Having a household that has been a single income home for almost 15 years, being frugal is not an option. There are plenty of areas you can cut, minimize and even some you just can't. Minimizing your financial load, and learning to save on a single income is a chore. It is something that you have to work at. You have to adjust your thinking, adjust your finances, and adjust your attitude. In my household, it is a constant learning subject. We are still learning and thanks to sites like Pinterest, Google and a desire to learn and seek out professional advice; we are learning and sharing it with our children. They are the next generation, and teaching them the importance of fiscal responsibility is as important now and it has been throughout the generations.
Here are a few tips/tricks that we use, and some that other sites have brought to our attention as viable options!
Tip 1: Learn how to budget!
Make an inventory of your monthly expenses, your monthly income and review your expenses every pay period to see where you can make changes to allow expenses to be significantly lower than your income. The goal in our home is to keep expenses 20% below our average monthly income. This would allow 10% to be saved for other needs/expenses and 10% for entertainment. Finance professionals will tell you, you should take 10% of you net income every pay period to save, before paying any expenses.
Tip 2: Plan for annual payments when possible.
Vehicle insurance, home insurance, and even some loans; can be paid annually and save money. Taking the time to investigate your options can save you hundreds every year. Even though this may not seem significant, every penny counts. While some loans, with lower interest rates, make more sense to pay annually; some financial institutions will allow other loans to be broke down into bi-monthly or even weekly payments.
Tip 3: Learn how your loans work!
This seems to be a common sense thought to me, but it may not be for others. Learn how your interest accrues. If you compound interest on your loans on a daily basis, making weekly payments will keep your interest amount down, while in turn, helping to lower your principal balance. If you have a $500 payment due monthly, $47 of that payment goes towards interest, the remaining $403 goes to principal. If that same $500 payment and $47 interest can be knocked down by breaking your payments down into weekly payments. Instead of accruing a months work of interest, you are paying the interest that accrues each week. Breaking your loans into multiple payments will literally save you thousands over the life of the loan!
Tip 4: Purchase Christmas gifts throughout the year.
Yes, I know we are just past Christmas, and many bought gifts on credit and now look forward to paying it off just in time to do it again the end of the year. Here is a little trick that I did for several years, but got away from. Buy stuff throughout the year. The easiest way, Every pay period, beginning right now, purchase a gift card. Whether you give those gift cards as gifts or you use them when the time comes for your shopping...you are spreading the cost over the entire year, and no more living on credit! IF you are paid weekly, grab a $20 gift card each week. This takes just a small amount of planning, but it's worth it! Figure out your gift buying list now. Figure out your planned budget for your shopping, and divide it out over the number of weeks from now until you plan to shop. Example: As I write this, there are 47 weeks until Black Friday. A $20 gift card each week, will give you a shopping budget of $940.
Tip 5: Meal and Grocery Plan.
This can be tricky, but with a little effort, will save you hundreds on your grocery budget. I plan our meals out, a month at a time. I look for cost efficient meals, some of our favorites, and a few new recipes, each month. I buy bulk whenever I can. We are fortunate to have a local store that is size comparable to the old Wal-Mart, and price comparable to Aldi. I buy flour, sugar, spices, and produce in bulk. We also garden, preserve food and raise a large part of what we eat. Where my grocery budget has been higher with 2 years of poor gardens, a regular garden year, affords me about $50 per week for groceries. As I said, our budget has taken a hit with bad garden years 2 years in a row, so it is now averaging about $100 per week. Keep in mind this is for a family of 4. I make a majority of everything from scratch, so there is more time involved, and we rarely eat processed foods. By planning your meals, making a grocery list for the meals you have planned and allowing for staples that you must buy fresh, you save time and money. Making frequent trips to the store always ends up costing more as you purchase more than you need. I shop once a month for the main groceries, and items that must be purchased fresh(i.e. milk, bread and some produce) are picked up as needed with a fast trip in to the store. Going directly to department that has the items needed, and only getting what is on your list, will save you a TON!
Tip 6: If you can't pay cash for something, you can't afford it!
This was a hard lesson to learn, when we live in a society of loans and credit. If you purchase a $200 television on loan or credit, that television will end up costing you double. Why not save for a short time, and just pay cash?! Sure, I understand that items such as a home or vehicle is usually not an expense that can be saved for...without many years to do so. For these types of items, refer back to tip #3. Know and understand how your loan/credit will work, if your financial institution will allow for payment break downs, extra payments without fees, and most importantly...your interest rate!
Tip 7: Learn or be willing to barter/trade.
This was a way of life for many generations. I think too many of us have gotten dependent on markets having what we want, and the ease of paying our hard earned cash and going home with it. The way it works for me, I have connected with some amazing women who have multiple areas of interest to me. In turn, I am willing to trade what I have too. Everything is fair game in trading/bartering. For us, it's eggs, milk, fresh produce, books, learning/teaching new skills or trades, and establishing an amazing friendship. There are many willing to trade services, ideas, goods or any number of other things. There is no shame in being fiscally responsible!
Tip 8: Compare prices.
This has brought on so many extra and unnecessary steps for some. The coupon rage, the free sample rage, and even stores willing to beat competitors prices. For me, I save every grocery receipt. I keep a stack of each store that I shop at, and then I have their prices to compare to others. I get the new sale ads each week for all the stores, and when I am ready to shop, I compare the sale price to the regular price, I figure in the time and fuel to drive to the different stores to see if a cheaper price will actually be cheaper overall. I avoid the big stores, such as Wal-Mart. It is too distracting to walk through that store and not overspend on items that were not on my list. Be willing to take some time to save yourself money.
Tip 9: Take a look at your monthly expenses.
Looking back at Tip #1, many times we don't realize that small increases over time add up. Look at each expense with a fine tooth comb. Can you turn off a few lights, or the television at night to cut down your electric bill. Or lower your thermostat a few degrees to cut down your gas bill. Look at your cable/satellite bill too. This has become one utility that seems to keep increasing. For us, a few years back, we switched from Directv to Dish Network, after the first company bill kept increasing the longer we had it. Now that we have had Dish for a few years, our bill has now increased to what we were paying with Directv. I recently learned about a department in all these companies called Customer Retension. This department is authorized to lower your bill with their hopes in retaining your business. This is one area I will be looking into this month. Our cell phone bill is another that has become a finance eater! We switched from no-contract phones, to a contract to get better phones. Not a wise move. We are now paying $100 more each month for the same crappy service, but we have smart phones. There are a multitude of options now, for no-contract companies. Many offer unlimited talk, text, and data for around $50 per month. Our contract phones are $89. Obviously, the grocery expense can be worked with, with a little planning, as can insurance costs. Don't be afraid to shop around, compare prices, and if all else fails...drop the expenses you can.
Tip 10: Live Simply
Don't try to live up to what others are doing. Remember how fun and amazing some of the simpler things in life can be. A picnic lunch, a stroll by a river, entertainment in parks and recreational districts, or a simple walk. There are beautiful state parks in every state, hiking is great exercise and free entertainment. Get together with friends for a bonfire, deck party, etc. Have everyone bring something to share for food or drinks, and you can be social without all the technology. Take time to stop and breathe.
As the year progresses, I will share more tips/tricks on living frugally. This will include my gardening, photography, furniture building, finances, and more. Let's get a jump start for a great 2016!
Salli
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