When it comes to saving money, we’ve probably all heard the same tips. Stop going to the coffee shop! Don’t buy frivolous things like artwork and jewelry! Start cooking at home!
And, it’s all good advice. But I think many of us fall into the trap of being “penny-wise and pound-foolish”. That is, we focus on the super small savings and then miss the big steps to save money.
A good example of this is “The Latte Factor”; you know, that little piece of personal finance wisdom that says if you stop spending money on lattes, you’ll save hundreds of dollars over the course of a year. And, it makes sense. If you spend $4 per latte twice a week, that’s $384 per year. Significant.
But, you could potentially save that much with just a few phone calls. You could shop around for cheaper car and home insurance, or renegotiate a better rate with your cable TV and internet provider. These are easy ways to save big that don’t involve daily or weekly sacrifices.
So, let’s look at some other small steps you can take to save big money.
Rebates
Store and brand rebates run the gamut, from $5 to $500. But the shocking thing is that most of us shoot ourselves in the foot when it comes to rebates. According to a study done by Leflein Associates, 41% of people who buy a product with a rebate forget to send it in.
And, I’m wholeheartedly in this camp. Just this summer I’ve missed out on $26, all because I forgot to send in the rebate forms.
Will that $26 break the bank? Well, no. But you can bet I sure wish I hadn’t forgotten
And what about when Dell offers a $250 rebate on their computers, or Whirlpool offers a $400 rebate on their washing machines? That’s big money. And, a whopping percentage of people will never get it because they simply forget to send in the paperwork.
Rebates take very little effort, and they’re a great way to save money. When you think about the time it takes to send in the paperwork versus the time it takes to resist the urge to go to the coffee shop every week, there’s no comparison.
Regular Upkeep
I don’t know about you, but I loathe getting my car’s oil changed. It’s $30 each time, and I can think of a thousand ways I’d rather be spending that money.
But, regular upkeep on my car saves me big time over the long term. Why? Because it keeps the car in good condition. If I skipped the regular maintenance to save that $30 every few months, my car would eventually need thousands of dollars in repairs.
Spending money for upkeep on things like a car, a home, or even a nice coat, can be irksome. It can feel like a waste because you don’t really see an immediate benefit. But over the long term, these little expenditures have a huge return simply because they help you avoid big, costly repairs.
High-Yield Savings Accounts and CDs
If your savings account or emergency fund is currently sitting in an account with a non-existent interest rate, you could be earning money simply by taking the time to look for a high yield account.
Now, it’s true that rates have fallen big time. This time last year I was making 3% at ING. Now I’m making 1.4%.
But, that 1.4% interest rate is still higher than my bank’s offer, which is 0%.
And while I was Louisiana earlier this summer visiting family, I saw some truly stunning offers. For instance, Farm Bank in middle-of-Nowhere, Louisiana, was offering 5% interest on savings account. 5%! I almost swerved off the road. Another small bank in Mississippi was offering 4%.
If I didn’t live a thousand miles away, I would have gone in right then and opened an account.
I haven’t seen offers even remotely that good from the bigger banks, so I’m assuming it’s the only the small, community banks that are able to do this.
So, want to start earning some easy money? Then spend just a little time shopping around for interest rates. And, don’t pass up your smaller, community bank. They just might have the best rate around.
Physical Fitness
I can’t say enough about how much money you can save simply by getting and staying in shape.
Want a good example?
Ok. I live fairly frugally, but I spend $32 per month on a gym membership. Of all the things I spend money on each month, I truly believe that this is the expenditure I get the most benefit from.
Here’s why: as a self-employed writer, you can only imagine what my health insurance is like. The nice way to put it is that it’s for emergencies only. Any visit to a doctor is going to cost me at least $80. And if I get sick and can’t work, there are no “sick days” or “personal days” to fall back on.
When I’m sick, I make $0 for the day. Not good.
Before I began going to the gym regularly two years ago, I seemed to get sick all the time. I’d come down with little colds, the flu was a regular visitor, I had bad allergies, and I got tired easily. All thanks to sitting behind a desk all day.
But since I started running and working out, I’ve hardly gotten sick at all. I haven’t seen a doctor in years, and I feel great almost all the time. I’m more productive, more positive, and I have far more energy.
All of this is because I’m getting plenty of exercise. And, while I can’t say exactly how many hundreds or thousands of dollars my physical fitness has saved me, I know it’s a lot.
