"If, out of greed or negligence, a man avoids eating even the minimum, he would be stingy with cents and lavish with euros."
E. Topsell: Four-footed Beasts (1607)
An effective way to save money is to reduce expenses. There are others to stretch your euros and avoid having that feeling at the end of the month of "having spent too much". Some of the steps below will require planning and research but will be worth the effort. Others will work immediately. Some will still require a small investment but pay off in the long run. Your ability to accomplish everything depends on how much money you have and how you plan your expenses.
What you need first is a clear idea of where the money is going; then you can look for ways to cut the superfluous and lower the cost of living. Always remember that it is not a question of convenience, but of efficiency. Analyze your needs and do the sums. More important, however, is to understand that reducing expenses involves changing your lifestyle and way of thinking. Never convince yourself that cents are useless.
Steps
Step 1. Determine what you spend on
If you don't know where the money is going, you will probably end up spending too much. You can get a clear idea in just under a month and as you continue, you will see the development of some patterns that you can deal with. Write down everything you buy, down to the last penny. Don't avoid obvious things like rent, utilities, fuel, and food. Include unnecessary things like sodas and snacks as well as chewing gum or cigarettes. Use a columnar ledger, an Excel spreadsheet, or other software to keep the monthly bill. If you use a debit card, the bank will do it for you.
Step 2. Eliminate unnecessary expenses from the routine immediately
While these items are likely not the ones that will save you the most, it's just as important and easy to cut it down. Is it necessary to have coffee on your way to work? How vital are the three drinks or snacks you buy at the machine every day? A cup of home-made coffee costs less than 50 cents, as much as a supermarket-bought soda in packs of 12. Do you really have to rent all those movies (and pay late delivery fees) every month? Have you checked if the library also has the movies or calculated the cost of switching to Netflix or BlockBuster Online? Those ten lottery tickets… the odds against you are astronomical. It's an easy thing to get rid of and mostly it's a habit. It will be psychologically painful at first but when you do the sums and see them in the red, you will immediately notice the difference.
Make a shopping list before you go to the store and stick to it. This is mainly for compulsive buyers. Have you ever gone out to buy a carton of eggs and came back with 15 different products? Did you really need the 2x1 box of chocolate or the giant box of cereal that was on sale? No. You probably didn't even need half of those things but ended up buying them anyway. A shopping list gives you a clear idea of what you need and eliminates unnecessary purchases
Step 3. Let's move on to domestic users
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Heating and air conditioning (gas or electric)]: When you leave the house, leave the thermostat in "away" mode. Don't program it too far from ideal so it won't take too long to reach when you come back: 18 ° C in winter or 27 ° C in summer is reasonable. A programmable thermostat will do the job automatically.
- Schedule it at times around your awakening, such as at dawn for a warm or cool awakening; and in the middle of the afternoon if you arrive by evening, so as not to produce heat or cool if not necessary.
- Consider investing in some ceiling fans - there are even under $ 25 and they greatly reduce your heating and cooling expense by circulating the air more efficiently. If you have little expense and don't stay long in place, you may not have to buy the fan. Electric blankets and mattress covers are also a solution.
- Electricity: Light costs. When you leave a room, turn off the light. The idea that energy is wasted turning on and off versus keeping it on is wrong, because turning on a light bulb consumes as much electricity as the one that goes away in a split second. Energy saving light bulbs work. They are an investment that pays off over time, but they offer a nice saving. (this consumption calculator can be useful). Turn off your computer when you're not using it - (probably) the only reason to leave it on is convenience. Any adapters (including those in stereo components) use electricity even if they are not connected to the unit or attached. Of the total energy used for home electronics, 40% is consumed by appliances that are not turned off. Unplug when not in use or buy something like a Smart Power Strip [1] If you have a set top box with an AC output, plug your TV into it and program it to turn off along with the set top box. For stereo components, plug them all into a power strip that can be easily turned off when not in use. Open the blinds during the day and let the light in instead of wasting electricity. Use it only when needed. Clean the refrigerator motor: if it is dirty, the efficiency of one of the appliances that consumes the most will decrease.
