It's not just Christmas that's expensive. Everything is expensive. It seems that a big chunk of our lives is taken up by trying to fend off those that want us to part with our money. From adverts, to magazines, billboard posters to spam email, we're being tempted every day to spend our hard-earned cash. Leave us alone! Most of us don't have that much money and we often need to juggle our finances just to get by.
Today, we ask you for your prudent financial advice. What tips do you have regarding the art of making your money go further? What's the best way to save and invest to make your money work for you? What's the most cost-saving way to borrow money so that you can avoid serious debt? How can we use our little pounds, Euros and dollars to the best effect? Indeed, how do we make a little money go a long way?
Switch it Off!
Everything that uses electricity, gas, and so on, if you're not using it, switch the damn thing off. You have no idea how much you will save if you use one less lamp every night.
A lot of people have multiple televisions, and most of the time they leave them all on stand-by, which costs money. Instead, when you are not using them, switch them off. Also, when you have shut your computer down, remember to turn off the monitor.
Save a Little Every Day
It's best to save a little money every day, even if it's just pennies. If (and it's a big 'if') you can put away £1 a day, you'll end up at the end of the year with a lovely sum of £365! That's enough to have a comfy Christmas/holiday period.
Also, save up all the loose copper1 that's left lying around and put it into a big container. When a rainy day comes you will be surprised at how much you can actually take to the bank to get exchanged into larger units.
Save Money on Entertainment
If you have a library card, you can save loads of money by checking out movies and music, and of course books at the local library. This service is sometimes free (at least, inexpensive) and you will be surprised how much you can save this way.
Our local libraries charge £0.50 for music and talking books which you can take out for seven days. They charge £1.00 for a VHS for, I think, three days.
Give Up Smoking...
... or cut down a bit.
I gave up smoking about three years ago, and one of things I did to make it easier was to actually put aside (in a jar) the money I would have spent on fags2 each day. I was amazed at how quickly it built up. Because I thought of fags as an essential I didn't really consider the cost.
If you are a 20-a-day smoker you are spending (what do they cost now, £4?) at least £28 a week on them. If you can get by on ten-a-day you are saving quite a hefty chunk of money every week.
Saving a little here and there is no good if you are 'leaking' quantities elsewhere! Set out a realistic budget; your outgoings and incomings. Where costs are variable (electricity, food, water, telephone, etc) take a good look at where you can make savings.
Food - I used to get the older fruit and veg that had been discounted. Even the ones that looked a little soft I could use in stews, compotes, etc. Hey, sometimes overripe bananas are great (in cakes, etc). Also, I used to buy 10c instant noodles (no name brand or from Chinese shops). Other staples such as rice, potatoes, and bread are all cheap and can be made into more interesting concoctions with a bit of imagination or low-cost cookbooks.
Electricity - Turn off lights in rooms not being used. You'd be surprised how much this saves. Also look at power usage and ratings on electrical appliances, and only go for ones that are efficient.
Water - Don't leave it running if you can possibly help it. For example, when you are brushing your teeth. Don't use automatic dishwashers as they waste heaps of water. Front-loading washing machines also use less water. I also put a half-brick in my cistern so it didn't fill completely (You're talking to a girl whose mother grew up on a farm during some pretty bad drought years!). If you wash your car, use a bucket, not a hose, and wash it on some lawn and kill two birds with one stone. Also, water your garden early in the morning or in the evening, as you won't need as much to compensate for the Sun's evaporative power.
Entertainment - Library cards, discount movie nights, free entertainment at local clubs/pubs. Community amenities are sometimes free, or cheap, although this is changing. Go for a walk or picnic. Sydney has free festivals in the summer, which I would imagine holds true for most cities. Also, look out for last-minute concert tickets, you can get some great deals.
Transport - Try to walk where you can, instead of taking the car, getting taxis, buses or trains. You'll also save on gym fees I have been doing this for a while now, walking to my local train station instead of catching the bus, it takes me 15 minutes each way, but I save $12 per week ($624 per year). It has also helped me lose around 13kg in the past three months!
Presents - If your friends and family are like mine, it's the thought that counts, not the price tag. And most folks appreciate a homemade gift that has shown some thought put into it, rather than someone just rushing out to buy the latest 'thing'.
Clothes - Vintage has come back in fashion, so get scrounging! Also look in your local papers or yellow pages for Discount Factory Outlets, where you can pick up the latest season styles for a fraction of the cost.
