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saving for the other things
if the best things in life are free, you should at least save on the other things
by jeffrey d. walker
11.17.08
general

I read IM contributor Lucy Lediaev's piece posted last week in the gallery entitled Belt tightening. I thought I'd add my 2 cents on trying to make the most of your money.

The first thing you have to do is have some sort of budget to see where your money is going. Until recently, a "budget" was more like, "do I have enough to pay all my bills?”. The answer usually being yes, that was the end of it. Anything left over was thus fair game for blowing on... whatever. I didn't really keep track of my discretionary spending. But after recently having my house painted and buying a used car in September, my answer to having enough to pay my bills was getting close to becoming "no." So, my margins being thinner for the next couple of years, I took close stock of where my money was, and, where my money was going.

Where my money was was mostly in a checking account, because (1) that's where it gets deposited automatically by work, and because (2) most of my money doesn't stay with me long, sadly, so I had left in in the account I'm used to paying bills from.

The truth is, though, I hardly ever write a paper check anymore. Most of my bills are paid through online bill-pay services. And, turns out, you can often pay bills electronically from a savings account just the same as a checking account through your online bank.

Voila. Now, for the brief time my money is with me between being paid to me and being paid out, it's resting in an interest bearing savings account. It's not making me a fortune, but when my balance averages around $1000 a month, I'm pulling down a little over $3 a month. That's like three cups of coffee (or, almost enough for either a tall Caramel Macchiato at Starbucks, or the small size of the drink formerly known as “Crazy Fiona” at Gimme). So, a simple change in where my money was made one small difference. If this sounds good to you, a simple Google search for “savings account with online bill pay” should give you several options with APR rates over 3%, and many have no minimum balance fee or opening fee.

Next, I had to take stock of where my money was going. Of course I was always aware of the biggies (Mortgage, Loans, power, etc.), and I have those laid out on a spreadsheet made for free on Google Documents. I track the money I'm getting in, and each bill paid for every month. I now have a rough idea of what I can spend a month for the next two years and still have enough.

But as I said before, I didn't really keep track of my discretionary spending in the past. The $200 I'd withdraw from the ATM would be eaten up in a couple of weeks or so, and I didn't really think where.

Where my discretionary fund used to be withdrawn and spent, I've now opened an electric orange account with online bank ING Direct. I got a free ATM / debit card, and there are thousands of free ATM locations across the nation where I can get cash if I need it still. However, I've mostly been using the debit card feature so I can later review where I've been shopping. Grocery stores and convenience stores have taken these for years, and now most fast-food restaurants take plastic. The latter proved to be my first pattern of discretionary spending -- food. The bounty of cheeseburgers, breakfast sandwiches, and places making better coffee than I make are all over the place.

The fix is simple: more snacks with me when I drive places. Peanut butter and jelly, apples and cheese slices, and /or trail mix will help me save about $10 a month. The coffee, while not eliminated, has been scaled back (a little painfully, but I'm managing). In place of the full flavored coffee drinks, I'm going with Cafe au Lait (or "Misto" at Starbucks) and a little raw sugar, saving over a buck a pop. These are simple (and, in the case of the burgers anyway, probably healthier) changes I would probably not have even thought about without the debit card.

Another thing I noticed was DVD rentals. Amanda and I, like many people, stay in and watch DVDs a lot. Beyond Lucy's suggestion of dropping premium cable channels, Amanda and I gave up cable TV completely years ago. We now heavily rely on Netflix as a source of entertainment. However, over weekends (especially long ones), we've had the tendency to burn through stuff we had in the mail and end up going to Hollywood Video and renting another movie or two. We repeated this pattern for two weekends in October, totaling $18.52, and we were out of town the last weekend of October, or else we probably would have done it again, for a grand total of $27.78 in extra DVDs. Seeing this trend, I have opted to increase our Netflix subscription. Each additional increment runs about a $7 increase in fees. For a small savings, I have eliminated extraneous trips to Hollywood Video without sacrificing our entertainment. Also, the time and gas spent driving to the strip mall in which Hollywood Video sits is also eliminated. I won't see that in my budget, but it does make me a little happier anyway.

By tracking how I spend my money, I was able to make a few simple changes that will help me save more over time. Knowing where you spend is the key to changing your habits.

There one other tip I'd like to offer: Comparison shopping online. When a world of stores are at your fingertips, there's no reason to not use the internet to comparison shop for just about everything. It's all right there for the Googling. Be sure to check shipping costs, because this always affects the bottom line. For some items, even if the price is right, the shipping will offset whatever savings there is on the item versus your local store –- I've found this to be true, for example, on a pair of Dickies pants. The local store wanted $23, and online they were $18. However, when I went to check out, shipping made them $26 (how heavyweight was that material? So in that case, local was better.

