Debt Free

Here are some tips on saving money you can use every week. It’s far easier to not spend and extra $100 a week than it is to earn an extra $100 a week. Lest you think I’m blowing smoke on this one, walk into your boss’s office this morning and ask for a $100 a week raise. For the 99% of you whose boss says “Not today, times are tough” here are some ways to save an extra $100 a week. It’s hard to underestimate the importance of frugality when it comes to getting debt free. In their book “The Millionaire Next Door”, authors Stanley and Danko show how that the majority of high net worth individuals in the United States got that way through frugality, rather than extremely high incomes.

Charles Dickens once said, paraphrased for this century: “Earn $50,000 annually and spend $49,600; you’ll be happy. Earn $50,000 annually and spend $50,400 and you’ll be miserable.” Old Chuck was right on the money. Even 150 years ago this piece of fiscal wisdom was hard to fault. Anyway, enough literary references for one day; here are some tips on saving an extra $100 every week without living in a cave lit with candles, while eating dog food for dinner:

Tips on Saving Money #1
Audit your expenses – There are 2 categories of expenses you should be looking when trying to regularly save money; regular, recurring expenses and singular expenses, which through force of habit may have become recurring. Tip number one for saving money is to analyze all your regular, recurring expenses and find any opportunity to trim them back. These include all your utilities, insurance, credit card bills, and memberships and/or subscriptions. Block out at least a couple of hours, because that’s how long it will take. It could prove to be a very profitable couple of hours, so take the time.

These savings can add up fast and even better, you’ll realize these savings over the long term, as you’re billed for them every month. Look at your utility bills, such as power, water, sewer and cable. The first thing to check is that they’re accurate. Are you being billed for any services that you’re not receiving? You wouldn’t be the first to be billed for extended cable with the sports plus pack, when you were only getting the regular sports pack. You have to scrutinize your bills carefully to catch any such errors.

After you’ve verified the accuracy of all your bills, the next step is to go through each one and make sure that you’re actually using the services that you’re being billed for. For example, I just audited my expenses and realized I’m still being billed $7.95 a month for AOL that I haven’t used in years. I originally had it so I could get on the Internet in any town in which I happened to travel, no matter how small or out of the way. Now, however almost any hotel worthy of sleeping in will have free high speed Internet access, so AOL is useless to me. (Actually the cheaper hotels have free Internet, the nicer ones usually bill you around $10 a day for it. Go figure.)

As you thoroughly audit all your bills, fill out a spread sheet. This way, when you’re finished, you’ll have an accurate record of all your unused or little used services and how much you’re paying for the privilege of having them.

So now you have two expense categories; those services you intended to have, but no longer use, and those that you’re being billed for by mistake. Cancel those that you are using little or not at all. Next, call all your service providers that are incorrectly billing you, if there are any, and get back all the money they have incorrectly billed you for. If you have Showtime, but only watch it 3 times a month, why have it at all. Many times you could just rent a movie once a week. You’ll come out ahead monetarily and get better movies to boot.

Tips on Saving Money #2
Look at your diet to save money. Really, there are many things that you eat that you could either eat for less, or do away with altogether. This really adds up fast. The key is to eat healthy, but frugally. Thankfully fresh vegetables are quite inexpensive and also happen to be extremely healthy; antioxidants, you know. A rule with food is that the more processing and salt that has been added to your food, the less healthy and more expensive it will be. The exception to this rule is exotic or organic foods. These can be very healthy, but also very expensive.

I’m going to be the picture of hypocrisy as I write this while sipping an Americano, and tell you to stay away from expensive coffee drinks. At least an Americano is usually the least expensive drink on the menu at your average espresso emporium. Switch to a less expensive drink, or horror of horrors, drip coffee. The 2008 National Coffee Drinking Trends survey found that 17% of Americans drink gourmet coffee drinks daily. As the average such drink is about $4.00 (if you’re cheap and don’t tip) that’s one expensive habit. I would expect that the percentage of average urban Americans that drinks such beverages is much, much higher. So, if you’re in Boston, New York, Seattle or San Francisco cut back on the frilly java.

 Whole foods will be better tasting, cheaper and keep you healthier. You just have to get tin the habit of actually eating them. The next tip that can save you money on food is where you shop for your victuals. Stay away from specialty and trendy food markets unless you feel Buffy just won’t respect you should you shop there. Honestly, you get to shop with a great cross section of America by shopping in a warehouse store. I regularly see brand new Mercedes S550s and Lexus RX350s in the parking lot of our warehouse food store right next to beat up Cavaliers and Toyota pickups. Inside it is so ethnically diverse I could be shopping in Mexico City, Khartoum, or Mogadishu, depending on the day and time I’m shopping. Cultural education aside, it’s the fact that I save about $200 - $250 a month on food for a family of four by shopping at such a store that I choose to spend my money there.

I achieve these savings without making huge changes to our diet. I’m fairly conscious about sale items and value brands, but not nearly as much as I could be. Was I to analyze our purchases a bit more carefully the savings would be even more dramatic.

Tips on Saving Money #3
As with tip number 1, be prepared to spend some time on this one, but it will be money well spent. Depending on your individual financial situation and lifestyle, this could actually take all day. Gather all your bills and credit card statements and go to the quietest corner of your house, away from the TV, kids and your dog. Organize your bills in some sort of order. Make this something that works for you, but make sure all the customer service phone numbers and balances are easy to find for each of your creditors and service providers.

Do whatever makes you the most effective, weather it’s a cigarette (more on these later), cup of coffee, an hour in the gym, or a good night’s sleep, then go to work. You’re going to call every one of your creditors and service providers and negotiate your best possible deal with them. You can save big money doing this. In fact, you could easily save your $100 a week from this alone, depending on how large your bills are. It’s important however that you’ve taken the steps I described in tip number one first. You want to make sure you’re not negotiating on items you shouldn’t have been paying for in the first place. As another example, I saved about $60 month on my Internet and cable bill alone by just asking what they could do for me.

Call every single one of your credit card companies. After you’ve put any of your cards on auto-pay that aren’t set up that way already, you’re going to get a lower interest rate on your credit cards. If you haven’t had a late payment in the last 6 months, this should be no problem, especially if you have a stack of credit card offers in your mailbox everyday. Credit card companies know they have competition that numbers in the hundreds, so in most cases will want to keep your business if you have been a good customer.

This is one of those steps that isn’t very difficult, but it’s fairly time consuming and uncomfortable for many people, so it’s often not done. That’s a shame, because too many people don’t follow this tip, and so are paying far higher credit card payments than they should be.

Tips on Saving Money #4
Look at your habitual expenses and entertainment, such as cigarettes, movies and the like. I’m not one to suggest skirting the law, but the snacks at the movie theaters are outrageously expensive. Bring in your own and you’ll easily save $5.00 –   $10.00 for a family of four every time you go to the movies. Actually, at $10 per ticket for a movie, plus parking if you go in the city, you should probably think about renting instead.

About cigarettes, if you smoke, you know you should quit, you’ve heard it from a thousand other people, you don’t need me telling you too, so I won’t. Keep smoking if you must, but drop back to a pack a day. If you smoke 2 packs a day now you’ll save about $6.00 - $7.00 a day right there. 6 x 7 = $42 a week, so you’re almost half way to your $100 weekly savings. If you smoke 3 packs a day, well then, you’ll be even further, won’t you?

Tips on saving money are like dollars themselves, you can’t have enough of them. Now you have some more to sustain you on your journey toward being Debt Free.

*Go Bruins*