General - Always ask for a discount for cash. My husband does this everywhere, and you would be surprised at how often we get good discounts. Sometimes it can be embarrassing, but what's a bit of a red face when you save $100 off a car alarm system, as he managed to do recently?
Telephone - Keep tabs on the local calls you make, as well as STD and overseas calls. Mobile phones are a killer. If you can't afford it, don't go there! I have seen young kids saddled with huge debts on these. If you can't control your urge to be constantly in touch, then they are not for you! A great side-effect from monitoring telephone usage is you can dispute your bills if you think they are being padded. This happened constantly to my mum with Telstra (Australia's largest provider) and she has kept a book next to the phone for over a decade now, and was able to dispute a lot of call costs (number of local calls, mainly). The first year she did this, our phone bill came in at around 15% less than previous years!
Limit the number of credit cards you carry. One is convenient, ten is an illness.
We struggled for years to get to a point where we paid off the credit cards each month to avoid interest charges.
I've one thing to say about getting a credit card: don't. Debit cards are much safer, since they only allow you to withdraw money that's in your account, ie, you can't spend money you don't have.
Although, Credit Where Credit's Due...
However, to take advantage of the convenience of a credit card and avoid spending money twice, write a cheque to the credit card company each time you make a credit purchase, save up the cheques to send in at the end of the month. (don't purchase a non-vital item that you could not afford to write a cheque for by the end of the month).
On the other hand, my wife and I use the Discover card, a credit card that pays us 1% of everything we buy. We pay off the balance religiously every month, so have never paid a finance charge. And we pay for everything we can with it - groceries, gas, everything - so we get a nice cheque once a year for a couple of hundred dollars.
You Can Only Afford to Buy the Best
Don't buy rubbish because you can afford it. Make do and wait until you can afford to buy quality. Or, as the saying goes:
Buy cheap, buy twice.
Buy well, buy once!
That's the advice I gave my son. Always buy the best you can afford to have. Don't settle for crap. Save up a little longer.
Learn to Cook
It's amazing how much cheaper it is to buy raw ingredients from cheap shops than 'ready' meals from convenience stores. For example:
My housemate has just spent £3 on a macaroni ready-made meal for one. For half the price, I could cook enough macaroni cheese to feed all four people - flour 9p, milk 34p, pasta 36p, and 60p for half a lump of cheese.
Amen. The price paid for convenience is phenomenal. My wife and I also cook a large batch of any recipe - no more effort than making a small batch - then freeze individual portions in plastic containers, single serving size. There's just the two of us, but the frozen meals last many months. And of course, if the store has a really good special, we buy a lot and freeze the raw food - like chicken breasts, pork tenderloin, etc.
Homemade is also better tasting and more nutritious.
We do the same thing, huge stews, buy in bulk whenever we can. We don't have much storage or freezer space, so we're a little limited, but we do what we can. We found a store here that's much cheaper than the big chains, and their produce, meats, and house brands are excellent. Saves us about 1/4 of our usual food bills. Shop around, and watch the flyers is more good shopping advice. If a store at the other end of the city has a worthwhile special on - hop on a bus if necessary. It'll give you an outing, and you can take advantage of the price break. With the money saved, you can probably go for a coffee and a treat while you're out.
Rice is a staple in so many parts of the world, and with good reason. It's relatively cheap and a little goes a long, long way.
Chicken is wonderful when the budget is tight. And here's why...
Meal One - Roast a chicken, stuff it with a peeled onion, and cover it with oil and seasoning. Then roast some 'tatties3, and boil some carrots and cabbage/greens. Also, making gravy from the residual juices is the best way. And make sure you make too much of everything.
Meal Two - Leftover chicken plus bubble and squeak4 (so again, roast too many potatoes, boil too many carrots/greens). The same night get the chicken bones, any leftover gravy, and put them in a large saucepan with any leftover vegetables and make a stock. Bring to the boil, skim off the top, then reduce the heat and simmer for four hours. Don't ever let it boil dry
Meal Three - With your stock from the previous night make a stew (eg, kidney beans, a tin of tomatoes, more carrot, more potato and cabbage with curry powder). The cunning cook, by making too much, and adding more ingredients the next day, can make it last for two days.
So, the total shopping list for four day's meals can be one chicken, potatoes, onions, carrots, cabbage, a tin of tomatoes, and some kidney beans.
You can save a ton by giving up Starbucks, or whatever your source of ready-made coffee is.
