Always seem to be short on cash or are you in debt? How do you survive in this current economic state without selling off your kidneys? There are many ways to stop splurging and start saving but the question is how far are you willing to go and how much are you willing to let go.
Here are some advice from experts who have managed to do it, and some earn a bit of money in the process.
- Lose the wheels
As much as you need a decent car to get about town in our country, the public transportation system has improved over the past years and you can actually take the bus, LRT, monorail and taxis to get to where you want. If you feel unsafe, carry an umbrella or pepper spray to protect yourself wherever you go.
Author of “Frugillionaire: 500 Fabulous Ways to Live Richly and Save a Fortune,” Francine Jay says when you go carless you save a fortune by doing away petrol, registration, insurance, maintenance, repair costs plus lease or loan payments.
Jeff Yeager, author of “The Cheapskates Next Door” who shares a car with his wife says that it is better to rent a car when necessary.
“Think about how much of the time your car is sitting unused. It’s just a tremendous waste of resources.”
Sharing a car would be a good option for people who occasionally run errands as “it’s more financially savvy to borrow than to own,” says Jay.
2. Rent it out
If you have an extra room in your house, why not make some extra cash by sharing your living space with someone else?
“I always encourage people to at least consider getting a home that could allow them to get some rental income, such as a duplex,” says Yeager.
Renting out for the past 20 years, he and his wife were able to pay off their house in 15 years instead of 30.
“The beauty of it only begins with the monthly rent check you’re collecting. Obviously, there are incredible tax benefits to it, too…and much to our surprise, my wife and I found that it’s actually nice having other people around,” he testified.
Sometimes too big is not a good thing and if you think that you are not making full use of your big house, sell it and buy a smaller one. This will add more money to your bank account.
“The best way to save big money is to cut big expenses – and housing is the biggest of them all,” said Jay.
By downsizing your bungalow to a terrace house, you can lower your mortgage and rent including utility bills.
“A smaller space will slash your spending, because you can’t buy things when you have no place to put them,” added Jay.
According to Yeager, “People don’t really stop to think about it, but for every square foot that they add to a house – square feet they often don’t need – first they have to buy it, then they have to maintain it, they have to pay property taxes on it, they have to insure it, they have to decorate it, they have to heat it ad so on.
4. Credit Card – cut it or use wisely
Desperate situations call for desperate measures. You may be reluctant at first but cutting up your credit card could be the best thing you have ever done to your bank account.
Expert Jay recommends paying with cash as, “This strategy saves you a bundle in finance charges and puts the brakes on your shopping habit; because without credit, you can’t spend more than the money you have.”
She also says that paying with plastic is easy and you feel like you’re getting something for free. Handing over cold, hard cash will make you think twice about spending.
For at least a month, go cash-only, said Yeager.
“If you don’t have the cash on you, it might give you reason to stop and think (before buying),” he says.
“I always think spending procrastination is a virtue, not a vice. Put off buying until tomorrow what you want today, and maybe you’ll change your mind about whether you really want it.”
Penny pinchers sometimes purchase only when they have coupons and stockpiling goods for future use.
Sage advice from Jay suggests to “ditch the brand loyalty, and be open to alternative products or generics” to save groceries.
“Be adventurous and try out that bargain-priced shampoo, cereal or detergent,” says Jay. “If you’re shopping online, search Google for coupons before making your purchase; you’ll be surprised how often you’ll find vouchers for free shipping and other discounts.”
Yeager says many people believe coupons will result in unnecessary spending.
Coupons are popular for penny pinchers who eat processed foods and have a lot of storage space.
Instead of doing that, Yeager prefers to “go into any grocery store at any time and come up with a delicious healthful meal that’s really cheap without ever having to use a coupon.”
6. Say Goodbye to High Tech Toys
Life without gadgets can be rewarding because you will spend less time online with your ‘friends’ to spend quality time with your real friends. Also, there is no harm in waiting for the prices of gadgets to drop. Sure, it could have the latest technology and the coolest specs but just wait a few months and you will find it to be a bargain.
Cheap Chick blog writer, Erin Schneider suggests to cut down on unnecessary services – “cut down on cell minutes, cancel your home phone, cancel your gym membership” – and opt for the least expensive options.
For example, get a cheaper mobile plan or jog at your neighbourhood park. You not only save money but it could benefit you in the long run.
Yeager also agrees to wait if you want to purchase high-tech toys because the price will drop over time and the problems found in the first version will probably be reduced in following generations.
“Its like the old Elvis song ‘Only fools rush in’ when it comes to buying tech gadgets the day they’re released,” Yeager comments, who never owned a mobile phone before and refers them as “electronic tethers”.