365 Ways to Live Cheap (2 page)
What does that number mean? You can use that as a comparison for everything that you do.
Thinking of buying an expensive gadget? Use that real hourly rate to figure out how much of your life you’re giving to your job to get that gadget. Wondering if a money-saving task is worth it? See how much time it will take and how much money it will save. You’ll be very surprised—things like making your own laundry detergent (tip #18) end up earning far more in savings for the time spent than actually going to work will earn you.
5. R
ECORD
E
VERY
P
ENNY
Y
OU
S
PEND FOR A
M
ONTH
Money slips through our fingers in simple and subtle ways. We spend a little here on something forgettable, spend a little there on an unimportant thing, and at the end of the month, it’s panic time—we’re left with very little money. Spend a month keeping track of every penny that you spend, noting exactly how much you spent and what you spent it on. At the end of the month, go through it and note which expenses were actually essential and which were frivolous. You’ll find two things: The need to write your spending down makes you more vigilant against wasteful spending, and the end-of-month review of your records will surprise you when you see how much of your spending was nonessential. Use that information as a springboard to see what you need to work on.
6. M
ASTER THE
T
EN
-S
ECOND
R
ULE
Want to curb that leaky faucet of unnecessary spending? Here’s a great tactic. Whenever you’re in a store and you pick up an item, hold it for ten seconds. During those ten seconds, ask yourself if you really need it and also if that money wouldn’t be better used somewhere else. You’ll almost always find yourself putting that unnecessary item back on the shelf and walking away, quite proud that you didn’t waste your money on something so unnecessary.
7. M
ASTER THE
T
HIRTY
-D
AY
R
ULE
, T
OO
It’s useful to use a similar approach with bigger purchases as well. Whenever you pick up an expensive but not immediately essential item (anything that costs more than $20) and decide after using the ten-second rule that you do want to buy it, put it back on the shelf and wait thirty days. If you still remember and want the item in thirty days, then go back to the store and buy it. Most such purchases will float out of your mind long before then. Using this tactic keeps you from making impulsive buys of expensive things that manage to get past your ten-second filter.
8. K
EEP
T
RACK OF
Y
OUR
P
ROGRESS
Each month, figure out how much you earned, how much you spent, and how much you saved that month and record it. Then, try to match that number the following month. This is, in effect, the simplest form of budgeting—you’re merely trying to keep your spending under control from month to month. It also lets you see your continual progress. If you were able to live a bit cheaper and put just $50 a month into savings for six months, for example, you now have $300 saved up, showing you that your little changes are really adding up to something big.
9. T
ALK ABOUT
Y
OUR
M
ONEY
, E
SPECIALLY WITH
Y
OUR
P
ARTNER
Many couples and families have a chaotic approach to money, with each person doing their own thing financially without understanding their partner’s goals, desires, and challenges. Often, this results in partners hiding information from each other, such as high credit card statements and other debts, and this not only damages a family’s financial situation, but can also damage a marriage. Take the time to sit down for an hour every month or two and go through your complete financial picture with your partner, including both your successes and mistakes. Plan goals together, and actively support each other. If you’re single, identify a “money buddy” whom you can be similarly open with. You can support each other in making good spending and financial choices and offer each other advice in difficult situations.
10. A
UTOMATE
Y
OUR
S
AVINGS
One nice thing about saving money is that you end up with more in your checking account over time—the savings slowly build up. For many people, the problem with that is that the extra money is a temptation to spend on unnecessary stuff. The solution is easy—just save automatically. Have your bank set up an automatic transfer of a small amount each week from your checking to your savings—say, $25 for starters. As you get more adept at saving money, increase that transfer amount, and keep saving. That money can help out in emergencies, help with a big payment, or provide the starting material you need to begin investing.
C
HEAP
T
ACTIC
$
FOR
A
PPLIANCES
12 Reliability Is the Most Important Feature
13 Look for the EnergyStar Logo
14 Consider Last Year’s Models
16 Use Cold Water for Most Clothes Washing
18 Make Your Own Powdered Laundry Detergent
19 Air-Dry Your Clothes Instead of Using the Dryer
20 Don’t Use the Stove When the Microwave Will Do
21 Turn On the Oven Light While Cooking
22 Only Wash Full Loads of Dishes or Clothes
24 Make Your Own Dishwashing Detergent
25 Don’t Install Your Refrigerator Next to Your Dishwasher or Oven
26 Set Your Refrigerator to the Warmest Setting; Adjust from There
28 Start an Automatic Appliance Replacement Fund
11. D
O THE
R
ESEARCH
The biggest mistake you can make when purchasing a new appliance is to head right down to the local appliance store and open your wallet. Do some research into different models and find out more about them. How reliable is the model? Does it do a good job at the task you want? Is it energy efficient? What’s a reasonable price for that model? You can find the answers to all of these questions on the Internet. Spend half an hour studying archives of
Consumer Reports
or other consumer publications and find out what they say about the appliance you’re considering buying. Just find an article covering the appliance that you’re looking at, see what the study has to say, and find a few models that are appropriate for you—not whatever models the salesperson at the shop wants you to buy.
