Archive for the ‘Saving Money’ Category
Saturday, June 14th, 2008 |
Saving Money On Groceries
My wife and I made our weekly trip to the grocery store last evening. We normally shop for groceries on Sunday evening, but this week was different.
It is important to take advantage of sales on items that we purchase on a consistent basis, especially those that do not spoil. The Simple Dollar has a nice coupon strategy for this type of shopping that can often allow you to get items for free by using multiple coupons on a sale item.
No Tax!
Yesterday evening from 5:00-9:00 PM our local grocery store was having a no-tax sale. This even happens maybe a couple of times per year and we always make sure to take advantage of it.
Our grocery store also has a gas program whereby each gas purchase gives you $0.05/liter in store coupons. We have been saving these coupons for the last couple of months in anticipation of the no-tax sale.
When we heard that the no-tax sale was coming up, we made sure to add up our gas purchase coupons and search for additional coupons on staple food items during the month prior to the sale. (See coupons.com etc.)
With the arrival of our new baby, we have been intensely developing a price list at several stores for essential items such as diapers, baby wipes and baby clothing. We buy most of our baby clothing used from a local classifieds site or garage sales, but diapers and wipes are constantly on our watch list and my wife is always getting diaper coupons in the mail!
The Perfect Savings Storm!
With crippling gas prices hitting the nation, even my household with our two gas-sipping Honda’s is starting to feel the pain!
Enter the best coupon we’ve had to date!
We just received a coupon in the mail last week that offers double the cash back on one fill per month from our grocery store gas bar. Sweet! That means instead of $0.05 per liter of gas, we will get $0.10/liter for one fill only.
Knowing that the no-tax sale was coming up, drove both of our vehicles until they were bone-dry and proceeded to use the double savings coupon.
I know what you are thinking- “I thought you said it was only good for one fill”?
The coupon actually states that it is good for one gas “purchase”. So, without hesitation I filled both vehicles from the same pump so that it read one transaction of ~88 liters, or $8.80 of store credit.
I view gas purchases as somewhat of a necessity, so the additional $4.40 in grocery store credit was certainly worth it to me.
Adding Up The Savings
When all was said and done, our grocery bill shrunk substantially from $86.48 all the way down to $53.11.
A savings of $33.37 just by using some simple planning and being aware enough to combine a few savings strategies into one shopping trip.
One of the many complaints that I hear about people who don’t use coupons is that it takes too much time in comparison to the savings that can be had. While I did not count the minutes that it took to decide on the choices to make in order to make this shopping trip, I highly doubt it exceeded $33.37 worth of my time.
Do you have any favorite money saving tips or tricks? If so, please leave them in the comments…I’m always up for saving a few bucks!
Posted in Saving Money | 1 Comment »
Monday, April 21st, 2008 |
As many regular readers know, I have just become a father for the first time. When my wife and I first found out about the pregnancy, the “financial manager” in me quickly listed the following things off in my head as financial “to do” items:
- Update estate plan and will
- Increase life insurance policies
- Start education savings plan for child
- Increase monthly expense budget
- Increase emergency cash fund
Where To Start?
The biggest thing on my list of to-do items was to increase the amount of money that we saved in our ING Orange Savings Account 
cash reserve fund each month.
The reason that this was the most important thing was because the money in a high yield savings account could be easily re-directed where it was needed most. There were several larger items that we had to purchase. We tried to purchase the majority of the required items second hand (except for a car seat for safety reasons).
In addition to physical items for the baby’s care; we also had to do some minor renovations to our house such as painting the nursery room, decorating and updating the air exchange system. All of these require cash!
New Financial Territory
While I am OK with the increased spending due to the addition of another member to our family, it is very unfamiliar territory to me financially. Because it is such new territory for our family, we are going to begin tracking our monthly expenses even more closely(using Quicken) until we can determine the actual additional requirement. Prior to that, we have decided on a relatively arbitrary amount to add to our cash reserve.
We decided to add an additional 5% of our net income to our emergency fund due the arrival of the baby. This figure was arrived at by using a rough estimation of the added cost of the baby’s essentials to our own essentials. Of course everyone has a different interpretation of “essentials”, but I am still wondering if this amount is enough?
I will certainly find out how close my estimates have been after a couple of months of tracking the expenses in our new catgories…What do you think of my estimates?
Posted in Saving Money | 9 Comments »
Wednesday, March 19th, 2008 |
There is but one constant in building wealth and that is to spend less than you earn. If we boil it right down to the simplest of forms, you can never be rich if you spend more than you make.
