How to Save Money (10 Easy Tricks)
Trying to find ways to save money? Tired of working so hard to watch your money vanish? I'll show you how to save money using 10 easy tricks.
1. Avoid Extended Warranties
You’re at the check out line buying a brand new television for your living room. You’ve been saving your money for a while and are finally able to buy that monster flat screen you’ve had your eye on. The sales clerk looks at you and asks, “Would you like the extended warranty for only $100?”
Warranties may sound good; I can pay $100 instead of $1,000 to replace it? It’s a no brainer!
The reason sales clerks are always pushing the warranty is because that’s where they make the most money. The reason they make so much money on them is because most people will never need to use their warranty.
Take a tally of every item you own that had the potential of an extended warranty (microwave, dishwasher, refrigerator, televisions, computers, etc.). How many of these items have had to be replaced while still under the terms of a warranty? The amount you would have spent on warranties for all of your items far exceed the $1,000 you’re trying to save.
If the idea of not having a warranty still leaves you uneasy, take the $100 you’d spend on it and put it aside. If you did this with every item you would buy a warranty for, you should have enough money saved in the event one of those items breaks.
2. Use eBay
Okay, we’ve all heard of eBay, right? The website that lets you auction off all of your unwanted items? I’m not going to tell you to sell your stuff on eBay (not in this blog anyway). Instead, I want you to buy your stuff on eBay.
My wife, Andi, and I have used eBay to purchase many items at discounted prices. As a musician, I have bought new or refurbished musical equipment for 30-40% off of the retail price.
Over the years, eBay has become a reliable source for people to sell products. While there are a lot of individuals selling their used items, a lot of businesses have ventured over to eBay as well. Due to the seller rating system, you can read reviews on how trustworthy a seller is before engaging in buying from them. This also means that most sellers offer good return policies and warranties (the free kind) so that they can maintain their high rating.
3. Call to Cancel Subscriptions
Before you freak out about canceling cable, I’m not saying you actually have to cancel it. If you don’t watch a lot of TV, then canceling can save you a lot of money each month. However, if you’re addicted to The Walking Dead like me, this may not be an option (and I’ll be damned if I cancel before I find out who Negan kills).
I’m suggesting you call your cable provider and tell them you’re pricing other options in order to save money. Most providers will offer you discounted rates in order to keep you as a customer. You can also ask for a loyalty discount if you’ve been with them for a while. I have an alarm set in my phone to call our provider every six months to ask for discounts.
4. Have a Budget
Still thinking of how to save money? If you’ve read my past blogs you know that I am a big believer in a budget. I think this is the number 1 thing you can do to save money. Money has a tendency to wander off if you haven’t told it where to go. Have you ever looked at your bank account at the end of the month and wondered where all of your money went? By sitting down and creating a budget each month, you’ll know exactly where your money is going. When Andi and I got on a budget, we were amazed to find between $600 and $800 extra in our monthly income. I go into a lot more detail on how a budget can revolutionize your finances in a previous blog.
5. Pay Cash
I think if you looked in most wallets, one of the last things you’d find is cash. It seems that no one carries cash anymore. However, using cash can save you a lot of money.
A study conducted by Dun & Bradstreet showed that people paying with a debit or credit card spend 12-18% more than people paying with cash. When we swipe a card, we don’t feel like we’re spending money. It’s easy to add an extra item or two, or to upsize your meal, when you’re swiping plastic. However, actually thumbing through dollar bills to pay the cashier will reign in those spending impulses.
6. Buy Scratch and Dent
When it comes to appliances, look into purchasing “scratch and dent” items. These are appliances that were scuffed in the shipping process and are sold at a discounted rate. Often times you can find a fridge or stove where the dent is in a place that can’t be seen. The fridge still functions perfectly and you can save hundreds on the final cost.
A lot of stores have separate scratch and dent locations. This is great because you have a lot of options to choose from in one store. They ship all of their damaged products to one store for you to browse. If you can’t find a location near you, ask a sales clerk at your store if they have any scratch and dent items available.
7. Follow the 10% Rule
Once you have a written budget, try and put the 10% rule into place. This involves looking at all the categories you’ve broken your budget into, and cutting as many of them as you can by 10%. Take that money and put it into savings or toward debt.
Things like bills and mortgage payments obviously can’t be cut, but take a look at your entertainment and clothing budgets. If you budgeted $200 for entertainment this month, knock it down to $180 and put the $20 toward your debt. Then cut that $100 for clothing to $90 and move that $10 toward debt too. Try and cut as many categories by 10% as possible. You will hardly notice the difference and it can save you hundreds in the long run. This is the #1 thing I turn to when showing clients how to save money.
8. Avoid the “Two For” Deals
You’re at the grocery store when an end cap catches your eye. On display is a wall of Oreos with a sign that says, “2 for $4.00 (or $2.50 each). That’s a great way to save money, right? Not exactly.
This is a great money-saver if you were going to the store to buy two packages of Oreos. However, if you weren’t planning on buying Oreos, or were just going to buy one pack, you’re losing money. Instead of spending $2.50 for just one pack, you’re spending $4.00. That money can add up fast.
9. Double Check your Insurance
Insurance is something everyone needs. However, there are a lot of ways to cut the cost of the insurance you already have in place.
You need life insurance if you have someone in your life that relies on your income, such as a spouse or children. However, if you are single with no dependents, life insurance may be an unnecessary expense. You can also save a ton of money by taking out a Term Life Policy. These monthly premiums are incredibly lower than a Whole Life Policy.
Another way to cut costs with your insurance is to raise your deductibles on your auto insurance. This will lower your monthly payment, but also means you’ll take on more risk in the event of an accident. Check to see how much you’ll save by raising the deductible and decide if it makes sense for you. Be careful not to raise it too high! You don’t want to break your bank if you did get in an accident.
I recommend taking off extra things like roadside assistance on your insurance. While this can only cost $2-3 per month, think about how often you use it. I’ve never used roadside assistance, and I carried it on my policy for years. I can say that I spent more on that add-on than I would have on a tow-truck if I needed it.
10. Consider the Opportunity Cost
My last tip is the easiest one to implement; start thinking about opportunity cost. Opportunity cost means that every dollar you spend could have been spent somewhere else. By purchasing that $5 meal, you lost the opportunity to use the $5 elsewhere. Every financial decision comes with opportunity cost.
Does this mean you shouldn’t buy things? Of course not. This will just help you think twice about all of your purchases. That $1,000 vacation could go toward retirement. However, the memories you’ll build with your family are incredibly valuable and may be worth the money you spend. By stopping to think about it the opportunity cost, you’ll know that you’re making the right decision.
There are tons of different ways to cut back financially. What are some things you do to save money? Share them in the comments box below!
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