Debt Free

The number one rule for getting debt free; spend less than you make. It’s not rocket science, although it can be pretty tough when all the demands of modern life pile on at once. That being said, you need to spend less than you make if you look at your expenditures on an average basis. There will be some extenuating circumstances when that becomes impossible. As a counter to my last post about wasting money, here are some ideas to save some. In an effort to help keep your spending below your income, here are some rules and tips for frugality and saving money. Some of these I’ve posted at various places on Debt Free before, some are new.

Frugality and Money Saving Tips

Frugality and Money Saving Tips - Class 1 –
Look at your expenditures as a percentage of your income. Your largest expenditures typically offer the greatest potential for future savings. With most people, housing, weather it is rent or a mortgage payment, combined with associated costs, will be the largest single expense category in their budget. If you own a home, you’ll also have to include repairs, property taxes, insurance, and regular maintenance in this budget category. For you renters, your landlord has thoughtfully included them in your rent. Here are some ways to cut back on housing expenses.

1.                  Cut energy costs – As the price of petro products continues to increase, this category will become even more important for those who petro-based sources for energy and/or heat. Here are some ways to cut energy costs in and around your house.

a.       If your house is more than about 15 years old (new houses are very air tight, so you can probably skip this step), head to Home Depot, True Value, or Lowes and pick up a few cans of that expanding foam insulation, and a few tubes of caulk. Together they may set you back $25. Go through your house with a fine toothed comb and find any cracks or holes and seal them up.

 

b.      While you are at the hardware store, get some weather stripping and threshold seals for your doors. Long cracks, such as the one around doors and windows offer huge potential for savings. Why? Because even a tiny crack, magnified by a sufficient distance, is actually a huge hole. That miniscule 1/16” gap around the perimeter of your 36” front door is the same as a 3” x 4.5” hole in the door. You wouldn’t dream of letting a day go by with such a hole in your door, so fix the weather stripping.

 

c.       Modern appliances are very energy efficient. One thing that kills all the hard work of their engineers and designers is when we, the beneficiaries of all their hard work, do our best to screw everything up. Many people keep the refrigerator open when deciding what to get out of the refrigerator, or worse, when  they are using an item they removed, but will be putting right back. I’ve seen the door left open for over 30 - 60 seconds because of this. That makes your refrigerator work overtime to restore the wonderful state of refrigerated bliss that keeps you from contracting salmonella.

 

 

d.      Change your bulbs and or add dimmers. Modern compact fluorescent light bulbs, and soon LED bulbs are a very effective way to save money on energy and bulb replacements. They use about 60% - 75% less energy per unit of light they produce than a standard incandescent bulb, and can last 10 times as long (although I don’t seem to get that kind of life out of them very often).

 

An interesting development on the horizon is LED lighting. This promises to be even more efficient than CFL lights and the lighting modules last up to 50,000 hours. You can conceivably use one LED lighting unit for the life of your home. They are very small, use very little power, produce almost no heat (very safe) and can be used in some interesting locations. They are beginning to be used in places such as Christmas lights, and flashlights. Some expensive designer LED light fixtures have been on the market for a few years, but they are getting less expensive. At this point they are still a bit pricey, but recent advances in high brightness LED technology have begun to bring the price down.

 

Dimmers will not only save money, but also dramatically increase the life of your bulbs, saving you from trying to get that ladder set up on the stairs to replace the bulb in your 18’ entry foyer. [One day soon, incandescent bulbs will probably be illegal in many locations, reducing your autonomy when it comes to selecting a light source, but saving energy. I wonder if those making these laws are aware that many CFL bulbs are loaded with dangerous heavy metals. The best laid plans….]

 

e.       One thing many people don’t know is that ay electronic devices and appliances aren’t really off when you turn them off. They’re in a standby mode, ready to leap to life at your next request. The thing is that while they’re in standby mode, they use a trickle of energy to keep their little electronic brains ready for instant action. If you have many of these devices, all these trickles can add up to a substantial bit o’ power (and your money).

 

It’s a good idea to turn these energy parasites off if you’ll not be using them for a few days or so. It’s not necessary to completely power off things such as your TV, microwave, or stereo every day, only if you’ll not be using them for an extended period. Just use the off switch n the back of the device or pull the plug from the wall. Be prepared to wait a minute or two the next time you want to use it, however. NOTE: Some things have a memory that needs to stay powered up when it’s in standby mode or else you’ll have to reset everything. Leave these devices on.

 

2.                  Other ways to save money around the house

a.       Make sure you use only the manufacturer’s recommended amount of your consumer products, such as detergents, dryer sheets, and soaps. In fact typically you can even get by using 10% - 15% less than that. It’s pretty common for people to use as much as twice the recommended amount of a product, even by people that clip coupons and cross multiply to compare price per unit when shopping (these people are out there, I know some of them). Stop and think about this for just a second. Using 50% more of a product is the same as paying 50% more for it, and most people would balk at that idea.

 

b.      Use one of the cheap, safe alternatives that are available for many consumer products. You’ll save money on the products themselves, and possible your healthcare costs as well. For example, you can use vinegar and a wadded up newspaper as a window cleaner. It works great, is inexpensive and non toxic.

 

Coke (a Cola, not aine) is great for cleaning chrome on your car, instead of chrome cleaner. You can also use it as a cleaner for burnt-on grime on pots and pans. Just boil the Coke in it for a few minutes and the burnt on grime will be gone. Coke also works as a grout cleaner for tile surfaces such as floors and countertops.

 

Frugality and Money Saving Tips - Class 2 – Depending on your lifestyle, food is very likely high on your list of expenditures. Reducing your food budget can really help your monthly cash flow. There are a few things you can do that will go a long way to helping you save money on food.

1)      Shop at warehouse food stores, rather than at brand name markets. Many of these warehouse food stores have fantastic selections and are anywhere from 20% - 40% cheaper, on your average weekly food purchase. That’s nothing to sneeze at! Sure, they can lack some of that atmosphere we all love to experience when shopping at Safeway, Albertsons, Winn-Dixie, or Kroger, but they will save you some money.

 

2)      Use store brands rather than name brands. This is not always the best choice, as sometimes there really is a difference in quality, but most of the time you’ll be getting the same quality food for less money. In fact, on many occasions, the food is exactly the same, having been processed and packed in the same plants, from the same source.

 

3)      Buy food in bulk. This requires some thought. Don’t buy huge amounts of something if it will spoil before you’ve used it. Something else to look at when purchasing in bulk is the price per unit. There are times when a larger or bulk purchase is not the best deal (see my blog post on unit costs here), but usually it is.

 

4)      Although they score high marks for convenience, pre-prepared food is far more expensive than food you’d cook yourself using bulk ingredients, and is, in many cases, less healthy. Cook your own meals and leave out all the less wholesome ingredients they seem to throw in to the boxed, frozen meals.

 

5)      Stay away from the store when you’re hungry, tired, or both. You tend to buy more food, and it is usually less healthy for you to boot. When you’re in one or both of these states, you are more likely to buy easy to prepare foods and unhealthy snacks you might otherwise avoid.

 

6)      Don’t forget to look at the store’s website to find Internet only coupons or web specials. You can sometimes save a few more percentage points from the food budget here.

 

I’ll have some more money saving tips to help you get debt free soon. Remember the money you don’t spend is more that you’ll have to get rid of debt, invest, and help you find financial security.