- Water: Save water and therefore, money. Invest in a shower kit - it costs nothing and will save you money right away. It works by reducing the flow in the phone but the change is barely noticeable. Learn to take quick showers - a kitchen timer is great for controlling yourself. Fix leaky toilets and faucets - they waste a lot of water and are easy to fix. Reduce lawn watering to a minimum. If you have a pool, keep it covered when you are not using it to reduce evaporation: if it is heated this will greatly reduce evaporation (heat it just to prevent it from freezing and invest in a thermal tarpaulin). Also, if you don't use the tap, turn it off, for example when brushing your teeth. Do not buy bottled water except in rare and unusual cases: excess chlorine can be solved by leaving the water in a jug in the refrigerator for a few hours; the fluoride in the tap water strengthens the teeth, reducing the problem and the dentist's bills.
- Gas and Miscellaneous: Do the washing machine when needed but as little as possible: for many this is a pleasant step. Reduce the shower temperature by a couple of degrees: the less you run the boiler, the more money you save. Keep the boiler thermostat lower: 48 ° C is the recommended temperature to minimize energy waste and the risk of burning yourself. (Turn it off before opening the panel to fix it.) Use the microwave instead of the oven whenever possible - the cost just to preheat the oven is higher than that of cooking in the microwave. Open your windows when the weather is nice outside to cut down on heating (and cooling) costs. If you live where natural gas is only used in winter, make arrangements with utilities to have it shut down seasonally so you don't have monthly bills fixed linked to the "privilege" of being connected to gas even if you do not use it. If with a manager you pay 20 euros a month, in the 8 months when you don't need gas, you would pay 20 X 8 = 160, but the seasonal closure and reopening costs only 60 euros.
- TV and Telephone: Do you need a thousand channels and every Premium channel available included in the HD package? You can save well over € 100 on TV every month by watching the free one online and save money, avoiding wasting time and unnecessary purchases induced by advertising, by renting DVDs through Redbox or Netflix instead. However, if you have cable internet it may cost you less to keep cable simple than to pay for internet use alone. If you want to save, analyze your priorities well. For the phone, choose the rate based on usage. If you make international or extra-urban calls to friends and family, perhaps an unlimited plan would save you money. If all of your calls are local, you can probably find an option of the essential ones. Consider mobile for out-of-town calls, thus removing the need for landline calls. Consider your IP for Voice-Over (internet phone) as a solution. Some services like Skype, gChat (from Google) and Windows Live! they allow you to make both free video calls to other users and low-cost calls to mobile phones and landlines from your PC - as well as international calls. Other services such as VoIP and Vonage are not valid for those who have DSL, linked instead to the landline.
- Mobile: SMS costs. "But I have limitless ones!" For real? And how much does this option cost you? And do you really need a cell phone? Does everyone have it in the house? Parents should set rules regarding the use of cell phones. Another thing to consider if you need a cell phone is: do you also need a landline? Consider combining them. If your mobile is for occasional use only, think about a pay-as-you-go rate. However, also remember that sometimes 'all without limits' rates can save you money, allowing for instant price comparison and quality verification.
- Mobile Phone Savings Plans: Some are really great for saving money but you have to look for the one that's right for you. Many companies offer them depending on consumption habits, for example: there are those who love to send messages or those who prefer to call. For example, some companies reward you if you top up often a month with hundreds of free SMS, which can be convenient and cost less than making calls. Remember: calls to operators other than yours and to landlines usually cost more. Avoid the "traps" in mobile plans such as excessive rates per kilobyte or per message over a certain amount. Look for a plan that charges nothing or little if you break a roof. There are some that also allow unlimited navigation.
Step 4. Reconsider fuel and miscellaneous for the car:
During the Second World War, when fuel was rationed, a popular slogan read: "Is this trip necessary?" Ask yourself every time you use the machine. Make a list before you go to the store so you don't have to make a second trip. Don't wander around for fun, walk instead or choose other entertainment (for example, read or exercise). Check the tire pressure. Convertibles do more km with the roof up (although sacrificing a liter of petrol to keep the top down doesn't cost that much, especially considering how much you've already spent on the car). A poorly running engine costs a lot - even changing a spark plug can make a big difference, as much as oil. Also, the less you drive, the less often you will change tires, oil and have to do maintenance. Obviously this turns into a savings over time, but it will eventually pile up. Another way to save gas (and therefore money) is to change your driving habits. By going slower or driving less aggressively, you can save a lot of money (). Avoid driving in traffic, which is stressful and not as convenient as using public transport and parking in areas that cost too much. Public transport in cities is often a great alternative.
