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Transforming Your Financial Future :: Part II






10 Ways To Save Money & Reduce Spending

Disclaimer: Some of you are going to strongly dislike some of these ideas. You are going to think I'm ridiculous. But then the part of you that really wants financial freedom will know that I'm right. Now is the time to make these sacrifices. If you truly want to get out of debt, you have to stop spending money on nonsense. And here's the super cool part, once you become debt free, you can slowly add the nonsense that you enjoy back into your budget. Cutting things out of your life does not have to be a forever thing in this case. Who knows though, once you remove some of these things for a period of time, you might not miss them as much as you think you will.

1. Don't Pay For Cable TV (Sorry cousins!)

I wasn't going to put that one first, because I know some of you will completely stop reading now. But let's be honest, cable TV IS NOT A NECESSITY. For you football fans, now is the perfect time to cut out this luxury. You have about 5 months until pre-season. That's 5 months to apply your $100+ cable TV bill toward your debt. If you really can't live without it, you can get it hooked back up at that point. But let me tell you, there are other places you can watch football. A friend or family member's house, The RAM or other Pub/Sports Bar, or some cell phone companies even allow you to live stream to your phone. If it's not football, but your favorite sitcom or drama you can't live without, I'm sure you can get hooked on another show through Hulu or Netflix. Those two options are considerably less expensive than cable. Or if you'd like a free option, check out a book at your local library. GASP! I guarantee your imagination can create some pretty awesome "shows" in your mind. Or another great option to fill this entertainment void, spending time with your friends and family. You know, play games, go to the park, go on a bike ride, or complete a project around the house together. Hey! This no cable thing could actually be a weight loss program too!

2. Get Rid of Your Home Phone

Most of you probably don't have a home phone, but for those of you that do, evaluate the reason that you have one. If it's because you "bundled to save," I would like to point out that if you are spending money on something that you don't use or need, you are not actually saving money. For most people, a cell phone meets all of the needs of a landline, plus much more.

3. Have Your Insurance Re-Quoted

Whether you only have automobile insurance, or you have renters, homeowners, boat, motorcycle, etc. Get it all re-quoted. I'm all about being loyal to companies that have provided awesome customer service in the past, so give your current company and agency a chance to reduce your rates, but just like anything else you would shop around for, call a few other companies as well to give them a chance to earn your business. I recently called around for a "Landlord" Insurance policy. One company tried to sell me on an annual policy of $1,300, while another company quoted me at $450 annually for the same property. We have established relationships with both companies. The first quote was almost 300% more expensive than the second. That's just crazy. If you're in the Pierce County area, I'm going to go ahead and put in a plug for Horizon Insurance in Downtown Puyallup. We have enjoyed working with them. They are a brokerage, so they can gather quotes from multiple companies and present you with the best options through the companies they represent. The only thing this costs you is time, and from my example above, it could save you $1,000 annually. Get your insurance re-quoted friends.

4. Go Down to 1 Family Vehicle

This won't work for everyone based on your work life situation, but it is something that my hubby and I were able to do for a time. When we got into our debt mess, we had 3 vehicles totaling $1,200 in payments every month. Out of the three vehicles, we owned one free and clear. Going down to one vehicle was NOT an easy choice for us. We both really enjoyed our vehicles. They were the first brand new vehicles we had ever purchased. But if you want to have financial freedom, you have to be willing to get rid of the things that are holding you back. We sold my SUV for what we owed and made about $500 on the hubby's truck. But we gained $1,200 back into our budget to apply towards others things. I used our one vehicle during the day to commute to and from work. My hubby had a delivery truck that he drove for his job during the daytime that he was able to take home with him, so we were able to do the whole one car thing. Once he no longer had the delivery truck option, we were able to borrow a vehicle from a family member. We went down to one vehicle in October of 2009 and saved to pay cash for a second vehicle. We were able to pay cash for a second vehicle by September 2010. If you are someone that is super handy with vehicle repairs or has a relative that works on cars, it would not take you as long to purchase a vehicle free and clear. We are super picky about the condition of our used vehicles and my hubby really enjoys searching for the best deal, so it took us a little longer.

