20 New Ways to Save
Posted on September 12, 2005 21 Comments
For those of us who missed the article on MSN, here’s one from M.P. Dunleavy at msn.com titled “20 ways to save on a shoestring.” “Get it here.” I really liked her suggestions.
20 ways to save on a shoestring
How much you save has little to do with how much you make, a study suggests. So forget the excuses; here’s a roadmap for finding money you didn’t know you had.
Savings.
When you hear that word, do you feel a clutching sense of guilt and inadequacy? If you¹re like most Americans, you must. According to a study of saving behavior by economists Steven Venti of Dartmouth and David Wise of Harvard, more than 75% of respondents said they knew that their savings, specifically for retirement, were insufficient.
That’s shocking, but not as remarkable as their discovery that how much you save has very little to do with how rich you are. Venti and Wise divided the 7,700 households they studied into 10 income groups. The top 10% of the lowest income group nonetheless had saved more than $150,000 per household. Meanwhile, middle-income folks, on average, had only $45,000 in assets.
That’s annoying and embarrassing, and it means I have no excuse for my inadequate savings. And neither do you. Because what Venti and Wise found to be the most significant savings factor was no more jaw-dropping than this: Ya just gotta save it.
But hooooow, you whine? How can you save a red cent when you just barely live on what you earn? Well, since you asked: Saving is a two-step process. First you retrain your brain, and then you find all kinds of clever ways to live on less (many of which are conveniently located below).
Step 1: Retrain your brain
Saving money is a state of mind. Before you can start, you have to renounce the spending — and stop believing you actually need all the stuff you’ve been spending money on. Just don’t. Spend, that is. Sure you want it, but that’s no excuse for buying it. The next time you want to buy something, take the $50 or $100 out of your wallet, and stash it somewhere. See? That’s called saving. You don’t end up with stuff; you end up with MONEY. A few other tips for the brainwashing you¹re about to do:
Accept frugality as your savior. Become a closet cheapskate and emulate your frugal friends. Note that they fix the shower curtain instead of buying a new one. Sit down with Depression-era relatives and ask about economizing. That’s what I did. And, yea, did the spirit of saving take hold of me!
Seek inspiration. Get thee onto MSN Search and type in “living cheaply,” “frugal living” and “voluntary simplicity.” You’ll find a gazillion Web sites devoted to living on less, including thefrugalshopper.com, simpleliving.net and frugaliving.com.
Cry poverty — with style. Learn handy phrases like, “Let’s eat somewhere cheap.” And “Shopping? Blech. Let’s go for a bike ride.” It’s less embarrassing than you’d think, because more people are in your shoes than you think — and they’ll be grateful you spoke up.
Step 2: Now save it!
There are a thousand ways to live on less. But you don’t want to make your life a misery. Here are some of the most painless ways you can economize without losing out on quality of life.
Don’t even think about it. Direct deposit is a saver’s best friend because the money is whisked away into your IRA, 401(k) or money market account — and you don’t have to do a thing. Except drop by your payroll department and/or your bank and fill out the damn forms. Today.
Go veggie. If you can do three meatless days a week (without substituting pricey fish), you could save $25 a week, which equals $100 a month, which equals $1,200 a year! Beans: Ya gotta love ‘em.
Play money games. Whenever you get a $5 bill, put it aside. Or do it with ones, with quarters or all your spare change. You’ll have a nest egg before you miss a nickel.
Never spend a windfall. Take your income-tax refund, that holiday money from your folks, the $16.35 overpayment check from the telephone company and any other extras and save ‘em.
Haggle. You’d be amazed at who will drop their prices, fees and interest rates: airlines, hotels, credit card companies, computer/appliance/rug salespeople. (For more on how to haggle, read Liz Weston’s column here.)
Re-evaluate. Re-evaluate. Re-evaluate. That dinner out cost more than you spend on groceries in a week. That pair of shoes is worth half a commuter pass. Learn what your money is worth, and you won’t be so quick to dispose of it. Use some of the tools here at MSN Money to analyze your spending (See box at left).
Don’t overpay your taxes. Sure you love to get a fat refund from the IRS every spring. The fact is, however, you’re effectively lending money to the government interest-free. Go through your tax return and see if you can plan your withholding so you get to Dec. 31 maybe getting a $100 refund. That way you can use your money NOW. (And bank the refund when you get it.)
Raise your insurance deductibles. Reassess the deductibles for various kinds of insurance. If you can raise them, your premiums drop.