How Much To Save?
Every financial book out there will throw out a number or percentage of your pay that you should save and invest for retirement etc. but there is no magic number that works for everyone.
Some have said that saving or investing 20% of your income is a great amount and this is attainable by most folks if they make the correct lifestyle choices.
Some have loftier goals, such as Trent over at the Simple Dollar, who recently advises newly graduated workers to save 50% of their take home pay! While that may seem unattainable, let’s look a little closer at the idea.
Buying Freedom
If you are reading this blog, then you are looking to make more money, save more money, or find a way to retire earlier. Now that we have agreed on that point, let’s examine another point.
When I recently wrote about automatic savings accounts like ING Direct and why I believe they are essential, I also mentioned that they are useless unless there is a goal attached to it. The reason that they are useless without a goal is that there is really nothing stopping you from spending that money unless the reason that you are saving it is stronger than your desire to fulfill your “need” for immediate gratification.
For most of us, saving 50% of our income seems unrealistic. I’ll admit that it seems daunting to me at the moment as I am expecting my first child in a few weeks (kids are expensive pregnant wives are expensive).
Making Choices
The amount that we save really just depends on our choices. This is no secret, but it has been the basis for many successful personal finance books, from the Automatic Millionaire to the Wealthy Barber, it’s really all about choices.
I made the choice to save more than 50% of my income for nearly two years as I saved in order to write that big cheque that paid off my $40,000 in student loans less than a year after leaving college.
What was the trick?
I lived like I was still in school (I was still in school for one of those years, but working full-time too).
Back to the conversation at hand.
We must have a certain level of income to provide us with shelter, food, water, and clothing; everything else is optional.
The Options Make The Difference
The optional items that we choose to purchase with our disposable income are what make the difference in our wealth. Again, a simple concept that has sold many millions of books.
The optional items that we choose in order to increase our comfort cost us money. That is the surface of the conversation. However, when we look deeper into what it is really costing us is time/freedom.
The argument for saving 50% of your income translates into buying one year of freedom for each year worked. In addition to this, the effects of compounding also come into play.
For each year that we save and invest 50% of our income, we are earning more and more freedom - assuming we keep our expenses at the same level relative to inflation (annual salary raise).
Going Overboard
This example is very extreme and may be viewed by some as going overboard. However, it does prove the point that it was intended to make.
At some point in your quest to save more money, you will reach a crossover point where you begin sacrificing your basic lifestyle for savings. This is not healthy either because you can never tell what tomorrow will bring.
I believe that each person or family must find that delicate balance between a comfortable and enjoyable lifestyle and the emotional and psychological benefits of a secure financial future. I am sure you will agree that this is much easier said than done.
How To Start Saving
The way I started automatically saving money was to set up a separate high interest savings account to which I began having automatic transfers made on each pay day. I have since kept increasing that amount as I find new way to make more money or spend less. Some months I am able to increase the transfer by just a few dollars, while other months I find ways to make a significant increase in the automatic transfers.
Try it out for yourself and see how far you can push yourself and just how much you can save when you are consciously thinking about it.
If you don’t already have a high interest savings account, you can sign up here at ING. They even offer sub-accounts so that you can compartmentalize your savings. I have a sub account strictly for the new baby and another for funding my brokerage account. I find that sub-accounts make it easier for me to organize my saving goals.
There is no “one size fits all” solution, but I hope that this example will help you to find yours!
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Friday, March 14th, 2008 |
Over the years I have encountered many people who swear by the “paying yourself first method” and setting up an automatic savings account where money is transferred from each paycheck to a savings account like The Orange Savings Account at ING Direct. 
that is to be used for a specific purpose. I too have automatic transfers to my investment account and I try to make it hurt!
What I mean is that I transfer more and more money each month to my savings and investment accounts until I am literally down to my last few dollars at pay day. Yes, I do have a line of credit set up and an emergency fund of cash just in case. However, I actually enjoy challenging myself each month to save and invest more than the previous month.
The whole idea behind this strategy is to have the money move automatically so that you don’t “see” it and therefore will not miss it. In theory, this is a great idea but it does have a downfall for those who are first beginning the strategy.
Commitment Requires Goals
The downfall of this strategy is that you must be committed to a certain goal. That is, the savings account must have a purpose that is so strong that it will allow you to have the will power not to touch it except for that purpose.
You see, setting up this automatic savings account is well and good, but it doesn’t reach the root of the problem. If you are currently unable to save money, what exactly is having the money “automatically” sent to a savings account going to do? It is a start, but the key is not to succumb to your ingrained desire to spend.
