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| We all know ways to save money. All you need is the commitment to follow through on your plans. |
If saving money could really make you rich we'd all be billionaires by now. Well, at least millionaires. I have actually read a few stories about people who saved their way to riches. To get to that point they had to save all their lives. Most of us don't do that. Like the wise man says, you have to spend less than you make. If you don't make enough to save you have to make more tomorrow than you need today. And now I guess you want to know what my fantastic "how to save money" tips are. I won't keep you waiting.
In my last article I mentioned some microinvesting apps. Some of the apps out there will round up your purchases and deposit the extra money into a holding account. I guess that's a way of saving money but it makes life expensive if you ask me. Instead of paying $3.5 for a gallon of milk you're paying $4. It's just a way to ensure you save something rather than spend it all on lottery tickets or whatever.
Stop Paying Bank Fees
I hate dealing with banks. I know they exist to make a profit but why do their profits have to come from the people who trust them with money? We grow up expecting banks to make money from loans but they really make a lot of money by charging their customers fees. Here are some of the fees I've learned to cut out:
ATM Fees - You can avoid paying ATM fees by only using your bank's network. But what do you do if you're not near one of your bank's ATMs? I began taking extra cash out with my groceries years ago. The stores don't charge me anything for doing that. And my wife usually shops at three grocers. I can take enough cash out for the week in one shopping day.
Checking Account Fees - If you have a checking account you are probably paying a monthly fee. I understand why banks charge these fees. They are performing a service. But they are also holding our money and they can collect interest on that.
One way to stop paying checking fees is to set up a direct deposit to your checking account. This is a fast, secure way to get your paycheck into your account. You don't have to rush to the bank to deposit your check. I've used to direct deposit for years. Some banks have a lower minimum amount for direct deposit than others.
Over the past few months I've heard about newer online banks that don't charge monthly fees. I haven't tried any of them yet but I'm thinking about it.
Overdraft Fees - This is the hard part. You have to stop writing checks and setting up direct debits. That's the only way I've been able to stop paying these fees. Companies tell you it's convenient to set up automatic payments. Well, convenient for them but a pain for you. I cancelled all my direct debits because I had so many going they were zeroing out my account every month. My bank finally said they weren't going to refund any more overdraft fees.
Problem solved: if you want my money you allow me to pay as I go. Otherwise I won't do business with you.
Stop Buying Brand New Stuff
I understand that everyone wants the new toys. But if you wait 1-2 years you can get a lot of nice things for a lot less than first buyers pay. This is true for appliances, electronics, and cars.
The last time I bought a brand new car it was at the end of the model year. The dealership marked it down a few thousand dollars. But a friend of mine bought a similar car a few months later from a certified pre-owned dealer. He paid even less for his car than I paid for mine and he got a warranty.
Do you own a widescreen TV? How much did you pay for it? Did you know that their prices drop in half every 18 months? Your friends may have all the latest gadgets but I bet you they don't have much cash in the bank.
You can also get some good deals by checking out your local repair shops. They'll sell refurbished appliances and electronics with guarantees. You pay a lot less than you would pay for brand new merchandise. Just check the shop's credentials to make sure they are certified. Ask them if they do warranty work on new items. If they say "yes" then you know they are factory-trained.
Only Buy Groceries When They Are On Sale
My wife decided she could save money this way. I was complaining about all the money we spend on groceries and she said something like, okay, I'll cut our grocery bill in half but you have to give me 3 months and take me on a nice vacation with the money I save.
It was a sucker bet from the start because she had already been planning this. She told me the truth after we started planning the trip.
How does this work? Well, you load up on stuff that is really, really cheap. These are usually items that are about to hit the clearance tables. Or maybe the manufacturer is clearing out old inventory. I don't know.
It helps to have a standalone freezer if you buy a lot of frozen food but that's not always the best way to save money. If you have a good cooler and dry ice packs, you can extend the value of your refrigerator's built-in freezer. Use it for long-term storage and put food you plan to eat in the next 1-2 days in the cooler.
Plan on Buying a Lot of Dry Goods - This is really the only way to make it work. If you like ethnic foods wait until their holidays are over. You'll probably find a lot of deals on items that are no longer hot sellers.
We buy generic breakfast cereals. The kids don't complain because we buy low sugar breakfast foods anyway. And once in a while we buy a 2-for-1 deal on whole grain cereals and oatmeal.
Anything with a long shelf life can be stored in a pantry or even a bedroom closet. We set up corner in the garage where we put food we buy on special. We use sturdy plastic containers to keep the food clean and out of the way.
It Takes a Few Weeks to Get On a Proper Schedule - You either eat a lot of sandwiches to begin with or you gradually phase in the "only buy on sale" strategy. You have to keep a calendar so you have an idea of when foods go on sale.
My wife sometimes uses coupons. I don't know which ones she likes but she usually gets a few dollars taken off when we stock up on certain items.
Cut Down on Sugary Foods and Drinks - Water is cheaper than soft drinks and healthier for you. We keep a few bottles of soda around when we can get them on sale. The kids enjoy an occasional soft drink.
We drink a lot of tea. We don't buy snack foods. My wife experiments with snack recipes and has found a few our kids like. These are healthier snacks and they are cheap and easy to make. There is a crisped rice treat she makes that is kind of sugary.
Cut Back On Going to the Movies
This is one of the most painful changes we've made in our lives. We still see a few movies in the theater but I subscribed to Amazon Prime and we watch streaming movies. If Amazon doesn't have a movie we want to see we'll check the Redbox at the grocery store.
We've saved a lot of money by waiting to see movies.
During the summer when the kids are out of school we'll arrange to take them to matinees for big blockbusters the week after they open. Our local theater offers half-price tickets one morning a week.
We'll also ask the kids to forego the treats. We buy them a nice lunch after the movie.
Saving Money Isn't Always Easy But It's Worth It
We're always looking for ways to save money without feeling like we've made a huge sacrifice. The frugal lifestyle takes some adjusting but it's worth it. We've built up our savings and I don't worry about small emergencies every month.
There have been a few times where I've had to drain our savings but at least I didn't have to use a credit card or take out a loan to get through the emergencies.
I really do wish I was rich. Maybe I'll get there someday. Until then, I'll keep saving the best ways I know how.