To me, that $32 per month is a small drop in the bucket to what I’m getting. I’m avoiding the doctor, as well as making more money because I’m more productive and alert.
Many people view gym memberships as frivolous expenditures. But in my mind, nothing could be further from the truth. Getting regular exercise is an easy way to save yourself hundreds or thousands of dollars in medical bills. It also increases your quality of life, and helps you work better because you have more energy.
Definitely worth the money in my book!
Last Word…
I know there are plenty of ways to avoid being “penny wise and pound foolish”. These 4 are just the tip of the iceberg!
What small steps do you do that save big over the long-term?
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Love the ideas of the gym membership. While I do not spend money monthly on the gym I would say the same thing, I walk or hike regularly which is free. I also decided to buy a Wii Fit, although costly it is a one time expenditure. On days the weather doesn’t permit an outdoor activity I can stay in. Even with the electricity to run it I know I am saving money and gas by not driving to the gym. Another great money saving tip I found is multi-tasking. From grouping my errands together (I make a list at the beginning of each week) , to baking for the week ( less preheating my expensive gas oven) , and everything in between. It all adds up and as a recent college grad I need as much help as I can get.
Christi,
That’s so funny you bring up the Wii Fit, because my husband and I were just talking about getting one for the winter months. I’ve only played one once, but I was so impressed with how fun and physical it was!
I checked Craigslist earlier today to see what prices were like on used Wiis, and they weren’t too bad. Michigan winters are very long, and I think that would be a really fun way to stay active when it’s freezing out!
Do you find that you get a good workout with a Wii Fit? If so, what game are you using?
Thanks so much for taking the time to write in!
Heather,
I love using the Wii Sports or even the game that came with Wii Fit. My mom even has one and loves using the Personal Trainer and the Jillian Michaels game. All in all you get a great workout, so long as you put in the effort. The cardio games are a blast but finding out your balance and strength on the Wii Fit game is interesting as well. Compared to other game consoles even brand new the price isn’t bad. Do NOT get tricked into bundles, they usually come with a game that has an extra controller in it, and are counting the mini games as separate games and it is much cheaper to purchase all separatly. I live 5 minutes away from a ski resort in New England and I loved my Wii Fit this winter.
Christi
Hi – not only did I enjoy the article, but the petunias in the shoe reminded me of all the years I’d take my children’s outgrown old shoes; line them up, and plant flowers and vines in them. They’d line the steps up to the porch – everyone would compliment me on them, and of course they worked well as planters because they drained so well.
Today I was cleaning the living room; selecting things that could go to Good Will, and realizing how many things I’d learned in my 67 years of life. Because we were poor kids on a large farm in Michigan, I think by virtue of ‘default’, we HAD to learn frugality and learn to love it (which I truly do).
I noticed the savings rate in the town you said was 1000 miles from you. Well our savings account is 2600 miles from us as are all our long-term CD’s; there’s no law that says you have to live in the state, to have a savings account at any bank or credit union.
I do think more people should focus on preventative ‘medicine’ by going to either a gym; or getting equipment they can use at home to work out if they don’t have enough exercise in their life. For me, I was a working mom of 5 children; had big houses; garden – yard, and kept so busy running up and down stairs – cleaning, and carrying groceries and kids, that I never had to invest in any ‘equipment’ – it was all free, and lifting up a toddler can be all the weight you need to deal with if you do it 60 times a day like most moms do.
After my kids grew up, I got plenty of grand-children to start repeating the process. However, now that they’re all over 16 years of age, I now have to work harder to find things to work harder at doing (smile). Working is the best form of exercise; it requires ALL your muscles to be engaged in some way, and if you turn on some good music and really love every minute you spend at sprucing up your home; washing your windows – sweeping; mopping, etc., you’ll get a good work-out 5 times a week.
One thing I do NOT do, is spend money on ‘cleaning tools’ to make it easier. I use the vaccum of course, but I prefer not to use a mop; I do that on my hands and knees still – good exercise. I shampoo my rugs on my hands and knees – started doing that for my mom when I was 9 years old, and learned that will tighten up those abdominals really good if you don’t have it done, or buy a carpet shampooer. Cleanig the light fixtures; dusting and wiping the ceiling and ledges in your home gives you a ’stepper’ work-out as you go up and down the step-ladder. Washing the windows works out those arms and those legs as well as the back too.