5. Skip The Drive-Thru Coffee Stand

Coffee dates are a part of my life. I enjoy meeting friends for coffee. I also enjoy driving through my local coffee stand to grab a caffeine fix, but at almost $5.00 per visit, it was greatly hurting our dream to become debt free. Because my mom is an enabler and fellow coffee lover, she gave me a Starbucks giftcard that she would reload for me as an encouragement to stay the course. I definitely cut back on my espresso consumption though. Let's say you purchase a coffee every day on your way to work at $5.00 each visit. That equals $25 weekly and $100 monthly. Now let's say you're not paying cash for it, but putting it on a credit card to get miles, and you aren't paying that card off every month, so you are now being charged 15% more for those purchases, not to mention the $75 annual fee for the card. As a challenge for yourself, just skip the espresso for one month to save at least $100 and make coffee at home, or buy a pack of the Starbucks Frappuccino drinks from Costco.

6. Cut Up The Credit Cards

Remember, in my past life, I was the girl that started collecting credit cards the minute she turned 18. I had retailer credit cards, along with multiple Visa cards. They were all so pretty and filled out my wallet quite nicely. But did you know, getting rid of your credit cards will not only save you money on all of the interest you're currently paying each month, but it will cause you to spend less money. Don't believe me? Read this excerpt from a USNews.com article...
"More mindful spending. Studies show that consumers spend less when they hand over cold hard cash versus swiping plastic, since cash feels more like real money. "When you have the tangible money in your hand and you can physically feel it depleting each time you spend, you are much more likely to notice what you are buying and be careful about it, rather than if you just have the ease of swiping a card," says Elle Kaplan, CEO and founding partner of LexION Capital Management in New York."
You can read the full article here. It does mention losing cash as a reason not to pay with it, but I cannot tell you of a time where I lost all of my cash. Another argument I would present is, what's worse, physically losing $20, or losing it to a bank due to the interest you are paying them, or to your favorite retailer, because you HAD to add 5 more shirts to your clothing options when you can't comfortably fit all of your clothes into your closet as it is.

Another argument for not wanting to cut up your credit cards is that you have them in case of an "emergency." My challenge to you would be, define emergency. My second challenge to you would be to self-insure for those emergencies. We all know that life happens. We need new tires, the refrigerator stops working, or you have a medical issue come up. Why not start saving for these emergencies now? You know that they are bound to happen. Open a savings account and start putting money into it now. Dave Ramsey suggests getting $1,000 into that account as quickly as possible. Most emergencies will be covered by that. Once you've reached the $1,000 mark, pretty much any financial planner will tell you to save up enough in that emergency fund to cover you for 3 to 6 Months in case of a major emergency. This idea can be very daunting if you're buried in debt, because you're adding in all of your debt payments to that number. Once you're debt free, that number becomes MUCH smaller. For us it includes food, mortgage, gas, utility bills, and other non-grocery necessities (shampoo, diapers, toilet paper, etc.). We were able to fully fund our emergency fund exactly one year after we became debt free. You can do it too friend!

7. Stop Getting Fancy

When we bought our first home, one of the things I stopped doing, in order to save money, was getting my nails done. Acrylics were all the rage back then, and if I remember correctly, you had to get a fill every 2 weeks if you wanted them to stay looking decent. I think a fill cost $15 per visit. I also stopped coloring my hair about 7 years ago. I used to get all kinds of fancy highlights and it cost about $100 every time I did it. I went to my hair gal, had her dye my hair as close to my natural color as she could, and never looked back. Okay, that's a fib. I'm starting to look back now. Let's be real, I'm a 30 something brunette, and the grays are starting to come in with a fierceness. Hair color may be entered back into the budget soon.

As for my hubby, he started cutting his own hair. Since he began doing this, we have purchased two different electric shavers, both for around $20 each. If you have longer hair, this might be a challenge, but he has gotten super good at using a mirror to see the back of his head while shaving it at the same time!

8. Dine In

When we were at the beginning of our debt free journey, we stopped dining out. We hadn't eaten out in months, when a new restaurant sent out a mailer for a free pizza. FREE! With no strings attached. I was SO excited! I dressed cute for our pizza date, we budgeted to buy drinks, and we headed out. The restaurant was cool and new. The restaurant LOST our order. I LOST my cool. After about 30 minutes, I knew our pizza wasn't coming. I had tears in my eyes. I was SO excited for this and they LOST our order. My poor husband. He asked what I wanted to do. I just wanted to leave. It was awful. Well, the manager felt so bad that he gave us $40 straight out of the till! I couldn't believe it! We left the restaurant, and since it was so traumatic for me, we headed straight to Baskin Robbins for some comfort ice cream. In case you're wondering about the pizza place, it's no longer in business. I don't even think it lasted a year.

