4 posts tagged “saving money”
Okay it isn't a food diet, it's a spending diet. And it isn't a diet in the sense of "restriction and deprivation" but just about doing things in a systematic, planned mode.
I've written about various money-saving tactics before, and I thought I'd written about this, but now I can't find the flippin' post. So if this is a bit of a repeat, bear with me.
A month or two ago, I was reading about the envelope budgeting system, which involves figuring out what you spend in a month, or week, or pay period, dividing that into specific amounts in specific categories, and labeling one envelope for each category. (People will actually try to sell you special envelopes for this purpose. Don't buy them.) At the beginning of each period, you take out the appropriate amount of cash and put the set amounts in each envelope.
My basic personal categories are Groceries, Dining Out, Gas, Giving, and good old Miscellaneous. I also have the typical household expenses, but I put a lump sum each pay period into a separate household account for that (and my lovely sweetie and I pay the mortgage, utilities, insurance and other bills out of that account). I go week to week, because two weeks' worth of cash lying around makes me nervous.
So once you're loaded up, you spend only the cash you have on hand. When you run out of cash in one category, you can stop spending in that category, or possibly move money over from another category. When all the money's gone, you're done spending until the next pay period.
So far, IT HAS BEEN GREAT. I have always been a bit slapdash in keeping track of the old debit card spending, and switching over to cash means I never, NEVER have that nagging feeling that I might be approaching zero in my account balance. I feel much more in control of my spending, and am able to spend a lot less time thinking/worrying about money. I never have to wonder which checks have cleared, which debit transactions haven't shown up yet, etc, etc. (A more organized person who devoutly records each transaction in their check register the minute it occurs probably won't see that big a difference in peach of mind, but I did.)
It's also been great to help me rein in my spending. I've read a stat in several places (but can't find the original study to back it up; if I find it I will post it) that people who use credit, debit, or gift cards (aka Fake Plastic Money) spend anywhere from 6% to 18% more than when they use cold hard cash. If I'm average in this respect, I'm saving about 12% by paying real cash for purchases.
(I'm not one of those people who are convinced that they are statisticsal anomalies. Marketing works, Murphy's Law applies, and I probably will not be able to "game" a system designed to separate me from my money -- i.e., the credit card industry, and its younger, slightly less evil brother, the debit card industry.)
I've seen the "spend less when paying cash" phenomenon in action with my sweetie. She is now also doing the all-cash thing, but before she did, I had to practially fight her to pay cash for things. She'd say, "Save your cash, I'll put it on my card." I would tell her what she's told me many times before, "It's all our money." But we're both less prone to impulse purchases and splurgy things when we're peeling off the actually currency and handing it over.
The one thing I still use my debit card for is gas; paying cash for gasoline, now that pre-pay is nearly universal, is a pain in the patootie. But I have $25 a week budgeted, so I just leave that amount in my account (rather than draw out the cash for it) and make sure that's how much I pump in each week.
I've actually had money left over in several categories, especially gifts. When that happens, you can either keep taking out the same amount of cash and let it accumulate, or reduce the cash you withdraw and let the cushion in your bank account grow. I've opted for the latter, because I don't want to be tempted to spend the cash lying around, AND because that's my little Christmas gift stash. Beautiful.
The other great thing about the all-cash plan is that you can siphon off money for special purposes by spending only bills and dumping the coins in a jar. My jar is a Date Jar; when the jar fills up, I take it in to my bank (which changes it into bills for free, none of that Coinstar ripoff for me), and take my sweetie out someplace nice for dinner. (With a big enough jar, it could be a getaway weekend!)
P.S. - In honor of the Canadian dollar now being worth more than the U.S. buck for the first time in I don't know when, the image I used has Canadian coins in it. Go Loonies! They say it's good for exports, but I bet we still won't be able to export much beer there.
In addition to firing the cable company, my honey and I are doing other little bits and pieces on the money-saving front.
First, I opted not to renew my faculty/staff parking sticker this year ($190.00), since my honey and I both work at the same place. We don't necessarily arrive and leave work at the same time, however, so I've been doing a mix of bumming rides from her, taking the bus, walking, and riding my bike.
I've questioned the wisdom of this move several times in the past weeks when temperatures have hung around triple digits -- we're relatively cool here at the moment, it's only 93 degrees outside -- BUT I find it more of a hassle but oddly less stressful to take the bus, bike, or walk than drive. I'm certainly getting more exercise this way; even if I take the bus, it's half a mile from my house to the nearest bus stop, and a full mile to the stop where I can pick up the quickest bus to work. And fortunately, the bike ride is DOWNhill on the way home, so when the tar in the roads is flowing like hot lava and the heat makes the air shimmer like the Mohave desert, I can at least coast a lot.
