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Life on a Budget: Easy Tricks to Save $$

1 Oct

 

Life after college is kind of weird.  If you’re like me, you’ve made the switch from your hourly jobs and parents supplementing your income to a big girl salaried position and a whole new slew of bills.

My dad always told me that you should aim to live on half of your salary.  That way, you’ll never live outside your means and have an easy way to save money.

Now, I’m not quite there yet.  Maybe when I had a roommate, it was easier to do that, but it’s not that simple when you live (and pay all the bills) by yourself.

Here are some money saving tricks I’ve figured out.

1.  Television:  I had bundled internet and television with FIOS, and my bill was roughly $140 a month.  (This was including HD, HBO, and a HDVR to record shows.)

But, lately, I’ve noticed my television watching has pretty much screeched to a halt.  I rarely have time to sit in front of the TV and catch up on my shows, and I found that whenever I did want to watch something, I would pull it up on my phone or laptop.  With services like Hulu Plus and Netflix, pretty much anything I want to watch is available when I want it (and for cheaper).

So, I broke up with FIOS TV (but kept the blazing fast internet).  I still can watch everything I would want to by using channel sites and subscription services, but where I was dropping $140, now I’m only paying $70.

Savings per year:  $840.

2.  Utilities:  These bills include Electric, Water, and Gas (at least for me).  There’s always a fluctuation with these.  In the summer, my electric bill is usually around $90 to pay for all the A/C (and my gas is maybe $20), but then in the winter, my gas soars to the mid $100s while my electric drops to $30-$40.  (Water usually stays pretty consistent with $30/month.)

Some ways I’ve figured out how to save money on my utilities:

Electric:  In the summer, I can not sleep when I’m hot.  I’d rather pay a little more for a good night’s sleep.  But, you don’t need to keep your house cool while you’re not in it.  It can be annoying (especially if you have a manual thermostat like me), but on days I know I’m not going to be home until late that night, I’ll turn the air off and make sure all my shades are closed.  Then, when I finally get home, I’ll jack up the A/C again so it’s nice and cool by the time I get to sleep.  I figure I could save even more money by just using a fan when I sleep, but for now, this works.

Also, do what they taught you in Sesame Street as a kid:  Turn off your lights!  Seriously.  When you leave a room, turn off the light.  When you finish using something, turn it off and unplug it.  Did you know that leaving things plugged in (like game consoles, cell phone chargers, etc) still use electricity?  Just unplug it when you’re done.

Gas: My home uses gas for heating, and this was the source of some of the only disagreements my roommate and I ever had.  In the winter, I keep the heat on low (or on at all).  It’s easier to bundle up when you’re sleeping than to blast the heat all night and spend hundreds of dollars. If you live in a place where you have horribly cold winters, then this might not be as pertinent for you, but living in the Washington DC area, we have pretty mild (but sometimes still cold) winters.  Invest in some down comforters, warm pajamas, and heating pads.

Water:  This is pretty no brainer.  Don’t take super long showers.  Hand wash your dishes right after you eat rather than run the dishwasher all the time.  Make sure you do full loads of laundry and not small ones.

Keep an eye on your bills too so you can see which tips work for you.  Even if you only save $20-30 a money from all three combined, that still equals $240-360 a year!

3.  Shopping:  Ah.  This is a hard one.  I don’t spend a lot of money on movies, or eating out, or entertainment.  I’d rather spend it on shopping.  I’ve actually gotten to be an expert on getting the most bang for my bucks.  Here are some of my best shopping tips (picked up from years of both working retail and buying retail).

Don’t buy anything at full price unless you know it will sell out.  When I worked for J.Crew, I learned that it was so easy to want to buy all the new pieces that came out each season.  But, one of the personal shoppers told me to always wait for the sales.  Sales are inevitable, and they’re pretty frequent.  Unless it’s a special piece (like a designer collaboration you know will be gone), wait for the sale.  It’ll still be there.

Sleep on it.  I swear by this one.  Don’t buy things out of impulse or boredom.  If you find something you really like, put it back and wait a day (or three).  If at the end of your waiting period you still want it badly, then go back and get it.  But, if you find yourself forgetting about it, then don’t waste your money.  Many times, we buy things because we WANT SOMETHING NEW RIGHT THIS SECOND.  You don’t need it.  Put it back.

Work out your cost per wear.  If you’re going to spend money, figure out how much you’re actually spending.  If it’s an amazing winter coat you’ll wear a few times a week all winter (and the next winter, and the next), then buy the coat.  But, if it’s a pair of killer heels that will be great for a party…and maybe a party next year…then don’t spend the money.  It’s not worth to spend tons of cash on the next new trend.  Instead, go find something you can wear season after season.

