Here are 8 money saving tips you may not know about.
1. Get Excited About Saving Money
The first step is to get excited about saving money! Learn about the benefits of being frugal. Perhaps even learn how to become frugal yourself. There must be some good reasons for being frugal. Just ask any frugal person. Most of them will enthusiastically give you all the reasons why and then give you 10 ways to save money.
I am frugal myself and I think anyone who isn’t, rich or poor, is either being foolish, ignorant, or brainwashed by product advertisements.
Get on board the money train and save!
2. Chart Your Monthly Expenses & Create a Budget
You can find many ways to save money once you get visibility of where your money is going. You cannot do this until you chart all your monthly expenses. This means making a list of every place you spend money during a full calendar year, and beyond if necessary to account for everything.
You can do this by creating a personal budget on a spreadsheet or a sheet of paper. Once you have all your monthly expenses listed on the left and your expenditures entered into each month of the year, you can look for ways to cut your expenses. In cutting expenses on things that you have control over, researching items for possible rate reductions, and negotiating lower prices on other things you are in effect creating a personal budget.
Many people have negative associations with the word “budget.” These negative associations may conjure up feelings of being limited, restricted, or even controlled. Until your motivations come from a positive source, you’re not going to get very far.
A better way to look at a budget is as it being a goal for something positive like financial freedom, a new car or house, or a vacation! Then you become a willing and motivated participant and contributor.
3. Shop for Better Insurance Rates
Insurance companies often set up coverage rates for reasons that have nothing whatsoever to do with you. Sometimes rates are changed to attract new business. Other times premiums are changed to meet regulatory requirements, industry measurements, or financial obligations.
For this reason it’s a good practice to shop for better rates on your health, auto, and home insurance every couple of years. Some of you are going to immediately become concerned about how things will play out with your agent –- perhaps one that you’ve been with for many years.
If you found out through your research that you are paying much more per year with your current agent than what you could get with another reputable company, would you allow blind loyalty to stop you? I say blind loyalty because until you’ve done the research you are blind! By the way, I am not encouraging comparisons with low rated insurance companies whose commercials look enticing but their products and services lack credibility. Insurance is too important of an issue to entrust to a questionable company.
You may not have to change agents though. Once you shop around, learn more about your options, and then give your agent the opportunity to look for ways to reduce your premium, s/he may meet or exceed what you discovered during your research. At the very least, your agent might be able to get close enough to satisfy you. The most important points to remember are that this is business and it’s your hard-earned money.
One of the best ways to reduce your insurance rates significantly is to increase your deductibles. Many people tighten up when changes to deductibles are mentioned because they put themselves into the future and imagine paying them. Here’s another way to look at it. Let’s look at automobile insurance. If you haven’t been in an accident in 10, 20, or even 30 years, you’ve spent a lot of extra money for the so-called peace of mind of having a low deductible. If you are a careful driver who rarely if ever gets into an accident and you have enough money in the bank to cover a higher deductible, you should look at increasing your deductible. Consider this example.
Plan A – Your annual automobile insurance premium is $1,100 and your comprehensive & collision deductibles are $250 each.
$1,100 X 20 years = $22,000
Plan B – Your annual automobile insurance premium is $700 and your comprehensive & collision deductibles are $1000 each.
$700 X 20 years = $14,000
Difference in annual premium over 20 years: $8,000
With the money you saved using plan B (higher deductible), you could have paid both the comprehensive and collision deductibles once during the 20 year period and had $6,000 leftover!
Typically, your home insurance coverage is packaged with your vehicle insurance. Therefore, you can discuss ways to reduce your premiums in this area as well when you talk with your current or new agent.
Comprehensive covers damage caused to your vehicle by anything other than another vehicle. This includes vandalism, acts of nature, and car theft.
Collision covers damage caused to your vehicle due to a collision with another vehicle. You are usually only required to pay the deductible when it is determined that you were at fault or the other party has no insurance and you have no uninsured motorist coverage.
There are other ways to reduce your vehicle insurance premiums including eliminating tow service and rental car — if you are not prone to accidents, and medical coverage — if you have solid coverage through another source. Even uninsured motorist coverage may not be needed in your particular situation.
Discuss these options with a licensed agent that you trust. Your objective is to secure accurate protection of yourself, your passengers, your vehicle, and your assets (home, money). I say accurate because you want to match your insurance coverage with the actual value of your vehicle and assets. Paying a higher premium for coverage that greatly exceeds the value of your vehicle and/or assets is a waste of money.
When it comes to health insurance, changing your deductible is a completely different matter. It all depends on your age, health, medical needs, career status, and financial position. It’s important to check rates every couple of years, however, as premiums and coverage can change significantly between companies.
As an entrepreneur, I’ve been paying for my own health insurance for many years. I’ve been using eHealth Insurance since the beginning to search for the best rates and to process my application. The service that I’ve received from eHealth Insurance has been outstanding!
You can use the eHealth Insurance website to get a quote from ALL the leading health insurance providers in just a few seconds by entering just your zip code, sex, and date of birth. (No email address or other information is required.) Then you can compare provider features, dive into coverage details, and complete the application online. I use eHealth Insurance every time I want to compare rates. As a result of finding better rates a few times, I have changed companies using their online application and called them if I had any questions. It has worked extremely well for me.