I generally make a carafe of coffee in the morning. I take some to work in a thermal mug. Hubby has some when he gets up - that's about half a carafe down. Then we dump the rest into a pitcher and keep it in the fridge. Drink it cold instead of sodas or on mornings when I'm too rushed to make a fresh carafe. A pound of good, whole coffee beans costs a little more than two Starbucks drinks, and lasts for at least two or three weeks, depending on your rate of consumption.
A bit of good research on the Internet shops can save more than a few dollars (or pounds) on holiday shopping, or any shopping for that matter! Internet sites don't charge quite as much because they don't have the same operating costs that traditional stores do. Always be cautious, though, some Internet stores are nothing more than scam sites where you will never get your merchandise but they will get your credit-card number! As long as you use a little patience and some good common sense, doing your holiday shopping on the Internet will take a smaller toll on your car, your body, and your wallet!
Insulate Your Home
Maybe get some help while you're at it:
Go to this site and find out if you can get a 'warm front' grant to insulate your home. We got our loft insulation and draft proofing done... it took a couple of months for them to get round to it but I can't fault them, our house is now toasty (what with the new boiler, foilbacked rads, cavity wall, loft insulation and double glazed windows). The paperwork is really easy to sort out too. Apparently there are also grants for insulating houses over a certain age but I can't find a link for them.
Here's a comprehensive plan of attack for those who have very little money:
Make shopping lists. Start on Sunday. Every time you think you need to go and buy something, don’t. Write it on a list, then take that list out on the next Saturday and only buy the things on it. This will ensure that there is no wastage on junk you don't need. This rule is especially important to those people who pop into shops to get things going into/coming home from/in lunch break of work. This often results with impulse buys and things that are not really needed, such as paper to read on bus, sandwich for lunch, etc, etc.
Don't go out in the lunch break. Taking sandwiches is a pain, but think of the savings in just a month (£3 - £5 per day, that's £15 - £25 per week, that's £60 - £100 per month). There are plenty of interesting things that can be done in a lunch hour to take one's mind off crappy homemade lunch food:
Try reading the news on the Internet, or your horoscope, or your favourite comedy site or TV channel site.
Take a pen and some paper and write a letter to a friend.
Play a game with a co-worker, a game of chess or backgammon might last a weeks worth of lunch breaks.
Read a book.
Clean out your desk drawers.
Find things to do at home. There are many things that can be very satisfying, which don't involve going out:
Don't go to the pub, but invite some friends round for a drink (especially good if there is booze left over from Christmas).
Record one of those oldie films they show in the daytime and watch it in the evening, you might be surprised at how entertaining it is.
Do your spring clean a bit early.
Do any DIY you've been meaning to do for ages.
Do something creative, for example make gift tags from all your old Christmas cards.
Write a list of things you are going to get your friends and family for Christmas presents next year. Then you can keep an eye out for them in the sales.
Write thank-you letters for all the gifts you received this year.
Look on the Internet for interesting meals on a budget and add the items to your shopping list.
Re-arrange your furniture.
Spend an evening listening to all your old tapes, CDs or records.
Plan a summer holiday. (It doesn't even matter if you aren't planning to go on holiday, just thinking about it can be very uplifting).
Play a favourite childhood game.
Go for a run or a walk (do this at night, so you are not tempted to buy a drink on your way – or take one with you).
Make a list of interesting things you can do at home and do them!
You might be amazed at how much you can save, and more amazed on the amount of money you usually spend on things you don't really want or need. Also, a knock-on effect is that fewer journeys might have a considerable impact on your usual travel costs.
Have fun staying in, and remember, it's cold outside in the winter. And that's another good reason to enjoy staying in.
Limit Flat Rate Expenses
Take care when signing up for optional services with a flat monthly rate, like DSL, or cable TV, or a cell phone contract. These amount to an entitlement to the service provider and make it hard to control costs in a crisis. Find out where the real expense in a system is. For example the most expensive part of an audio system is the CDs. Better to pay more for a reliable player and always get bargains on the disks.
Electronics items can cost almost as much to repair as to replace. But this doesn't mean you should buy cheap and replace often. It could mean that you should spend some money on reliability up front to avoid expensive repairs or replacement later.
After subsistence costs, focus your resources on what's important to you.
I have thousands of books, but have never spent more than $16,000 for a car. I would rather have a powerful computer than a big television. Vacation costs can be disastrous, we like camping, so we only stayed in hotels in emergencies.
Learn to make things yourself. Raw materials are often cheaper than the finished product and you get to control the quality.
A Recipe for Life?