The toughest part of our journey when it came to not going out to eat though, was feeling like we were missing out on celebrating our friends and family. But, if they are true friends, they aren't just part of your life because you both enjoy the same restaurants. If you simply can't miss dining out for a birthday or other celebration though, consider eating something before hand, splitting an appetizer or meal with someone, and drinking water. We went out to dinner one time and a friend of ours ordered a glass of wine for $6.00. We found an entire bottle of that same exact wine at Target for $6.99 the following week. No joke. Restaurants are in business to make money. You are paying SO much more than if you consumed the same meal at home.

Another way to still dine out while saving money is to only go to places you have a giftcard to. I don't know about you, but we get A TON of giftcards to restaurants as gifts for holidays and birthdays. If you have a giftcard, enjoy dining out! If you get to weigh in on where someone wants to celebrate their birthday dinner, pick a place that you have a giftcard for. Just like all of the other things mentioned above, this isn't a forever thing, so don't feel selfish for suggesting a place that is more affordable for you!

9. Sell Items You Don't Use

My dad has so. much. stuff. He always tells me that it might be worth something, or that it will be worth something someday. My response, it's only worth something if you sell it! When items are tucked away in storage, or collecting dust on your shelf, they are worth NOTHING. If you haven't used something in a few years, sell it. You could apply that money towards paying down debt, building your emergency fund, or establishing your retirement account. Whether you sell something for $5 or $5,000, it all adds up toward your goal of financial freedom. The bonus to selling stuff is that you de-clutter your home, and a home that is de-cluttered actually makes you feel less stressed out. These are all WINS in my book!

One item that we owned that my hubby had a tough time selling was his quad. I bought it for him as a Christmas gift a few years prior, and it was something that he enjoyed owning. However, he rarely road it. He maybe road it 5-10 times per year. So even though it was hard for him to part with, he made the sacrifice for our family, so that we could put the $1,000's we made from selling it toward our financial freedom. He's so awesome.

We sold old textbooks, a Starbucks espresso machine we gave up on using, and anything else that had some kind of value that we weren't currently using. We hosted a garage sale and posted items on Craigslist. Now, there are even more avenues that you can use to sell items on. Take advantage of these sites and SELL. YOUR. STUFF. You won't regret it. And if you do, you can always purchase it again once you're debt free.

10. Begin A Part-Time Job

Like everything else mentioned, this is not a forever thing. Don't work yourself to death. Work to live, don't live to work. With a weekend or evening job, you could easily bring in an extra $1,000 per month. You could deliver mail (they have weekend only deliverers), deliver pizza, serve at a restaurant, work retail, do weekends at a coffee stand, or any number of other things. If you're a laborer, there are so many side jobs that you could take. If you don't have a trade, or don't want to miss out on life with the kiddos, consider a part-time job you don't get paid for, but that you could trade for. For example, if you are a crafter, you could get paid for your work, or trade with another crafter for something you would like to have. You could trade babysitting with friends. You could trade meal prep for an odd job that needs to be done around your house. If you can humble yourself enough to take a second job, you will make SO MUCH progress towards your goal.

My hubby and I worked all kinds of different jobs while we were getting out of debt, and now I feel so incredibly blessed to have the opportunity to be a homemaker and Momma to Miss P and soon to Baby #2 as well. The sacrifices are worth it friends. It is never too late to start.

I hope that at least one of these suggestions helps and encourages you towards your financial goals. We began our journey with taking Financial Peace University. There are classes offered nationwide. If you are interested in taking a class, check out the list here. I don't get a spiff for you checking it out or signing up, I'm simply sharing the link, because it changed our lives financially, and I hope it will help you too. We continued our journey through self-discipline and friends that were on the same road holding us accountable. This isn't for everyone, but it might be for you :)

Comments

Anonymous said…
Another way to save money on your cars: if you can't be a one-car family try to use one car as little as possible. We didn't want to give up both cars but my husband was able to take the bus or train to work everyday. He only use his car on the weekends. We were able to cut his insurance for that car in half because of a low mileage policy our insurance company had. We had to document his mileage for six months with the company and now we have to document it once a year to keep the policy. Saves us about 50 to $60 a month.

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