Debt Free

Your home is one of the largest expense categories in your budget. Even if you don’t include the mortgage interest most of you pay each month, you’re still paying more for home expenses than almost anything else. One of the keys to becoming and remaining debt free is to balance your budget. Lord knows the government has trouble doing it, and get away without doing so for years. You, however, have no such luxuries. Here are some ways you can (more or less) painlessly cut back. The money you save each month will contribute to your efforts to become debt free or your investment accounts.

1)      One of the largest budget items in most locales is energy. With prices skyrocketing, any savings here will add up in a hurry. There are some things you can do to pinch pennies from your energy bills every month. If you live in a cold or very hot location, heating, ventilation and air conditioning (HVAC) consume most of your home’s energy.

Many utility companies offer free or inexpensive energy audit services. These will locate money losers throughout your home and make suggestions for ways to eliminate them.  If yours doesn’t do this, you can find a private company that offers the service. It probably won’t be as great a value, but it should pay for itself nonetheless. If all else fails, you can do it yourself. Look for leaks and cracks where the air you paid big money to heat or cool can escape, allowing outside air to take its place.

Common areas this occurs are around windows and doors, fireplaces and ductwork. A seemingly small crack can be bigger than you think. For example, a tiny, 1/8” crack under a typical 36” door is the same as having a 4” x 1” hole in the door. Most of you probably wouldn’t let that go unrepaired, and you shouldn’t leave the crack under the door either.

If your home’s insulation is poor, upgrade it. Sometimes you can get credits from your utility company, county or municipality for this. One other thing, no matter what so many people thing or how they use their thermostat, turning it up to 89 freakin’ degrees when you want to take it from 62 to 68 won’t make it go up any faster. Just turn it up to 68, relax and just wait for it. What will happen is you’ll forget to check it, and your home will be up to 75 before you realize it. There, you just paid to heat your house up 7 extra degrees for nothing. Keep the heat off in rooms you don’t use. If you have to go in there, gut up and wear a sweater, whimpy! You probably don’t need to keep it so frosty inside during the summer Phoenix sun, either, 75 degrees is fine. Moderation in temperatures is key to saving money.

Another energy saving tip is to hang blinds outside your windows to block the sun. This willl keep a tremendous amount of solar energy away from your windows, where it will infiltrate your home and cost you money in increased HVAC bills. You can put the blinds inside the house, but they will be much more effective outside.

If you can cook something in your 1,200 watt microwave for 5 minutes instead of cooking it in your 5,000 watt oven for 15, you’ll save energy. It’s simple math. I know the oven isn’t on the entire 15 minutes, but you have to preheat too, so don’t forget about that.

As a bonus to saving money, you’ll help cut U.S dependence on foreign energy sources.

2)      Another big budget item is you homeowner’s insurance. You can cut back here in a few ways that won’t affect your daily life. Many insurers are now offering big discounts for monitored security and fire alarm systems. In many cases the discount is much larger than the monitoring fee. This is especially true if the alarm system includes fire alarm capability. If you live in one of the thousands of homes throughout the country with a security system that isn’t used, check with your insurance provider. It may be worth getting it monitored.

Make sure you are getting maximum discounts from your insurance company. Most offer bundling discounts for using one company. If you have different home and auto policies, check with both to verify this and go with the one offering the best deal. In addition, you should usually raise your deductible to $1,000.  The discount can be substantial. You won’t want to claim small loses anyway. Your rates will probably rise, or worse, you could get blacklisted. Many people have found, after making several claims against their homeowner’s insurance in a certain period, such as 2 years, their rates drastically rise. When they go to get insurance from another provider, it’s the same story, if they are able to get it at all.

This may seem evident, but shop around. You can get better deals at times through work, industry associations and alumni groups. If you’ve been with the same insurance provider since Methuselah was a child, you may qualify for a discount as well.

Another insurance related savings can be found by eliminating private mortgage insurance (PMI). If your home equity is greater than 20%, you can probably eliminate this money sucker.

3)      There are all sorts of miscellaneous ways to conserve.

In many cases, you can use less detergent in both your dishwasher and clothes washer. Usually, it will work great.

If you’ve got so much crap you’ve put some of it in storage, it’s time for a yard sale! Get rid of your excess stuff and the storage rental fees at the same time. If you’ve got stuff you haven’t seen in over 5 years, unless it’s your wedding album or other item with high sentimental value, ditch it! You’ve probably forgotten you had it anyway.

How much do you really use those premium movie channels anyway? Do you really need both HBO and Showtime? What about just a Netflix subscription for $6.00 a month? Do an inventory of your home’s communications bills every month. Between cable TV, satellite (yes, I know people with both), Internet, cell phone, land line phone and newspaper, you could be spending $300 - $400 monthly. How much use do they get? Can you get a bundling discount for using a single utility for multiple services in your area? For example, cable TV companies now offer TV, Internet and telephone services. You can usually get a discount by getting all three from them. Do you need both a land line and a cell phone? If not, verify you can still use 911 services.

There are so many ways to save money on your house bills, it is almost impossible to list them all. Not all of them apply in every location. You don’t have to give up the big screen and the pool, but do you have to keep the pool so warm?