Get your mortgage costs down. First, look at whether the rate is too high. If it is, look at refinancing — if you’ll save money. Next, let’s look at the private mortgage insurance (PMI) you’ve been paying because you didn’t have enough money to make a 20% downpayment. You’re protecting the lender, not you. If the equity in your home is greater than 22%, demand that your lender cancel it. It’s the law. Lastly, pay ahead on your mortgage. If you can swing an extra $100 per month, you will save thousands in interest costs over the long haul.
Toss the catalogs. The most insidious form of spending temptation known to man or woman. Chuck them straight in the trash. Yes, including Victoria’s Secret. Sorry, guys.
Don’t pay unnecessary fees. Like the $1.50 you pay just because the ATM is right there, right now as opposed to walking two blocks to your bank, where you don’t get charged every time you use your cash card. Or the late fees for returning videos. I know a woman who paid $60 in late fees to a video store last year. (It wasn’t me.) (OK, it was.) Or those fat charges banks hit you with when you write a check that, well, bounces.
Clean it yourself. I’ve discovered a nifty trick: When a clothing label says, “Dry Clean Only,” I wash it. Or I dab out that little coffee stain with an old-fashioned cleaning device known as a sponge.
Never pay a pro. If you can fix the neighbor’s car, and she can paint the bathroom: do it.
Bank your raise. You may find that measly 3% to 5% boost in the paycheck irritatingly tiny. So add that to your direct deposit and live on your previous salary.
Pay less for long-distance. Evaluate your phone bill and see how much you’re paying per minute. Some dial-around codes or cheap calling cards (one without a surcharge per call) may give you a better rate. Not only do you save, but you may find you won’t need to speak to Al in Schenectady so often.
No pet pampering. Does your dog need those pricey snacks? Does your cat need acupuncture? We didn’t think so.
Never pay full price. If you must shop, for pete’s sake, discover the online world of discount Web sites. Ebay is still OK, but half.com and craigslist.org are excellent sources of “lightly used” goods — everything from books to jewelry to office furniture — to the entire first season of Star Trek on video.
I could go on an on, but let’s stop here. If you follow even a few of these tips (as I have) you’ll end up with a substantial chunk of extra cash every month. Just stay in the savings state of mind, and don’t blow it on those post-holiday sales, OK?
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September 13th, 2005 @ 3:52 pm
Hi — I’m a fellow Chicagoan and I’ve really been enjoying reading your site. I did see this article on MSN and thought it had lots of good ideas….. but as for the “Cry poverty — with style” tip — WHERE are these alleged “frugal friends” that we’re all supposed to have, who don’t mind eating someplace cheap or forgoing the multiple rounds of martinis after dinner? Do such people exist in this city? I’ve currently been trying to widen my social circle due to several close friends moving away, and it seems like everyone I meet looks at me strangely if I need to limit my nights out for money reasons, or am not willing to whip out the plastic when I run out of my entertainment budget cash. There should be a support group or something for frugal city dwellers — I refuse to believe I am the only one but it sure feels that way sometimes…
September 13th, 2005 @ 6:33 pm
Yeah, it can be rough at times, especially when attempting to make new friends in the city. I’m going to use your comment for a post, along with some ideas for making new friends. Thanks!
Nicole
September 13th, 2005 @ 7:59 pm
Hi Anastasia,
I know from experience that it’s hard to be as social as I want to be while still being frugal. But I’ve found that my friends understand when I say I’ve “just been feeling poor recently.” If you’re still feeling pressure, there’s nothing wrong with nursing one or two drinks in a night. And suggest going out to pubs or dives instead of swanky bars. But if you’re hanging out with people who truly look down on those trying to save money, I’d say keep looking for new friends.
Good luck!
September 21st, 2005 @ 6:01 pm
I over-withold my Federal taxes because the penalties for under-witholding are so severe. And its hard to predict with things like AMT, dividends, cap-gains.
September 23rd, 2005 @ 6:12 pm
Here’s a cleaning tip for you: Citrasolve will get out any stain. Even oil stains that are dryer-baked in. A bottle is about $6 but has saved many of my clothes from the trash bin!
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October 2nd, 2005 @ 3:12 am
I am looking everywhere for shoes and shoes, while doing so I somehow stumbled onto your shoes blog. I am happy to say I learned something and will look into this further…
Thanks for the great posts…
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May 16th, 2007 @ 9:13 pm
Hey Nicole,
Top money saving blog with some fantastic tips.
I would have suggested another to your top twenty, buy used cars!
What with the depreciation as soon as you drive it off the forecourt, buying a new car is totally daft if you’re looking to save money.
Cheers
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