Now about that coffee…………. My kids all wanted to learn how to drink coffee, so I used to make up hot chocolate and put 1/2 hot chocolate into their cups, and 1/2 coffee. I’d whip up some cream, and top it off that way – it wasn’t a ‘latte’, but it was a ‘latta fun’. Frankly, I love my coffee strong and black; chilled and enjoy that every day. Whatever coffee we don’t drink in the morning, goes into a pitcher into the refrigerator and is chilled for when we want to cool down. We brew our own tea; no fancy stuff – no sugar, it’s also inexpensive and good.
Learning to cook and bake, saves tons on dollars. Making a double batch of ‘anything’, and freezing that extra batch, saves money – your own ‘t.v. dinners’ when you’re in a hurry.
All of our televisions are 10 years old; we will never spring for a monster-sized set when we rarely watch it. We enjoy music and have a sizeable collection of CD’s – we dance to the music; work to the music, and eat a sound diet so we stay healthy – trim, and truly prefer not to invest money in the many high-tech things that are terribly expensive and quite unneccessary.
I figure if my great grandparents could enjoy life as they did all those many years ago, I could do the same without coming into the 21st century with a household of widgets, and a credit card debt that was run up to buy those unneeded items.
We hike; camp, and spend a great deal of time out-doors. We swim; we bike – we like using our bodies to accomplish tasks and enjoy the things that come ‘free’ in this world.
We have never forgotten to mail in a rebate; we do take advantage of those opportunities as well as buying everything we can, on sale. We shop at the used stores; Salvation Army, and Good Will – having been an art dealer, I earned my collection by taking art pieces rather than commissions in many cases.
I hate to shop which is definitely a good thing, and only shop for the things I know I really need – I have few ‘wants’ and what I want most, is money in the bank for emergencies.
I don’t buy magazines; I don’t look at advertising, and I never let anyone tell me I’m missing something, by not buying the ‘latest thing’.
I prefer to ‘invest’ money, rather than spend it – ‘investing’ does require spending, but spending it in such a way, that I don’t waste it.
“Waste not, want not” – my motto.
I too rarely go to the doctor and never get sick. I run 3-4 times a week and walk the other days. I have not had a gym membership for years and feel I get adequate exercise by walking, running, biking and using a free pair of weights I got off of Freecycle.org, (plus the other set that I got at Target many years ago).
I love my exercise routine because I don’t have to drive anywhere (more on that below) – just go out the door and start running/walking. 1-2 pair of running shoes a year and some bike maintenance is all my routine costs me. Plus I save time by not having to go anywhere to work out.
Another huge and radical way to save money is to sell/donate the car. Especially if your town has a bus system. Being radical is great and makes people think how they could creatively lose a huge expense! Often if I don’t have time to run I’ll get off the bus early and walk the rest of the way home. And of course I use my bike.
For fantastic inspiration on carfree living read – How to Live Well Without Owning a Car by Chris Balish. You will wish you’d sold your car years ago! It’s so fun and inspiring with lots of great ideas for getting around. I’ve been carfree for over 2 years and cannot imagine why I’d ever own a car again. I wrote a post on this in May: http://nomadneedles.wordpress.com/2009/05/01/2-year-anniversary-of-carfree-living/.
But I agree that whatever it takes for one to get exercise and remain healthy is the best form of health insurance and money well-spent. It’s easier to stay healthy than to get healthy. It’s also easier to keep weight off than to lose weight. Maintenance is key.
I just received the above e-mail comment. Since we paid cash for our car back in 1976, we’ve never had to finance a car since then because we save the money; earn the interest, and always buy a car with about 25,000 miles on it so we can both afford it and don’t take the depreciation.
Our insurance is $900/year; we use it only for long-distance travel and live where we can walk to the store; the park, the basketball courts, and a few restaurants.
Our family lives all over the U.S. – we could hardly be without a car since we love our road trips, and also have a motor-home we use for vacation get-aways at much less cost.
We have many seniors who live in our condo’ complex; we drive them to various doctor and dental appointments – they pay for the gasoline, and it keeps our local driving costs to a minimum.
Since we prefer to shop once a month for groceries, we drive 52 miles round trip to get all that we need at the best prices; we could hardly tote all those groceries on public transportation, and our local market where we can walk to, charges about $1 to $2 more for each item than where we shop at the larger market. We tried going local; it cost us about $40 to $45/week MORE, which added up to about $170/month more which certainly was a lot more expensive than using our car.