This is excellent - one person's lean-living life philosophy. And very generous of them too, to share it with us all!:
May I submit prioritising and possession purges? At least twice a year, we go through everything that belongs to us, work out whether we use it or are 'likely' to/if it fits/if we really think we'll read it again/insert-appropriate-criteria-here; if it doesn't have a function or give genuine pleasure on a regular basis, away it goes - to family and friends if they want it, to recycling bins, to charity shops or church bazaars, second-hand bookshops, etc. This was horrific the first couple of times - how did we accumulate so much junk? But it meant that:
a) we could see the floor
b) we had a place for everything
c) we had a good idea of what kind of thing we actually needed and what kind of thing to avoid buying in future
d) we felt really liberated and smug.
It's amazing how having fewer possessions in the first place is freeing. We repeat the process regularly, and it's less painful every time.
Wow! Lifestyles of the not-so-rich-and-famous. And they seem much happier for it, too.
Use Charity Shops
You can get some great things from Charity Shops, clothes, toys, games, household items, electrical items, furniture and you'll also be helping a good cause as well as helping your own finances. Charity Shops are also where you can send those unwanted gifts. But avoid those cheap shops with loads of cheap mass imported rubbish that probably won't last five minutes. Most of these products are not bargains, just a waste of money.
It's amazing what you can find in those places - sometimes nothing but tat; other times you can find absolute gems. A friend of mine was approached recently and asked where she bought her clothes; when she said 'Well, I get them at the thrift shop - this outfit cost me less than $20' the response was 'Oh. Don't you mind wearing other people's cast-offs?' As if the washing machine did not exist. Ho hum.
Write it Down!
Get a notebook and record every penny that you spend. And we do mean every penny because you need to reconcile outgoings with income at the end of each week.
This is exactly what I do. It makes me much more conscious of what I spend, and a lot of possible impulse buys are prevented because of it. I am on a pretty low income but find I manage incredibly well on it, and that money can stretch further than you think.
I budget for everything, for an entire year, and keep an eye on how my spending is running in each area. It can get a bit tedious, but I always get through the year still in the black.
Ten years ago I had a much higher income, but I always had huge credit card bills. Now that never happens, but I don't feel that I'm going without much. I'm just more aware of where it's going.
No, really. When you have a chunk of money, go buy large quantities of things you use all the time, like toilet paper, vegetables in season, meat and baking goods like sugar, flour and rice.
Blanch and freeze the veggies, or can them, separate the large packages of meat into useable sizes and freeze, and seal the sugar, flour and rice into vermin-proof containers.
If you buy bulk, the initial cost is more, but the per pound or unit price is much lower. For example, a couple of weeks ago, I bought two 24-packs of toilet paper. We won't use that for nearly 6 months, but I spent 11 bucks (basically, 5 pounds). At that price, it was what, 23 cents a roll? how cheap is that?
A Stitch in Time Saves Nine
Your best bet is to be prepared before the holidays begin so you're not in this mess in the first place... Many banks in the US offer what is called a 'Christmas Club' in which depositors make regular contributions to throughout the year and then before Xmas, you receive a cheque from the bank with all your money and a little bit of interest to do your holiday shopping with. Saving $10 or $20 a week for 50 weeks really adds up by the time you're ready to go shopping for the holidays... Or to quote good old Ben Franklin again, 'a penny saved is a penny earned.'
Cheapskate of the Year
A 76-year old Pennsylvania pensioner who cleans and reuses dental floss was named Cheapskate of the Year5. Evidently, self-stated frugal-flosser Peter Nowak, a retired metallurgist, made the accolade his own by washing a strip of floss and sterilising it with alcohol after each use for 14 days. The technique is to tie a 250mm length of floss into a loop instead of using a 450mm piece much of which is wrapped around the fingers (as recommended by the manufacturers), thereby saving on waste. Then, after each use the loop is rinsed under running-water and sterilised with alcohol before being hung up to dry.
I am a frugal flosser. I hate to daily discard a long length of essentially unworn dental floss. So I have devised a procedure which is 96% more cost-effective than the standard technique. This saves me $5.066 a year.
Thrift in the WC
'If it's yellow, let it mellow
If it's brown, flush it down'.
Lavatorial saving was a common theme among the thrifty-minded entrants, notably yielding the winner. Others who penny-pinched on personal hygiene included:
Making the bog-roll last longer by separating the sheets in a two-ply roll
Conserving ice by cooling drink cans in the toilet-cistern
Using less nail-polish remover by clipping nails first
Using less of everything by performing all necessary ablutions in the work-place facilities
To make a little money go a long way? DON'T SPEND IT!