You must set a goal that is powerful enough for you to want to save for it above anything else. I recently told you the story about my brother wanting to save for a house, but ended up succumbing to his desires, purchasing a car that he can’t afford.
Avoid The Quick and Easy
In order to reach in goal in life, you must be willing to sacrifice something.
Please read the previous sentence again. When you truly understand this concept, you will be substantially further ahead than the majority of your peers.
This doesn’t apply just to saving money, it can apply to every goal that you have. If you want to get better grades in college, then you might have to sacrifice going to that killer party on Saturday night.
In my brother’s case, he wanted to buy a house but he wasn’t willing to sacrifice driving a new car in order to save for the down payment for the house. He knows he can’t have both and he could get financing for the car now and he would have to wait a year or two for the house. He had an automatic savings account set up for the house, but when he saw the car and realized he had enough for the down payment on that…you get the picture.
It is quite simple. Nothing is going to be handed to you; you must make choices and decide what is most important to you. However, if you keep taking the easy way out and letting the daily temptations get the best of you then you are doomed.
Making Tough Choices
Trent over at The Simple Dollar just posted a nice article on how to make financial choices in order to start your automatic investing account and watch it grow. I suggest you read that article and decide what you can do without in order to start saving automatically and reach your goal.
No matter what you decide, please remember that there will be temptations along the way. It is up to you to figure out what is most important for your future.
I suggest opening an Orange savings account at ING Direct for building an emergency fund or saving for a specific goal. I also automatically transfer funds each month to an investment account for purchasing stocks or ETF’s. For low fees and great flexibility for purchasing dividend paying stocks, I recommend ShareBuilder
for your 401K and /or brokerage account.
Posted in Saving Money | 4 Comments »
Friday, January 4th, 2008 |
Every adult could cut down on their spending somehow. Almost everyone’s guilty of overspending on themselves at some point, be it through new clothes, weekend activities, or an expensive holiday. However, it’s not just on leisure time where people are guilty of the most wastage. In fact, some of the most significant and incomprehensible waste comes through not shopping for financial products thoroughly. People often agree to loans through their bank, often which could be cheaper elsewhere, while many people take the first insurance policy they see just to be done with the whole boring procedure of shopping for it. But saving money is not boring, especially when it’s potentially hundreds of pounds a year.
Car Insurance
Like many things, your car insurance renewal appears at a time of the year when you need it the least. If you’re really unfortunate, then it will come at the same time that you’ll also need to pay out for your car tax and M.O.T. It’s common for many people to stay with the same insurer year on year because they think they’re getting the best deal, they don’t want to take time to shop for another, or because of customer loyalty. All of these reasons are really quite absurd when you think of the potential money saved by switching insurer. If you’re thinking of sticking to a brand out of loyalty, and you’ve never made a claim, just think - what have they ever given me? If your insurance renewal date is coming up, then take a look at ASDA Finance car insurance quotes from a panel of insurers. Co-operative insurance is also a great site to check for affordable car insurance.
Bank Account
A lot of banks give risible rates for AER on their bank accounts. Worse still, they then charge for the privilege of having an overdraft facility. Banks get away with this kind of poor service because few people want to go through the apparent effort of switching bank. However, all it now takes is a ten minute internet form with Alliance and Leicester, and you’ll get the best of the bank accounts on the market. It has a 0% overdraft facility of up to £2,500 for 12 months upon opening the account, along with an 8.5% AER on balances up to £2,500. This could either make or save you hundreds of pounds a year, and they take care of switching all of your direct debits and standing orders.
Rates correct at the time writing (20/03/08).
Gas and Electricity
Switching gas and electricity may seem like a big job, but thanks to comparison websites such as Simply Switch it’s really not that difficult. By following easily filled forms, it can just take minutes. Before you do this, however, it’s well worth checking on a provider’s customer service, and if they provide discounts for account holders or other services. British Gas has a good homecare service that can take care of your boiler and drains for a low fee every month.
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Wednesday, January 2nd, 2008 |
Here comes the bride - but is she insured? Travel insurance for that “special day”
Getting married abroad is becoming ever more popular. With the cost of weddings in the UK reaching an all time high, it can be a cheaper option and in many cases more spectacular. However, when you are making all of the arrangements there is one thing that you should certainly not forget - comprehensive travel insurance. Many online travel insurers are now offering cover aimed specifically at those planning a wedding in a different country.