12. R
ELIABILITY IS THE
M
OST
I
MPORTANT
F
EATURE
The number-one feature that you should look at when buying a new appliance is reliability. Paying a bit more now for an appliance that will last twice as long is a great way to save money over the long haul. A $500 washer that lasts ten years is a far better deal than a $350 washer that lasts only five years. Neat features are nice, but reliability is the one feature that will help keep money in your pocket over the long haul.
13. L
OOK FOR THE
E
NERGYSTAR
L
OGO
After reliability, the most important feature is energy efficiency. Look for appliances that are EnergyStar certified. These appliances use less energy than those without the certification. Also, compare the energy use numbers among models. They’re usually stated in kilowatt-hours per year. Every kilowatt-hour costs you about ten cents on your electric bill, so if you can get a model that uses one hundred fewer kilowatt-hours per year, you’ll save $10 per year owning that model over its lifetime. That can really add up over the lifetime of an appliance.
14. C
ONSIDER
L
AST
Y
EAR
’S M
ODELS
When you’re shopping for appliances, most of the models that you’ll be shown are the current year’s models, but most appliance stores often have last year’s models still available in the back, still new and often at a discounted rate. Research last year’s models as well (using older issues of
Consumer Reports
) and if you find one of those for sale at a discounted rate, snap it up.
15. S
HOP
P
ATIENTLY
In order to find the best price for the appliance model you want, you may have to shop at several places. Take your time with this purchase. You’re far better off shopping patiently and finding a good price on the model you want than just buying that model at the first place you go, or buying whatever model is on sale at that first store you visit.
Another tip:
When you know you’re about to make the move to replace a major appliance, watch the flyers for appliance sellers in your area. If you’ve done your research, you should know the expected price on the models you want. A sale on that model can really pay off.
16. U
SE
C
OLD
W
ATER FOR
M
OST
C
LOTHES
W
ASHING
The Alliance to Save Energy reports that using cold water for most of your clothes washing saves up to $63 per year. That’s because 85 percent of the energy used when washing your clothes is used not by your washing machine, but by the water heater. Most clothes that are not intensely dirty are made just as clean in cold water as in hot water, so give it a try, particularly on your underclothes and towels. If you feel like cold water isn’t giving your clothes an appropriate cleaning, use a warm pre-soak—just fill your washing machine with warm water and let your clothes soak in it a bit before they’re properly washed.
17. C
LEAN
O
UT
Y
OUR
D
RYER
L
INT
Does your dryer seem to not work as well as it once did? Do you sometimes have to run a dryer load a second time because the clothes are still damp? That’s not only time consuming, but it’s also expensive, and the cause is usually dryer lint. It’s easy to take care of the problem—just make sure your dryer’s lint trap is clean (use a vacuum cleaner to clean out the lint trap slot) and also make sure that there’s no lint caught where the dryer’s exhaust leaves your home. You can also pull your dryer out from the wall, disconnect the exhaust pipe, and make sure that it isn’t clogged anywhere (and also vacuum inside the dryer through the exhaust hole).
18. M
AKE
Y
OUR
O
WN
P
OWDERED
L
AUNDRY
D
ETERGENT
Laundry detergent costs as much as twenty cents per load, but you can easily make your own powdered detergent at home for as little as two cents a load. Just take a bar of unscented soap and grate it into flakes using a box grater, then mix those soap flakes with one cup of washing soda and a half cup of borax. You can also add one half cup of an oxygen cleaner like OxyClean, but it works fine without it. You can make multiples of this mix and store it in a large tub. All you need for a load of laundry is two tablespoons (or 1¨M8 cup) of this mix. Leave a small measuring cup right in your storage tub.
19. A
IR
-D
RY
Y
OUR
C
LOTHES
I
NSTEAD OF
U
SING THE
D
RYER
An old-fashioned clothesline is one of the best cost-cutting items available to you. At current energy costs, the average dryer eats up forty cents worth of energy each time you run a load. Hanging your clothes on a clothesline reduces that cost to zero. Over many loads, that adds up to a real savings. Don’t have an outside clothesline? Hang one across a spare room in your home, or spread the clothes out to dry. The clothes smell better and you save for every five dryer loads you hang up.
20. D
ON
’T U
SE THE
S
TOVE
W
HEN THE
M
ICROWAVE
W
ILL
D
O
For many simple purposes, the microwave oven is much more energy efficient than the stove, often using 75 percent less energy for the same task and adding far less heat to your house. Use your microwave for tasks such as boiling water, steaming and browning vegetables, cooking rice, and other water-intensive applications. It can reduce your cooking costs by up to 20 percent.
21. T
URN ON THE
O
VEN
L
IGHT
W
HILE
C
OOKING
Whenever you open the door on your oven, as much as 25 percent of the heat inside is lost and a significant amount of energy is used building that heat again, likely extending your cooking time. Instead of losing heat that way, turn on the oven light while cooking and use a meat thermometer in your food. This way, you can look through the glass on your oven and visually inspect the food inside without opening the door and losing significant heat.
22. O
NLY
W
ASH
F
ULL
L
OADS OF
D
ISHES OR
C
LOTHES
Instead of just washing clothes or washing dishes when it’s most convenient, wait until the loads are truly full before running a cycle. Appliances are designed to handle full loads, so running partial loads is a sure way to let money float out of your pocket. According to the Rocky Mountain Institute, an average washing machine costs $155 per year to use. Reducing the number of loads you wash can add up to real money over time. Want something clean right away? Wash that item individually by hand.