4. Shop for Better Telephone & Cable or Satellite Television Rates
Telephone and television services are very competitive industries. Consequently, they are constantly changing their rates and offering new packages and specials. It’s worthwhile to do some research to find out if you’re getting the best deal. Some companies offer a lot of free stuff just for switching over to them, so sometimes it won’t cost you anything to make the change. You’ve got to ask the representative about current specials when you call though. And don’t be afraid to ask them how they can sweeten the deal if you are switching from another company or setting up service for the first time.
There are many ways to get better long distance rates than landline telephone companies’ offer. There are 1010 numbers, Internet-based telephone service providers, and even prepaid long distance cards that offer good deals.
I used a 1010 number for many years without any problems. I think the rate was 5 cents a minute plus a small connection fee and taxes. When you make a long distance telephone call using a 1010 number the charges are added to the bill of your existing landline telephone service provider.
Update: 9-6-11 - I now use Google Voice for all my long distance calls. It’s free and it works great.
Update: 12-9-11 - I now use MagicJack for all phone calling needs. I kept the Google Voice number to use for business. Read my review on the Magic Jack in this article entitled, “Reduce Expenses by Cutting the Chains.”
5. Eliminate Premium Telephone, Television, and Internet Services.
How many of the extra telephone services, like call waiting and caller ID, do you really need or use? When you first sign up, telephone company representatives make those features seem like they are an absolute necessity. Of course, they have memorized a carefully crafted sales script that has been refined over many years! And they are probably given an incentive or bonus for selling these extras.
Look over your telephone bill and drop the services that you don’t really need or use. It all adds up!
Honestly do you really watch all 900 channels that your cable or satellite television company allows you to watch… for a rather substantial fee! Aside from just the money issue, aren’t there better ways to spend your time? Take the first step toward more reading, learning, and communicating by reducing your television services to a minimum that’s acceptable to you. You’ll save a lot of money and waste a lot less time.
Cable Internet providers often try to sell you on upgrading your service to a “faster speed” on the basis that it will greatly enhance your online experience. What a crock. Those faster speeds only benefit you when you are downloading or uploading a file and how often do you do that? When you are just surfing the Web doing normal things like processing email, reviewing your bank balance, paying your bills, buying a product, posting comments, or working on your website(s) there will be little if any noticeable difference with the higher speeds. So why pay extra for it. Just get the basic service. I don’t have any experience with satellite providers, but I would guess that it’s a similar situation.
6. Shop Dealerships for Vehicle Maintenance & Repairs
It is often assumed that factory authorized dealerships charge the same amount for scheduled maintenance, repairs, and even accessories. This is not true. The amount dealers charge for scheduled maintenance can vary significantly. The amount they charge for repairs can vary greatly! The game changing Car MD device can tell you exactly what’s wrong with your car so that you can avoid getting ripped off.
The only time dealers must charge the same amount is when they send out coupons as a group with the total price listed for each featured service and/or part. When the coupon only offers a dollar or a percentage discount off the price then the dealers can charge whatever they want.
When you need a scheduled maintenance, repair, or accessory, call around to at least three (3) dealerships in your area even if one of them is a considerable distance away. I’ve always been amazed at the difference in price.
There is another way that you can save money when you go to a dealership for factory recommended scheduled maintenance. Only allow the dealer to do what is recommended by the factory as shown in your owner’s manual. Also, do not automatically agree to “dealer recommended” additional services. In most cases, you do not need them. Your service advisor may use various tactics to get you to do these extra services, so be on your toes. And don’t be afraid to ask questions.
7. Shop for Better Rates on Regular Services like Drying Cleaning, Hair Care, & Vehicle Wash
We all get into the habit of doing business at the same places. The problem is sometimes new businesses open or old ones remodel that offer much better prices, products, and services than the store or individual we’ve been using for years!
Most of your research can be done by telephone. Just call each of them and ask for their price on the services you regularly buy.
8. Shop for Better Rates on Professional Services
Many people would never consider comparing the fees they are being charged by their dentist, medical doctor, accountant, or lawyer. As the years go by and their fees gradually increase, your dentist or other professional may become the highest priced provider in your entire area.
If you notice that your doctor bought a new high-end luxury vehicle and then your rates suddenly increase dramatically, it’s time to find another doctor. I had this happen to me with my dentist. Once I looked into what other dentists were charging , I was amazed at how high my own dentist’s fees had become. I did some research and found a dentist who I liked better and charged 25 percent less!
Another option is to join a discount dental plan. This is a network of dentists who have agreed to offer their services at a lower cost. Your current dentist may be a participant.
There is another way you can save a huge amount of money with professional service providers. Do not automatically agree to their recommended treatment or service plan. Always ask them to tell you about all the other less expensive options. Then ask them as many questions as you want. Remember, doctors, dentists, and other professionals are business people too. And many of them have underlying motivations to make as much money as they can while still maintaining their ethics –- hopefully.
Choosing a less expense option does not necessarily mean that you will get an inferior treatment or service. It may be just as good or it may suffice for now and meet your current financial situation.