Step 5. Cut the fun:
It's amazing how many people complain about money then describe the latest movie just out, adding the cost of the cinema to the cost of popcorn. In addition, sporting events, concerts, theater tickets can consume hundreds of euros per couple. Can you tell me the difference (seriously and blindfolded) between a 30 euro bottle of wine and a 5 euro bottle? When dining at a restaurant, think about the prices on the menu first. Consider sharing a meal if the restaurant allows the option. Never, ever order from home - you will needlessly enjoy the expensive food but not the atmosphere, when you could prepare everything yourself and for much less. Look for holiday deals - take the kids camping instead of those expensive amusement parks.
Most people except serious athletes, actors and musicians (if they know) can't tell you the difference between a good performance and a fabulous one. Even if he succeeds, he still prefers variety and frequency. So go to sporting events at local schools or universities, theater shows and local concerts, which are cheap (and you can eat for two bucks nearby) and socialize, contributing to the community spirit
Step 6. Instead of buying clothes and accessories unnecessarily, make them
Rediscover and show off the "lost" ones again in the boxes or on the bottom of the closet and organize it to "avoid" losing them again.
Step 7. Let's move on to food:
the only real difference between a 2 euro can of corn and a 60 cent can is 1.40 and the satisfaction of knowing that you are not paying for those advertisements that make you and others worry about not paying more. (There are of course exceptions: for example, those who have to follow a low sodium diet will often have to pay more). The supermarket is a place where you can save a lot.
- In the US for example, look for those "WIC" branded foods if you want to save money. They have been approved by the American Department of Nutrition and Food and are part of the Women, Infants and Children program. The shrimp ring is cheap and will certainly be tasty. Do you prefer grilled chicken with green beans and rice? Make dinner a matter of experience rather than convenience. It is also possible to spend a lot on cooking at home if you are one who tends to waste money.
- Buy foods on offer, especially meats. Most supermarkets cyclically put various meats on offer - you'll eat them even when on sale. The difference between an expensive beef and another type is only the amount of fat and the softness, compatible with the moderate cooking of the expensive piece.
- Invest 15 euros in a coffee kettle or 100 in an espresso machine (pump-powered are the best but the ones that are worth a lot are ruined like the little ones). Making coffee at home instead of buying one at the bar will save you money.
- Consider bringing your own lunch instead of going out to buy it at every break. Even a sandwich still implies spending a few euros a day: do the math.
- Use coupons whenever you can. Obviously choose those for products that you would normally eat so don't buy stuff that would remain in the cupboard or in the refrigerator until it runs out. You can also buy according to the store's offers or use loyalty cards - when possible - to buy food. However, the store brands are good and often cheaper than those with the coupons.
- Shop at a wholesale. In the United States you sign up as in a club and the cost includes the first expense. The wholesalers have branded products and accept coupons. Also, by not having to shop as often, you will waste less money by risking impulsive purchases. Wholesale shopping should be done with discretion if you want to save money.
- When shopping for meat, look for pieces for which you can identify the area of the body from which it was cut. The usually cheap ground is processed, which raises the price. The harder cuts can be cooked as a stew or in the slow-cooker to make them soft. Even the largest pieces can be cooked whole and then used for various recipes. (Cook until soft, then mince and use it for enchiladas, sandwiches, stews, or soups. Make individual portions, labeled with the meat's name and date, and freeze them.) Offal (chicken, beef, tripe) often they cost less than other cuts and can be used for very tasteful stews and fillings.
- Avoid large packages of fresh products to avoid wasting them: frozen ones last longer, even if they are fruit and vegetables.
- Measure what you use carefully (such as washing powder); don't waste it just because it's sold in large packs.
- Buy products that you will use instead of substitutes just because you have them on the list and there are no others. That box of cereal that isn't your usual brand, will you really eat it or will it stay in the pantry?
- Be aware of the influence promotions have on shopping habits and do your best to realize it.
Step 8. Let's get to the insurance costs:
The fastest way to cut monthly expenses for many people is to cut back on insurance. The companies that sell them are incredibly competitive. Get quotes from various companies. When you ask for them, remember that lower starting premiums are not always cost effective!
