Monday, March 5, 2012

Saving Right Now Series Part 1: Curb Spending Habits, Cut Costs

This post will highlight some of the ways I've used to monitor my spending, spend wisely, and cut costs on simple things in your living expenses.  It should be obvious that your non-living expenses will vary and some people are more willing to cut corners more than others. I'm simply providing options that you can take if you want to save on extra cash.

1. Set Up a Monthly Budget and Stick to It

A lot of college students, graduate students, and even those just getting in the work force can all benefit from determining what you expenses are on a monthly basis and set up a budget that you can stick to.  There's a lot of ways you can do this and there are options both online and within your home that you can use.  I'll mention two of them I've heard of (one that I use right now) that can be crucial in saving you money by cutting down on your unnecessary expenses.

Recognize Your Spending Habits:

Its really important to understand how and when you spend so that you know how to curtail them to what you need over what you may impulsively want. Do you browse ebay/amazon often and make purchases? Maybe cut your browsing to once a week so that you are less tempted to buy excessive goods. You could be saving that money for something even nicer in the future, or saving it for loans/retirement, or a weekend getaway. Whatever you want to save for set it as a goal and don't be thrown off the path because you find somewhat you might like. Sticking to a budget and knowing where your money is going will help you get past those urges to buy things.

Method 1: Envelope Budgeting

This might be an easy option for someone who doesn't have a lot of bills or other expenses that cannot readily be paid with cash.  While I'm not much of a cash-carrier myself (and I'll tell you why in another post), having the money visible at hand can really make you think, "Do I really need this?" The process is simple: get a number of envelopes labeled with expenses that you want to put on a budget, place cash in the envelopes according to the amount you want to set aside, spend the cash wisely (on whatever timeline suits you--monthly, weekly, bi-weekly, etc.), once you have exhausted the cash in the envelope for that expense, you have reached your budget and will not spend anymore.  This budget is really useful for unfixed, non-living expenses such as going out to dinner, going to the movies, going out on the weekends, etc.  Living expenses are typically fixed with the exception of something of the things I will discuss later.

Method 2: Online Budget Websites, Specifically is an online budgeting and personal finance website that has bank-grade security encryption. They partner with several banks (every major bank and even the little guys like my credit union!) to track your transactions, deposits, debt, and investments.  They also have a very simple way to set up a monthly budget regardless of what your expenses are. I personally use this site and love it. They also suggest ways you can cut costs, offer promotions on several banking/credit card/investment options that all culminate in a website that helps you stay financially smart.  You can even upload your student loans and set up a budget that will help you pay off your debt!  Personally I have 2 checking accounts, a savings account, a credit card, and an investment portfolio that I track using and I love it. I can't say enough good things about this website. They even have their own smartphone app! If you haven't heard of it then you definitely need to take a look into it.

2. Cut Back on Living Expenses

These suggestions can often be hard but it will undoubtedly save you hundreds if not thousands of dollars a year. Most people already do them but to make sure I've covered all the bases I will lay out all the options.

A. Lower Your Utility Bills

I know its often hard to remember to monitor your utility consumption but it could really help you out in the long run.  Most specifically there are easy ways to cut down on your electric bill as well as your water bills.  Those are typically the only utilities that most people have that are variable but staple living expenses that have to pay on a monthly basis.

Suggestions to lower your energy bill:
  • REDUCE/TURN OFF YOUR Air Conditioning/Heat! This will nearly cut your energy bill in half for some people. If it really is too frigid, try and put the thermostat to below 70 degrees (or better yet throw on some cozy sweatpants or blanket and keep it off).  If its too hot, you will save more money using a large fan wherever you are in the house than trying to cool down the entire place.
  • Use CFL light bulbs. Compact fluorescent light bulbs are significantly lower wattage than their incandescent counterparts and most electric companies will actually send you a box of them for free. It will save you $50-$70 a year per light bulb exchanged--great savings.
  • Cut off all lights/unplug appliances at bedtime and when you leave your residence. This is a no-brainer and honestly not a hard thing to do. These appliances are power-suckers that still eat at your electric bill while off. Its very convenient to get a power strip/surge protector where you just have to flip the switch if you have multiple appliances in one place.
  • Reduce your refrigerator's cooling settings. Unless you plan to stock up for longer than 2 weeks with perishables or have a full refrigerator all the time, this is just a waste of cooling the empty spaces in your refrigerator.
Suggestions to lower your water bill:
  • Only run your dishwasher/washer once a week (or when full). A lot of (hot) water and electricity is wasted through these appliances which can add up. Maximize on dishes/clothes loads or just be periodic so that you won't do them in excess of what you need.
  • Take shorter showers. Sorry ladies, these make up a great portion of your water bill.  Cutting your showers to less than 5 minutes can save you a great deal.
B. Negotiate Your Monthly Subscriptions/Major Purchases

Call your internet/cable provider and ask them if there are any promotional offers you might be eligible for or even mention that you are thinking about switching to another provider. More often than not they can offer you free upgrades or a discount price on what you currently have, saving you $20-$50 or more a month.  You may even want to mention that you are a AAA or USAA (or other benefits program) that could make you eligible for promotions.  I personally have a discount on my cell phone plan/purchases with Verizon because my family works at the local hospital.  Don't hestitate to ask for offers/discounts in department stores either. It shows that you are willing to go the extra mile and salespersons are typically going to extend something if its available to keep you coming back for return business. It can't hurt to ask and all they can say is no!

C. Cut the Cord (Get Rid of Cable)

Get rid of cable/satellite and enter the age of internet TV.  Most major shows can be viewed from their network websites the day after or on  Go in with a friend on a Hulu Plus, Amazon Prime, or Netflix account and always be able to enjoy your favorite series and movies. There are also other websites that will stream your favorite episodes (most places you can just google "watch [insert tv series] online" and the first few hits will have what you're looking for).  I know that most of you sports fans don't mind DVR'ing or watching TV series online the day after its aired but detest no live sports. Well I'm here to tell you live sports without cable is possible!You can watch your ESPN games/Sportscenter from If you're on a college campus this service is free. If not, you can typically enter in cable/satellite information from a friend/family member and have access to ESPN, ESPN2, ESPNU, and ESPN3. For local sports and national TV networks (CBS, NBC, ABC, FOX), I highly suggest investing in a $20 HDTV antenna from (cheapest, high quality electronics website I've ever found) and enjoy free over-the-air HD quality tv shows and sports games.  By using these methods which honestly aren't that complicated, I've been able to enjoy all the HDTV entertainment I could ask for via a HDMI cable from my PC to my HDTV, saving me $30-$50 a month by "cutting the cord."

D. Be a Smart Grocery Shopper

Save hundreds of dollars a year by following the steps I've mentioned on my previous post, "Grocery Couponing 101," and watch your budget have extra breathing room for savings on food. If you eat more groceries and eat out less, your wallet (and usually your body) will be thanking you.

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