So what can you expect from wedding travel insurance? You will normally receive all of the things that you can expect from standard travel insurance, plus additional extras tailored to help financially should your wedding suffer some unforeseeable set backs. Obviously what is covered varies from provider to provider and so it can be helpful to visit a travel insurance comparison site, such as Travelsupermarket.com, in order to see what is on offer.
The standard cover will insure you against any eventuality on your holiday. For example most insurers cover you for Medical Care, so if you end up in hospital you can claim back the cost of treatments and operations. What’s more larger travel companies, such as Go Travel, provide a 24/7 emergency helpline on which you can make claims and also get advice when you take out their travel insurance.
One top of this there is payouts for lost, or stolen, luggage; flight cancellations; holiday cancellations due to personal illness; and so forth. There will also be a one-off cash payment should you have an accident and end up with a long-term disability. The amount that you receive depends on the severity of the injury and your age. What’s more, in the unlike event of an accident leading to death, there will be a lump sum paid to your next of kin.
The first thing that wedding travel insurance provides, above and beyond the standard cover, is loss or theft of items crucial to your wedding. This should cover the rings and clothes, such as the all-important wedding dress. However, it also covers other items that you will receive during the event such as wedding gifts and those irreplaceable wedding photographs and videos. As an example, AA Travel provides specialist travel insurance cover of up to £250 for rings, £1000 for gifts and £1000 for wedding related attire.
Another added benefit is that some companies will pay to hire a new photographer should the one that you have arrange not turn up on your special day. What’s more this is designed to cover all eventualities. For example if the photographer is ill, or injured, then you will be covered. Many polices also provide cover should the photographer be unable to attend due to unforeseen transport problems. So if they’re held up on your all-important day you should be able to book a new photographer and still capture all of those special moments. With this type of cover you will have to pay the fees and then reclaim the amount at a later date, so it may be a good idea to have some extra cash on standby in case of emergencies.
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Wednesday, January 2nd, 2008 |
There is a simple way of reducing the amount of fuel that you use, and once this has been done, your costs will fall. In fact you can reduce the cost by up to 40% of your current use. So what is this easy way of saving money? Simply replace your old boiler for a newer benefit and you’ll be financially better off in the long term. Also by changing your boiler you will also be protecting the environment by helping to reduce the total energy used worldwide. You could also be making your house safer by reducing the CO2 emissions in your immediate environment.
There are currently three main types of gas boiler in general use in the home today. Firstly there are the now obsolete back boilers. If you still have this type of boiler in your house then it is certainly time that you considered an upgrade. Not only is an upgrade necessary because of the amount of money being lost is taken into account, it’s also a vital consideration when the overall safety of your home is considered.
Current UK building codes state that these older types of boilers need to be replaced for safety reasons. Back boilers are placed at the back of the fireplace or room heater - the problem with this type of boiler is that they require an air vent to allow harmful fumes to escape from the room. Not only do these vents allow dangerous fumes to escape, but they also allow the valuable heat to escape: this type of boiler is only 60% efficient.
The next kind of boiler is the well-known combination boiler or combi boiler for short. Combi boilers activate on demand, which means that when they aren’t in use they switch off, saving energy and saving you money. Another advantage of this type of boiler is that they are fairly economical when it comes to space. They do not require water tanks or cylinders so they can be fitted into an airing cupboard or other small area within the home. Many flats or smaller living spaces have combi boilers installed.
Finally there is the regular or “heat only” boiler, which requires a separate water tank but which can offer greater output if you have large demands on both heat and hot water. These are best suited to large family homes.
Both combi and heat only boilers are available as condensing boilers. The condensing boiler is by far and away the best type of boiler for those wishing to save more, and help protect the environment. They work more efficiently by recapturing heat and then redistributing it throughout the house. Also, because they’re recapturing heat, it takes less fuel for them to heat up in future. All of this helps condensing boilers to be extremely effective - they are in fact 88% efficient. Of course there is a high initial cost for this type of boiler, but it is well worth the cost when future savings are considered. There are also fewer qualified condensing boiler experts around, although if your energy provider is one of the major providers, such as British Gas, then having a new boiler installed shouldn’t be a problem as they will get a CORGI registered engineer to install it for you. They can also provide annual boiler maintenance – take a look at their website for more.
So there you have it. The simplest way to reduce your energy bill and save money is to change your boiler. At first it may seem like rather an expensive solution but, when you consider the amount of money that you are going to save in the long run, it is certainly the best thing to do. Also, the newer boilers are more environmental friendly, and reduce fuel use and CO2 emissions dramatically. Finally, the new boilers are a lot safer and take up less space.
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