There are some areas where you just can't cut corners.

- Make and fix things yourself as often as you can. If you don't have the skills, acquire them. Before hiring anything done, do some research and find out if you can (safely!) learn to do it yourself. You can save a lot of money by learning how to mend your clothes, fix a phone jack, install a kitchen backsplash, make picture frames, or reupholster and/or refinish furniture. This summer I bought a wing chair and matching hassock from Goodwill and reupholstered them, and refinished the legs. Total cost: $175. Total cost had I bought the equivalent new: $1500 at the least. It also feels great to know that you've learned to do something new, and that you can always do it again if you need to.

- Definitely hit the library as often as possible. I read 2-3 books a week and shudder to think how poor I would be if I had to buy that many books. Besides the books and the movies someone mentioned, you can get CDs there.
posted by orange swan at 1:56 PM on September 15, 2004

Use less than the recommended amount of cleaner for your dishwasher, laundry, etc. One-half cap-full of cleaner will clean your dishes/clothes just as well as a full-cap.
posted by davidmsc at 4:59 PM on September 15, 2004

Sure, I can save and review receipts, but it would be SO nice to be able to go on line, pinpoint how we spend grocery money, and then reduce accordingly.

Actually, I just did this.

I make up my menus weekly and every Friday we shop for the whole week. When our grocery bill crept up from $110 -- 120. range to the over $150.00 a week, I just sat down with our weekly reciept and listed items by catagories. I was shocked by the beverage catagory. The crystal light, coffee, V-8 juice, orange juice, soda, beer and wine was one of our biggest expenditures, so I made some changes. Also we were spending way too much on cheese.
posted by Secret Life of Gravy at 5:54 PM on September 15, 2004

- Half.com can be one of your best friends. I bought 3 of Suze Orman's current books for under $15 including shipping via Media Mail. In general, I don't buy CDs or books or DVDs anywhere else. I can spend hours browsing for books or music, but I just write down the titles I want and go to half.com to buy the cheapest copy in reasonable condition. And the waiting for the mail is half the fun.

- When you get a CD or DVD you don't like, take it to Swappingtons and trade it for something else.

- Sell stuff on ebay.

- Change to a two (or one) movie plan on Netflix or Greencine instead of a 3 or more movie plan.

- re: grocery shopping. If you choose to have your groceries delivered - through Safeway.com or Albertsons.com - I believe you can track the products and prices from previous orders. This service may not be available in your area, and there is usually a delivery fee (which may be reduced if you increase your delivery time window), but if that's what you want, it may be worth it to you.

It's possible to be on a tight budget and still not feel deprived.
posted by bendy at 5:55 PM on September 15, 2004

More tips:

- Think carefully before throwing things out. Could it be fixed? Could it be renovated and used for something else? Could you sell it? Could you use the item more sparingly so it would last longer? Do you have a friend or relative who would be happy to get the item? Whenever I clean out my closet, I bag up the better items and give them to my teenaged nieces, who fight over who gets what - and whatever they don't want goes to Goodwill. Finding a good home for the things you don't want helps others save money and gets them in the habit of thinking of others whenever they have things to throw out. A friend of mine recently gave me an extra coffeemaker she had sitting around.

- Conversely, before you buy anything, look carefully at what you already have and think about whether it could be made to serve your needs. Also, think about whether you could borrow or rent an item rather than buying it.
posted by orange swan at 5:39 AM on September 16, 2004

If you're going to have children, budget your time now, as well. Take that Adult Ed. class on home repair, paint the living room, whetever. Babies are time-intensive, and it's more fun if you have time to enjoy them.

The 2nd-hand thriftshop habit works really well for baby stuff. You don't need a lot of what's advertised, and the stuff you do need can be bought used. Obviously, check the safety. Start paying attention to your friends with kids, cause they'll be the ones loaning you a highchair, baby monitor, etc.
posted by theora55 at 5:32 PM on September 16, 2004

Thrift shops are great for kids' and baby clothes, because the little sprogs grow so quickly. You'll find Baby Gap and OshKosh stuff that's in great condition and is still in style.
posted by orange swan at 7:33 PM on September 16, 2004