If a person pays cash for their car; never buys one that they have to finance, and keeps their tags and insurance costs (annual) at a cost of $1200/year or less, then it’s only $100/month to insure the fact you have 24/7 transportation. If you share the car with others by taking them on their needed trips, you can make about $25/week if you live in a senior area like we do, so what they pay for helps with gasoline and defrays the cost of the insurance and tags.
I want my mobility; I want to drive cross-country – I love to travel, and that is something that was built into our budget 20 years ago, and that is our ‘luxury’ we allow ourselves because we’d not see our family that often, if we didn’t.
Once a person is over 55, it’s quite unwise to go without a car – you can’t depend upon your weather or your endurance and health, to accomplish all the tasks that have to be done in a month – even moreso, in a year………..
Strange, the 2-word verification reads: 10 genius – I’ll go for that!
@Christi- Thanks for that great information on the Wii! And thanks for the tip on the bundles; I’m definitely getting a used one if I make the splurge, and will keep that in mind.
@Diane- Thanks for your great comment! There was a ton of great information in there.
The only reason why I didn’t make a beeline for those offers is because I was concerned those small banks wouldn’t have online banking for me to check on my account. But I really should have gone in to check! We were on a road trip at the time, but I sure wish I would have taken five minutes to go check it out. Oops!
And I’m with you on the cleaning workout. It’s such good exercise! I love getting down on my hands and knees to scrub the tub or the floor. It’s a productive workout.
@Robyn- Thanks for that link on car free living! I’ve toyed with the idea, but haven’t yet been able to take the plunge. I live in a town with no public transportation, but as soon as our house sells we’re moving to an urban area for a year with a great system in place.
It’s such a drastic step, but I love thinking about it! It’s exciting and scary at the same time to think about living without a car. I’ll definitely check out that book; might give me the courage I need to seriously consider it. Thanks so much for mentioning it!
I know carfree living isn’t for everyone, but I also believe our society and infrastructure has created a way of life that makes people think we HAVE to have a car. And there seems to be some false stigma about not owning a car. I’m such an advocate for encouraging people to think creatively about how they could live carfree and not be dependent on what the powers that be have established for us.
It does create limitations – I live in Boulder, CO with the mountains in my backyard – I used to take day trips (and longer) on a regular basis. Now if I want to go on a road trip I have to plan it and then I rent a car – I can be assured I’m getting a reliable vehicle. Mine was getting old and undependable anyway. For myself, I’ve adjusted to the inconveniences. But I do understand that it’s just easier to have a car in many situations. If I had kids I would own a car.
Cheers,
You know what I was thinking – the last 2 e-mail notices that came in, mentioned the ‘car issue’. It struck me that one can always cater to those who do become ‘car-free’, by making sure (as we do), that someone in the neighborhood has a dependable car for those times when all the taxi’s (expensive) are busy; the bus is over-loaded (as our local one is most of the time), and you can’t afford to live in places like Leisure World (where they have small busses who take their residents to the store; doctor, dentist, etc.).
Also, unless you’ve got a rental car service who will pick you up (which we don’t have), then you’ve got to get transportation to the rental service to start with (and that requires living close to a bus or some type of public transportation).
Since I’ve been a ‘not for profit’ type of taxi service to so many people who are in their 80’s (and over), I know my little senior community would groan, if I should ever decide not to keep our car handy not only for us, but for them. Since there are so many rural areas where I live; the desert is terribly dangerous on the hot months, it wouldn’t be a wise thing to try to bike or walk any distance.
Just this last week, they recovered a hiker who died from dehydration and heat exhaustion. I remember when I lived in up-state New York, it was down to 46 below zero, and people died who tried to use snow-mobiles instead of cars, and got stranded back in 1967. So, I consider the overall safety factor of weather and remoteness to the food sources (which in the desert, we have no vegetable gardens because of water allocation); to the doctor – hospital – dentist, and I think it’s a decision that often has to be based upon safety, as well as saving money.
Obviously if one lives in the city, it becomes much easier to eliminate the full-time car ownership, and I’m all for car-pooling since I lived 20 years in Southern California, and did just that.
I do wish long ago when I rode in one of Ford’s electric cars they put out in 1974 (my brother-in-law is a Ford dealer; my son is Honda dealer – my nephews co-own a Ford dealership), that people would have taken these up as ‘town cars’. Sadly, the results of Ford’s beta-testing showed that America wasn’t ready to climb into a small ‘wrap-around’ car to go short-distance shopping. I’m guessing now that things have changed, there will be a much better response to the electric car and other hybrids; however, the cost to purchase one is rather staggering and I’m not about to finance a car – ever.