Lastly, pick a budget and stick to it.  My friend Fran does a great series on budgeting every month, and it definitely inspires me to try to do the same.

4.  Easy Saving.  Use a site like Smarty Pig or Mint to easily save money.  They function like an online savings bank where you can add certain goals and the site automatically withdrawals certain amounts to meet those goals by a certain time.  For instance, for my most recent vacation, I knew I was going to want to hit the outlet malls hard.  So, a few months prior, I gave myself a budget goal of $500 for vacation shopping.  The site withdrew $48 every paycheck and put it in an account.  I didn’t miss the money since it came out right when my paycheck was deposited, and by the time vacation rolled around, I had a nice little nest egg for guilt free spending.

I also have a portion of my paycheck automatically deposited into a regular savings account.  Many companies, when you fill out your direct deposit paperwork, let you designate where the money goes.  A fixed amount is automatically put in a savings account every single paycheck, and the rest goes to my checking account.  It’s saving without having to think about it.

Lastly, make sure you’re taking full advantage of things like HSAs (health savings account) and 401Ks.  Enrolling in your company’s HSA plan (if they have one) is a great way to basically get free money for your healthcare bills.  Same with 401k–if your company has a percentage that they match, then always contribute up to that percentage.  (I think my company does something like 3%…so I contribute 3%.  So my $60 a paycheck turns into $120 into my 401k account.)

A lot of this stuff can be confusing, so talk to your HR department to make sure you’re taking full advantage of everything.

5.  Healthcare.  I think healthcare is an area where many young women can lose money because they don’t fully understand their plans.

While the world of health insurance is a vast wide one, I’m going to address the two main options we have.  If you have a full time job, chances are you have health insurance options.  Many times, you have two choices to make–a high deductible plan with small monthly payments, and a low deductible plan with bigger monthly payments.

If you’re unsure how deductibles work, here’s a basic run down.  Let’s say you have the option between a $1500 deductible plan where you pay $50 a month. Or, you have a $500 deductible plan where you pay $80 a month.  What’s the better option?

Well, it depends on your health.  If you’re someone who rarely goes to the doctor, then you’re better off choosing the high deductible plan.  Why?  Because, the deductible is the amount that you must pay out of pocket before your insurance starts picking up the rest.  So, if you have one or two doctor’s visits a year, you might have to pay a large percentage of that visit out of your pocket.  But, because your monthly costs are lower, you’ll end up saving more money than if you had the more expensive plan.  Think of this plan as more of an insurance against something terrible happening.

I had a plan like that until I realized how much I actually go to the doctor.  Things like bi-annual dentist visits, annual skin cancer screenings at my dermatologists, chiropractors for back pain, etc–all those things add up.  Last year, I paid the majority of my bills out of pocket before my deductible was satisfied, and by the time that happened, I was at the end of the year and my deductible was about to reset.

So, I switched to the more expensive plan per month, but met my deductible quickly enough to where my monthly costs were offset by how much I was saving in bills.

The world of health insurance can get confusing, so again, I would recommend talking to someone in HR, your parents, or even your doctor.  Yes.  Your doctor.  Contrary to popular belief, doctors get just as fed up with health insurance issues as we do, and they can be sympathetic to your hardships.  When in doubt, just ask.  Most doctors have specific administrative staff that deals with insurance companies every day.  They should be able to help you out with questions about your deductible.  In a recent personal example, I had a hefty chiropractor bill that was coming.  It was high–like $1000 high–and my current deductible was $1500.  All those bills were going to have paltry insurance payments, and the rest would be my responsibility. When I expressed my concern to the chiropractor staff, they were willing to negotiate with me.  I ended up paying $500 straight to the doctor and saved a few hundred dollars in the process.

Do you guys have any ways you save money?  Let me know!

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2 Responses to “Life on a Budget: Easy Tricks to Save $$”

  1. Crishana October 1, 2012 at 12:06 pm #

    Great post and sage advice for anyone, regardless of age or income bracket.

  2. franishh October 2, 2012 at 8:00 pm #

    that was a pleasant surprise – thanks for the shout out! I’ve been struggling to keep it together money wise. Like you, I don’t really go out much/go out to dinner, so shopping is my go to. Having my budget for clothing has really helped, but right now with application fees for school, I’m still paycheck to paycheck. Hopefully with the next tax return/bonus time, I’ll be able to get back a little of that bumper

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