- Save with Car Insurance: Check out the premium. Avoid changing company so as not to increase it - analyze the whole plan based on your needs and expectations, do a risk analysis first. If you have an inexperienced driver at home and don't have any savings, a high deductible may not be the right choice. If your car is in installments, you may be required to have a minimum insurance policy. However, if you are a longtime, experienced driver and the car is completely yours, you can consider a higher deductible to save on the premium.
- Health Insurance: Explore the various alternatives. Check out the offers that suit your lifestyle. Think about your needs versus what you have. A single man in perfect health in his mid-thirties might choose a sharing plan that is a little more expensive or with lower premiums, while a married couple looking to start a family might be better off with higher rewards but wider coverage. In other cases, it may be important to have medication prescriptions included. The point is to take a look at what you need to have.
- Life Insurance: This is important to a lot of people. The rule for those with a family is a three to five year replacement income. However, if you are in your twenties and single, consider everything carefully to figure out if you are overly insured. If you are married and in your 60s, have you taken a look at the comparative pension plans? If you are interested in the "funeral" issue, there are very competitive companies in this regard. We would all like to leave something for our loved ones, but without sacrificing the quality of our current life.
- Home (and Tenant) Insurance: It can be the biggest expense and many homeowners have no idea how much they are paying because it ignores home expenses, it slips away from your mind and is out of sight. Review your plan with the insurer. Do you really own stuff worth $ 300,000 in insurance? Also look for any gaps. Is water damage included, snow or hail damage? Think if you need them. Is there anything important that has been ruled out? And something irrelevant that is understood instead? Yes, Great Aunt Marta's rocking chair has enormous sentimental value, but do you need a clause for that too?
Step 9. Consider the items used:
It's a great way to save money by recycling! If you absolutely have to buy something, there are other options than a high-profile store in a mall. There are great thrift shops large and small, perhaps linked to the church or Caritas where you can find incredible deals for everything from trinkets to clothes to household appliances. Think about how much a child's foot grows in 4 years (when it happens, donate the shoes to those who may need them). Look for local sales - the neighbors won't think badly of you because you bought that winter jacket they wanted to give away. Make a sale yourself and you may find yourself selling them something you no longer need. There are sites online that often offer deals (like Craigslist.org, Overstock.com, and eBay.com).
Step 10. Actively manage your credit:
If you are a bad lender, you will pay much higher interest rates and insurance costs over time. You may also miss your job or an opportunity to propose. After studying all the statements of accounts, analyze what seems wrong to you. Pay all bills on time or before the deadline. Salt your credit card and once it expires, don't renew it.
Step 11. Avoid overdraft on debit cards:
The overdraft may seem like a good idea, but it is the first step towards the brink of expenses. Even if your bank doesn't charge interest on the overdraft, it will when you pay it off. The good thing about these cards is that you don't use money you don't have, and an overdraft weakens your finances. Do not do it! If you actually need to have a debit or credit card or overdraft, don't forget to compare interest rates on everything. Consolidate loans by reducing them to the lowest while paying off debt.
Step 12. Save on razors:
If you shave, compare the life span of the razors. Some shave many times more than others, making the cost of each refill insignificant.
Step 13. Avoid or minimize addiction or use of mind-altering substances, which are not only illegal but also expensive; they decrease current and future productivity, cause health problems and impair judgment as well as affect expenses
Alcohol leads to all these consequences.
Step 14. Avoid those items, however beautiful and inexpensive, that have the effect of causing unnecessary expense
For example printers and complete clothes, rarely vehicles, should be eliminated even if not damaged / broken. The culprits include:
- Ink printers (A laser printer can cost less than $ 150 and 2 cents per page, instead of $ 30 or more, and prints on glossy paper faster.) Color laser printers can be cost-effective if you print a lot in color, even if they're not ideal for photos. Printing photos online or in-store is cheaper than printing with inkjet printers, albeit of high quality.
- Suits of wool and cotton that require ironing, unless they are important to your job. Non-iron cotton shirts with a fine texture that hides creases are good looking and save you time, money and laundry fuel. Synthetic pants save on washing and do not cause strange sensations on the skin because the legs are less sensitive than the arms.
