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We’ve all cut things from time to time to make ends meet at one point or another. The lesson that most people that don’t want to learn is that these things are just things and can be replaced again in the future when you are in a better place. It’s so easy to get caught up with trying to keep up with the Jones’ of the world and forget our goals. Or, even worse, we get twenty dollar’d to death with subscriptions and little costs that add up big over the long term.
Today, I just wanted to go through a few things that my family has cut back on in order to make sure that we have enough left over at the end of the month to accomplish our bigger goals. These might not be the same as what you would be willing to cut, but they are simple things that have worked for us over the long term. I’m hoping that you might see an item or two that you might be unaware about, or maybe you might have a couple of suggestions for me.
Please click on the page numbers below to see the different ways I’ve been able to save money by giving up different things.
Cable (TV) vs Cord Cutting
This was a no-brainer for us a LONG time ago. I remember I was paying upwards of $80 a month for cable for around 250 channels and the only thing I would ever watch for the most part was the History Channel. There just never seemed to be anything on to watch for me. The biggest factor into not needing cable TV for me is that I’m not a sports fan. I see how many sports fans are unwilling to compromise, but have also heard of many people being able to get out to friends’ houses or public places to see the games if they really need to. On top of that, you can follow along online quite easily these days.
Basically, now we just use Netflix streaming paired with Google Chromecast/Apple TV to allow us to stream almost everything that we need. The selection is huge and we don’t feel like we are missing out. Not to mention, there are many times when TV just doesn’t even seem appealing to me anymore. If I remember correctly, we cut the cord way back in 2008 or so. I know it’s been a long time.
Car Payments vs Paying Cash for Vehicles
We have been able to cut out car payments for good chunk of time now. The way we did it is just by paying cash for our vehicles. This is one of the reasons it’s taken us a bit longer to get our emergency fund fully funded, but now we have decent vehicles that get us from point a to point b relatively comfortably and efficiently. Driving without having to make car payments is a great feeling. Even when I have a car repair, I don’t fret because it’s much cheaper to just fix the vehicle then just go out and sign up for more payments. After finishing our emergency fund, we might turn our savings towards a car replacement fund before starting to invest, but we have yet to make that decision.
I don’t mind driving and older vehicle for now. We drive a 2001 and a 2004 vehicle and both run great, don’t take a ton of maintaining other then the normal wear and tear and are still worth a little bit. I’m always on the lookout to purchase a newer vehicle if I can get it for a good deal and then I would sell mine but the opportunity has not presented itself fully yet. I can see these vehicles lasting us another 5-7 years easily before we need to replace them with something newer and that is a lot of saved cash in that time period!
Buying Groceries and Cooking VS Eating Out
Another thing we’ve done in our family to cut costs is not eat out nearly as much. First, I will say that my wife is an amazing cook and has really made it her passion to make new and different types of recipes each and every month while still doing a great job to save us a lot of money from when we began.
I remember us spending upwards of $800 a month between eating out and buying groceries and toiletries each month just for the two of us. Now, there are four of us, and we get by on just $625 a month and do a decent job at it. There are months when things can get kind of scarce, and we have to fund some additional money into the food budget, but, for the most part, she is there. That’s a $175 a month savings from where we were!
Not only do we get to reap the money savings, but our health is better for it too. Actually, just recently I started my weight loss journey and have even helped our meals go further by doing better portion control, allowing us to stretch our meals to include leftovers for the next day’s lunch. This has been very helpful in allowing us to save money and allow us both to eat healthy while still being able to bring our lunch.
Shopping Insurance Rates Regularly or When Time to Renew
Every 6-12 months, we get the pleasure of seeing how much we can save over our last year’s insurance rates. We actually use an insurance broker that shops all the rates for us and then gives us recommendations that fall within our guidelines that we follow for homeowners and auto policies. We were able to save $350 last year just by switching our auto provider. I really believe that shopping with an insurance broker rather than an insurance agent is the way to go. The broker will do all the shopping around for you, you just pick what’s right for you.
One of the things that we still need to do is up our deductible for our different insurances. Because our emergency fund is almost fully funded, we can afford to save a little bit of money in premiums by raising our deductible to the $1,000 or $2,500 level if it makes sense.
For health insurance, we are fortunate to be offered an HSA account with our plan. We make sure to put money away each pay period to make sure we are covering our deductible. We try to put more away each year so that we have money saved up and earning extra interest as well.
Paying Yearly, Not Monthly
As we’ve increased our savings, we’ve been able to take advantage of more deals because we have built up margin. Instead of paying monthly for certain items, we opted to pay yearly or every six months to get a deal. This has been great for our auto insurance, vacation fund, and car repair fund through the use of sinking funds.
By looking at the cost of things with a yearly perspective, it allows us to truly see if we want to spend our hard earned money on that product/service. It allows us to get out of that “monthly mindset” of thinking “how much a month”. We should instead think, “how much total”. This has been huge for allowing us to tell ourselves no to things that deter us from our goals.
Buy Now, Pay Later
We’ve completely gone the opposite route from the “buy it now on credit, and pay for it over time”. This was not a good feeling. I remember coming home from vacation that I really had enjoyed. However, I had to figure out how to pay for it because we spent more than we should have. Now, if we want something, we set up a sinking fund to save up and buy it. If we aren’t willing to wait until we have enough saved up, then it’s not worth having.
I had to learn this the hard way with an old television that I had bought. It cost me roughly $1,500 for this 32″ Sharp Aquos 720p LCD TV when they had first come out. I just looked it up on Amazon, and saw that I could buy one used for about $400. It took me roughly two years to actually pay this off. I bought it on a credit card and only made minimum payments for the most part!
This disgusts me every time I think about it. Especially since I bought a 50″ LG 1080p LCD TV for $450 cash 2 years ago. Technology is fun, but almost never holds it’s value. I do still have the old TV, but it’s down in my basement and rarely gets used. I’m sure I could have saved up while the prices were still coming down. I would have gotten a nicer model a little bit later and paid cash for it.
Become More Energy Efficient
One of the hot topics of today is home efficiency. As soon as we moved into our house back in 2010, we made some changes. We switched out all incandescent light bulbs with CFL lights. These cost a fraction of the power but give off as much light. I installed a programmable thermostat for $26. This makes our heating and cooling needs work for us on autopilot by keeping the same temperature all day. We installed energy efficient filters on our bathroom sinks. This restricts water flow so we don’t waste water while washing our hands or brushing our teeth.
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