And by the way, the in-box/bicycle rack works like a charm. It's pretty light duty, but so is the rack it's mounted on, and it's plenty sturdy enough to hold my bookbag (containing lunch, work clothes, journal, and odds and ends). The only fly in the proverbial ointment is that if I'm not careful when I dismount, the loaded rack can pull the bike over and possibly dump me on my butt. Yes, I know this from experience.
So maybe one day I'll spring for the expensive panniers, or else do the kitty-litter-bucket pannier solution that I've seen on one cyclist's ride around town here (the link is to a different person's setup, which unfortunately doesn't use the bright yellow buckets, but shows how to do it). She said it works great, the buckets have their own waterproof lids, and plus, no one will ever steal that bike from now on, since a bike that someone is willing to semi-permanently mount kitty litter buckets to cannot be worth stealing, right?
Anyway, it's difficult to tell how much money these efforts are actually saving me. On the plus side:
- That $190 parking sticker, gone from my life
- Gas to and from work each day, 25 miles a week total
- Insurance - I'm saving a whopping $32 a year by not driving my car to work (if I lived farther away from work or if my car were newer and worth more, I would save more by doing this)
- Fewer errands and excuses to spend money - there's none of this "I'll stop at the store on my way home" business. I have to plan a separate trip to the store.
- Bus fare (.75 each way, going up to a buck each way Jan 1)
- Breve lattes - when I ride the bus and take the least-walking (as opposed to quickest) route, I have 40 minutes downtown, and my favorite coffee shop is right across the street from the bus stop. At this point, my inner skinflint and my inner hedonist start duking it out. I usually compromise with a decaf Americano (less than two bucks).
I fired the cable company this week! Hooray! Signed up for wireless service Lawrence Freenet instead. The service is noticeably slower than broadband cable, alas, but still way faster than dial-up. Seems comparable to DSL. We were being charged $55 a month for a combination of limited basic cable TV (the minimum, which we never use since we don't have a TV) and the "silver" broadband internet service.
Freenet costs 19.98 a month for the service, plus $11 a month to lease the base station (which plugs effortlessly via Ethernet cable into our wireless router). No contracts, no installation fees. Total: $31.78 a month (with taxes), 10% of which is tax deductible because Lawrence Freenet is a nonprofit. Yeah!
As my honey and I wait endlessly for our house to sell (more on that in a later post, but our real estate agent says the market in this town is worse than she has ever seen in eleven years in the business), it's nice to be able to whittle down the monthly bills a bit, and $23 less a month is nice. A little here, little there...
My partner and I keep a joint household account at an area credit union. That's in addition to our own checking accounts, and a savings account, our retirement accounts through work, and our kid's education savings account. So when we opened the joint account and got our shiny new debit cards, I promptly forgot the PIN for mine. Since I don't remember the PIN, and don't like to carry a lot of cards in my wallet, I just leave the card at home. We also leave the checkbook for this account at home.
The result is somewhat interesting from a money-saving standpoint. This account is what we use for all our household bills and purchases, BUT if we want to buy something at a store, we really have to plan ahead. When it's an impulse purchase, here's what happens...
ME (at the store): Hey, look at that great floor lamp (or weed whacker, or some other random household object)! We need one of those, don't we?
MY SWEETIE: Yeah, we could use one, I guess. It's cute isn't it?
ME: Yeah, and it's on sale!
MY HONEY: That's great, let's get it!
ME (crestfallen): Cool. Um, I don't have enough in my own account for this...
MY HONEY: Me either. That's okay, we can use the household account.
ME: I didn't bring my card. Do you have yours?
MY HONEY: Oh. Nope. I guess we can come back to get it later.
ME: Or we could put it on a credit card.
MY HONEY: (gives a stern look) We have the money in the household account.
ME: Yeah. So let's just get it later. It's on sale until Saturday.
On the ride home...
ME: We don't really need that lamp (weed whacker, etc.) anyway, do we?
MY HONEY: Nope.
And we go on with our lives, secure in the knowledge that we didn't just blow seventy bucks on something that we would have bought, enjoyed for about ten minutes, then consigned to the large amount of random stuff that comprises the backdrop of our existence.