- TV and to a lesser extent, movies. The purpose of TV from a financial perspective is to make you watch commercials and worry that you don't own things that you wouldn't mind otherwise. Few of those things are more than frivolous. More insidiously, there's a purpose in getting you watched, which takes time away from other more fun or educational (and potentially profitable) activities. Many films focus on an extravagant and luxurious life by creating a state of mind in viewers that is incompatible with the concept of frugality.
- Nice cars. The faster ones accelerate twice as fast, turn a third stronger, have more beautiful and shiny seats than ordinary cars. The differences are much more subtle. Mass market cars such as family cars or minivans and professional driver vehicles are optimized in terms of cost, comfort, fuel consumption, safety durability and ease of maintenance. The more expensive ones, even when not driven beyond capacity, often require great sacrifices in these areas, in the name of small improvements in others. They also require higher overheads due to lower sales volume. If many people where you live change cars unnecessarily, a well maintained and carefully evaluated one could save you a lot.
- Video games and other branded electronic components. They might seem inexpensive and a good deal if one is sure they just want a couple of games and accessories. However, adapting them to various games or other would require extra costs each time. The computer on the other hand has many games even for free, especially once they are no longer considered 'novelties' and are made available for free by their creators such as Nexuiz.
Step 15. Avoid Excessive Household Expenses
It is important to live in a quiet area and to send children to school where there is no risk. If you like large gardens and large windows or proximity to several shops (certainly not useful for frugality, like neighbors who live extravagantly and beyond their means), admit it and be prepared to pay. A house obviously slowly deteriorates with rain and bad weather, while you enjoy it (hopefully) and can be changed or reproduced within a few months, with increasingly efficient methods. There are many spaces available and sparsely populated areas can become economically competitive with time and development. As recent history shows, it's not a "big investment" but it has substantial value and some manage to make it profitable.
Advice
- Think about each expense before making it. Ask yourself if you really need it or if by chance you just want it. Don't you already own something similar? Is it good quality or will you have to replace the item after a couple of times? More importantly, are you willing to sacrifice your savings goals for it? If something is superfluous, say no.
- Stop using paper napkins and handkerchiefs. Those of cloth absorb equally and can be used several times. They clean even better than paper.
- Use the 24 hour rule. Before making a non-vital purchase, wait 24 hours.
- If you subscribe to non-essential services like satellite radio, be prepared to cancel your subscription. Call their subscription service and explain what you intend to do, they will make you bounce from one person to another but don't give up and always repeat that you want to cancel the service because you can't afford it. If you insist they will offer you a discount, one of the substantial ones, to persuade you not to cancel because it is easier for them to keep a long-standing customer than to find a new one. If they don't offer you anything, cancel everything and save.
- Stop smoking. Apart from the extra 250 euros per month, there are huge additional costs for health and life insurance (but perhaps also for car and home insurance) and a huge (almost guaranteed) potential for extraordinary costs in the health sector..
- Cultivate the vegetable garden. Even a small piece of land can pay off with lots of fresh vegetables. You can of course spend a fortune at the seed shop, but ask a few neighbors who grow their own for advice.
- Limit alcohol.
- Isolation. Insulating the attic, the walls (including external electrical outlets) will save you money over time. Check the gasket around the exterior doors. If you can see the light filtering between the frame and the door, buy a roll of adhesive sealing foam and close the openings.
- Consider investing in recyclable items. Rechargeable batteries for example, an excellent option if you consume a lot of them - the question you have to ask yourself in this case is: why do you have a high consumption and how can you reduce it?
- Use cotton handkerchiefs when you are not sick. If you wash them they are better, cleaner, more hygienic and comfortable than paper ones.
- Measure your energy consumption. Electricity monitoring is an effective means of taking into account the actual consumption of your network. It shows you in an updated way how much energy you consume at home, translating it into money and kilowatts. Some studies have shown that the use of this information saves you from 10 to 20%.
- Stop betting. If you are someone who tries the day of gambling (unless of course you can make some nice winnings after taxes) … stop. The odds of winning the lottery are around 150 million to 1.
- Recycle and reuse. Plastic shopping bags are great for garbage. If you want to become efficient, consider other suggestions such as storing the cooking fats (those over 50 already know this) or reheating the leftover coffee. If you want two cups of tea in the evening, one sachet is enough.
