Doing These 6 Things Can Save You $2,000
There are few of us who would turn down a handful of cash, but to whittle it out of our own hard earned money may seem too hard to accomplish.
Does $166 sound like a lot though? If you break it down over 12 whole months, that’s what $2,000 works out to - $166 per month. How about $38 per week? Or $5.50 per day? See? ll you have to do is stop getting Starbucks every day and you win. End of article.
OK, we know it’s not as easy as that.
Let’s take a look at some of the little things you can tackle along the way. Buying name brand? Switch to no name for stuff you aren’t addicted to. Paying huge rates on your credit card? Apply for a line of credit and save a year’s worth of compound interest. Rock a boxed lunch a few times a week and save on take out. Just like a giant chocolate bunny, breaking it down into bite-sized pieces is the best way to take this goal down. You can do this!
1. Stop paying interest on your credit card.
Having a hard time paying down your credit card due to a high interest rate? Firstly, switch to using cash. Then, consider a line of credit. (LOC)
What’s the difference? Both have limits and will need to be paid off. Credit cards are pulled out for every day buys, while LOCs are used for larger costs like auto repairs or furniture. Many who commit to paying debt down will move their balance to a LOC in order to pay off a large amount at a lower rate of interest. (Just don’t run up the limits on both.)
Simply put: LOCs are beneficial for paying debt back faster. While the average credit card interest rate will be in the 11-19% range, the average LOC rate is 5% in the US.
Say you owe $3,000 on your credit card and can pay off $100 per month. A card that carries 19% interest will take you 3.5 years to pay down, and 50% of each $100 payment will go to paying off interest.
A 5% rate LOC for the same will take 33 months to pay down at $100 per month, but only 12.5% will go to interest. That change alone will save you about $300 per year - cash that goes straight to the credit card company as thanks for borrowing money from them.
Not sure how much you’re paying in interest? Try this Credit Card Interest Calculator to see how long it will take you to get back to zero balance.
Potential savings: Will vary based on your debt
2. Cut back on take out food and pricey coffee.
According to this article, Millenials are spending more money on coffee than retirement plans. The average American spends about $1,100 a year on coffee and that’s only a $3 per day average. If you regularly drop $5 per day on your triple hot-super-sprinkle-no-foam latte, you could save $15/week by simply cutting down to every other day.
Get the best coffee travel mug you can find and make your own every morning. Do you really relish waiting in the drive thru/line up every morning just to get your beverage? Investing $20 on a fabulous water bottle that you fill on your own can also save you a bundle.
The average convenience store bottle of water (500ml) will run you $1.50. If you were drinking your recommended 8 glasses a day - that’s $6 a day! Even if you buy by the discounted case, $2 a day in bottled water is still $60 per month!
As for take out food, according to the Motley Fool, the average American family spends $3,000 per year on prepared food (not counting groceries). A $12.50 per person average in a family of 4, means cutting back on just 1 restaurant visit or Skip the Dishes meal ($50 x 4 weeks) and 2 fast food lunches per week (Say, $10 each for the adults only is $40 per week), that’s $360 per month in savings.
A good meet in the middle would be to commit to take out and fancy coffee once or twice a week instead of a few times a day. Cutting back 2 days a week will save you $40 per month - or $480 per year.
Potential savings: $460 per month (bottled water, take out food, and coffee cut back)
3. Stop wasting stuff!
According to this article, Americans throw away an average of 1 lb. per person of food per day! A good place to start saving is to check expiry dates - are you throwing it away too fast? We don’t want anyone to get salmonella or anything, but some products carry dates that are suggestions, not must-dos.
Leftovers also tend to get tossed. Sheet Pan recipes can be a fun, healthy and cost-saving way to re-brand leftovers from lame to lovely. You can throw in extra veggies for additional nutrition and with so many combinations, you are only held back by your imagination!
Look for recipes low on cost but high on nutrition and flavour. Lentils are usually inexpensive, high in fibre and very versatile - toss into soups, salads or eat on their own. Shop in the bulk section to save as well. Depending on what you’re getting, you can save a few cents to a few dollars by avoiding the package. (Always check the ‘cost per 100g’ labels to compare to make sure it is a good deal and don’t buy more than you need.)
Try websites where you plug in on-hand ingredients and they’ll pair you up with a recipe that uses them all - finishing what you have in the cupboard before you buy more can be a great way to cut waste and save some bucks.
Frozen fruit and vegetables are just as healthy for you, but can be less expensive, especially when it’s the off season. They are conveniently going to last longer as well - freeze until you use instead of trying to find ways to eat all the bananas in time.
Potential Savings: Will vary depending on what’s in the house (and how much you like leftovers)
4. Buy no name brands and look for coupons.
This isn’t always universally true, but generally, no name products have the same ingredients as your name brand, but can vary greatly in price. Yes, sometimes you are just paying for the label.
Three Thrifty Guys did some digging for us in this article. Doing a quick comparison at their local chain grocery between name brands and the no name option showed a $6.25 savings on 5 regular items. If you’re buying bread, milk, OJ, cola and spaghetti sauce every week - that’s $25 saved each month, or $300 a year.
There are a plethora of apps that will deliver savings right to your phone. Loyalty shopping can add up as well - you can either earn points when you buy your regular stuff and/or get targeted deals sent to you to help you save some bucks. Watch out for loyalty credit cards - they often have ridiculously high interest rates - which will do the opposite of what you are trying to do.
Potential savings: Not counting coupons, minimum $300 per year
5. Cut or dye your own hair.
Just kidding. Unless you know what you’re doing. Seriously though - dying my own hair saves me a ton of money. My store bought red shade runs about $12 every 6 weeks. Going to the salon was more like $150. I think I look OK, but don’t do this if you have a tricky shade or want to go for something more challenging.
Potential savings: Hair dye vs. hair salon - $1200 per year
6. Turn down your thermostat.
You know that favorite cozy sweater you love to wrap yourself in? Put it on as soon as you get home and turn your thermostat down. According to this post, we can save about 3% of our heating bill for every degree we turn down our thermostat full time. Depending on where you live, this could add up!
We bet you have some cozy blankets and robes in the house - so make use of them and save some bucks. Let’s average that someone in a house pays $150 per month on heat or AC. Adjusting your thermostat by 3-4 degrees will result in $180 in savings annually. (If you had it cranked though - a 7 degree reduction would be $1,422.)
Potential Savings: $180 per year
Have a goal. Remind yourself of the goal.
What are you saving for? Changing habits to become financially healthier is terrific, but it can be really difficult to stay on track if you don’t have it in front of you. Are you saving for a rainy day? To go on a shopping spree? To pay off your debt and feel the burden lift?
Whatever it is, put reminders of it everywhere. If it’s saving for a car, make all of your passwords AcuraRDX17. Every time you log in (How many times a day do we do this? 30?), you’ll be reminded of what you’re trying to achieve. Keep a picture on your desktop, home phone page, bathroom. If you see your goal on a regular basis or when you’re about to make a bad decision, you might flip it around.
This is a long game, but it’s also going to create new habits. The trick is to be very specific about what you want to accomplish. Having an annual, quarterly, weekly, daily goal in mind is also key - hey, staying motivated for 365 days of the year is not going to be easy - just ask your gym membership in April.
Related Article: Vision Boarding 101: Manifest Your Future