Another factor for me is I’m an excellent driver; I trust being my own pilot, and don’t let anyone drive me anywhere unless I’m in an ambulance – not everyone is ’safe’ behind the wheel. The older I get, the less I can depend on the strength of my legs to transport me; the more I realize I need my ‘wheels’………. I pray I keep my eye-sight – can’t imagine being blind and not having the ability to drive – that would be a terrible situation.
Hey, I found this on CNN – if anyone can afford a new car, this might be a ‘winner’:
Gas guzzlers, as the electric Chevy Volt is on track to be rated at 230 miles per gallon. Pegging down the gas milage on Chevrolet’s flagship electric car, due out next year, has been hard, since the Volt runs for about 40 miles before using any gas; after that, it gets about 50 mpg. The draft 230-mpg rating is based on city driving.
Diane,
I know! I just saw that on Yahoo a few minutes ago.
I have to wonder how much electricity it uses to charge up the battery. I wish they would have said how many KwH it takes for a full charge; that way people could more accurately estimate exactly how much money it costs to go, say, 200 miles.
This might make a great blog post when more information becomes available!
I wonder what the sticker price is…did your article say?
The cost of the Volt is about $40,000; it qualifies for a 25% ‘credit’, so it can be as low as a $30,000 car (base cost), but upwards (with options) to being a pretty expensive investment.
The cost re the electricity to power the car:
The “230 mpg†marketing suggests that the Chevrolet Volt will somehow have equivalent energy costs to a conventional, gasoline-fueled car rated at 230 mpg. The official GM press release quickly points out the low operating costs and quotes the national average electricity rate of $0.11/kWh. Further down it points out that $2.75 worth of electricity will get you 100 miles of driving. All the figures were based on city driving.
Here comes the grain(s) of salt:
$2.75 for 100 miles. $2.75 isn’t far off from what a gallon of gas costs these days. So 100 miles for what it costs for a gallon of gas? It would seem that something like “100 mpg gas equivalent†(at least in terms of cost to the consumer) might be more meaningful. While it may not make as many headlines, it would still be a rating to be proud of.
Still, I’d suggst taking a few minutes to determine if #1 – you can afford to pay the price for this car, and of course at that price, try putting as much of a down-payment as you can if you have to finance it. #2 – If the price of gasoline goes LOWER than $2.75, then you’re pretty much stuck with the $2.75 as the basic cost regardless. #3 – Since we just had a serious increase in our electric rates in Nevada, you can be assured as more go to electric cars, the power companies will want to cash in on that, so that will drive up the cost of electricity and of course if you have to power up away from your own 110 outlet, then there could easily be a cost to use a ‘power station’ that you’ll probably find installed all along the highways in conjunction with the gasoline stations that are currently in operation.
Overall, I don’t think this is a viable investment; I’m sticking with paying cash for our cars – buying used ones that are 2 or 3 years old, and if I live long enough, I’ll probably wind up getting a used hybrid. But for now, this is the best information to answer the question you sent me about what does it cost to operate re the electricity and what is the selling price. Diane
Diane,
Wow, thanks so much for that great information! I’m sure other readers are going to be wondering the same thing regarding the Volt.
That’s great to know about the electricity equivalent. I was thinking the Volt would actually use more electricity than that, so I was happy to be proven wrong about that. $2.75 in elec. for 100 miles is pretty darn good I think.
I was carfree in Portland, OR, for 3 years thanks in large part to the carsharing company there (FlexCar, later bought by ZipCar). It was more convenient as well as cheaper than a traditional rental and allowed me to use a car for an hour or two if that’s all I needed. (for more than a day’s use, rental rates were generally cheaper.) Insurance and gas were included in the hourly rate. “My” car’s parking spot was 3 blocks from my house, and there were 5 more within half a mile. This option won’t work for everyone and it’s generally limited to urban areas as well, but it’s a model of communal car use that should be more widely known (IMHO).
I’m not sure this list is comprehensive, but for a start: http://carsharing.net/where.html
I recently started looking for lower oil change prices (I’ve done my own before, but I like having the X-point inspection and not having to worry about oil disposal) – I found that a local dealership does regular oil changes for anyone who comes in for only 10 dollars! (La Fontaine – if you’re in SE Michigan) – so it’s not a bad idea to look around. I get my oil changed about every 2 months and that essentially saves an additional 120.00 on top of the savings that comes with regular upkeep.