I often compare not only prices online, but also check those prices against local stores. It's often easy to spend a few minutes calling stores for price checks depending on the item. Of course, usually I get to the store and I'm all like, "I'm not paying that much for this," and then I start web surfing. But calling ahead can save you the trip and the grumbling.

Sometimes you can find unbelievable deals on items you wouldn't expect. For example, I wanted to replace a pair of car tires. I started by doing what my dad would have done in this situation: I got the yellow pages and called just about every place in the "tires" section to see who could give me the best deal. Right at $137 was the lowest price I could get for two store-brand tires mounted and installed, and that was for a tire I wasn't thrilled about –- a basic all season passenger tire with a simple tread (I was able to see the tire online). The tire itself was $63, but I actually could have gotten a better deal on a $65 tire at another place because their installation was cheaper. Still, the price was similar. Turns out, just about every tire place in town had a tire with little brand recognition in the mid-$60 range, and the rest of the cost was usually the labor involved, tire disposal fees, etc. These fees can vary widely, so make sure you're clear on all the costs when settling on where you have your work done.

I actually drove down to have them do the work, but it was going to take forever and I didn't want to wait. So, I went back home (grumbling again, but for a different reason). Back home, I did a simple search for "tire sales online." I found some great deals, and starting comparing some of the tires stats. If you're looking for help with all of the ratings, etc. on different tires, I'd recommend Tirerack.com's tip section. In the end, it was Discount Tire Zone that had several tire options for my car for less than $40 per tire. After comparing, I settled on a pair of tires that cost $37 a piece, that after shipping cost me $88.30. I found a place to mount and install them for $22, bringing the total package to $110.30 -- over $25 saved, and for tires I liked much better anyway. I could have gotten another tire for $31 (half of what anyone else in town wanted) if savings was the only issue. I only upgraded for a better tread pattern with those groves to move water away. Trust me, that stuff is good. I love those water grooves.

I was a little surprised that I could buy tires for that much less online, but I really shouldn't have been. I've been undercutting local stores for several years by employing this strategy. Things like books, electronics, shoes, and in some cases even food, all shipped to my house for less than the same item would have been at the store. Sometimes, you can get deals directly from the manufacturer: I got a SIGG water bottle from www.siggstore.com shipped for less than it would have been either at the downtown store, or even on ebay!

Steps like this are certainly more time consuming than just driving down to the local store and just buying what you want. But, at least for this article, the name of the game here is saving money, not time. I hope you find any of these tips helpful!


ABOUT JEFFREY D. WALKER

A practicing attorney and semi-professional musician, Walker writes for his own amusement, for the sake of opinion, to garner a couple of laughs, and to perhaps provoke a question or two, but otherwise, he doesn't think it'll amount to much.

more about jeffrey d. walker

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COMMENTS

lucy lediaev
11.17.08 @ 12:47p

Jeff, I'm glad you posted this. The checking account issue was one I had not thought about. I have a credit union debit card that could just as easily use my savings account. I also rarely write checks anymore.

I am a committed Internet shopper, and I compare prices online and also read reviews avidly. C-net is a great source for recommendations and specs on home electronics. Amazon's reviews are great for reviews of kids books and toys (my partner and I have 9 grandkids, all but 1 age 10 and under). Their prices are usually very competitive as well. I have signed up for the "Prime" shipping, which provides "free" 2-day shipping and does have a fee associated with it. However, I can share it with family members and it more than pays for itself each year.

Another thing is to find a partner or partners so you can take advantage of big box store. When you buy staples or even big packs of meat or seafood, splitting them with a friend makes a lot of senxe.

Thanks again for mentioning some things I had not thought of.

tracey kelley
11.18.08 @ 6:41a

As I posted on Lucy's column, I wrote a similar column to this about 3 years ago. I've done everything on that list, Lucy's list, and this list, but still have to find new ways to save.

The irony? I make more money now than before, but know how quickly it can all go away.

Jael mentioned her frugal gourmet tips, and I think right now, food is probably the most variable expense in our house. That and the heating bill. So it's more Crock Pot meals and flannel sheets on the bed.

And flannel jammies.

And flannel socks.

We had a discussion about just how low we could tolerate setting the thermostat. Each week, we've reevaluated and adjusted it down. I can't imagine what it's going to be set on in January.



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