In another article I present a list of ideas to save money immediately. And there is some satisfaction in seeing some quick savings. But to really save money, you need to make some changes that have longer term payoffs. These are lifestyle changes. Your best way to find savings is to think outside the box. Think unconventional, and look for ways to do things differently. Then dig deep into the Internet to to find the cheapest way to get what you need. Case in point: How much does a cell phone cost? $60.00, maybe $80.00 per month? Not in this house. Try $20.00 per month. At one point I was paying only $30.00 a year. Read that again that's not a typo. Then keep reading to find out how.
Your House
If you are like most families, your rent or mortgage payments are your biggest monthly expense. So it makes sense that any savings here will have the biggest impact.
- You should buy a house as soon as it makes sense to do so. The advantages are many: Level monthly payments instead of ever increasing rents. Equity appreciation. Tax savings.
- Don't over buy. Avoid the temptation to buy the biggest possible house you can afford. You are not impressing anyone.
- There is this thing called a "Starter House". The first house you buy should be one.
- Consider buying a duplex or other multi-family house. The rents you collect from your tenants will help pay your mortgage.
- A mobile home is not usually a good investment. However, if you own a piece of property, a mobile home can be an inexpensive way to get into a house. I once knew a fellow who put a mobile home on a piece of property. Then, over time, he built a house next to it. By the time he retired, he had a nice house on his own land. All paid for.
- Don't forget to consider fixers, auction houses, foreclosures and other nontraditional sources.
- In another article on this site I (will) talk about the advantages of owner occupying a duplex. It is a great idea. It is less expensive than living in a traditional house, and the monthly rent income from your tenants provides a nice side income.
Your Car
After housing, car payments are the next biggest budget item for most people. It's also the one place where most people get it wrong. Most people just seem to assume that monthly car payments are a fact of life. They are not.
- Never, ever lease a car. It may seem like a good idea at the time. After all, monthly lease payments are usually lower than a loan payment. But over time, it doesn't work out. Why? Well, first there is the upfront lease payment that can run several thousand dollars. Then, you never actually own the car. At the end of the lease you have to give the car back. You made all those payments and now you have nothing to show for it. At that time you can get hit with extra charges for excess mileage, excess wear, etc. When you buy a car with a conventional auto loan, you own the car after the loan is paid off. You have a tangible asset that is worth something. You can sell it, or keep driving it and enjoy being free of monthly car payments.
- You are fooling yourself if you think you need to lease a car to get the lowest car payments. First off; if you are considering a lease, you are looking at brand new cars. Well stop that. You can get lower payments buy taking out a loan on a good three year old used car.
- Don't buy a new car. A new car will loose about half its value in the first three years. Most cars are reliable enough to still be is good working condition after 3 years. So save up and buy a good 3 year old car for as much cash as you can manage. It's your best car deal.
- Don't take out a car loan of more than 3 years. Any longer than that and the interest starts adding up. If the payments on a 3 year loan are too steep, consider a less expensive car or a bigger down payment, or an older car.
- Better yet, don't have a car loan at all. Save up and pay cash. Yes. This can be done. Car loans are not a fact of life.
- If you have two cars, have only one car payment. If you must. That means pay off one car and keep driving it for a while longer. Put the payments you would have been making into the bank. In a couple of years you will have saved up enough to pay cash for your next car.
- Buy a reliable car, take care of it, and drive it until the wheels fall off. This is what I do. I kept my first car for 11 years. The next for 15, and the one after that for for 16. Yes, I only have owned 4 cars in my life. My average ownership cost is running less than $1,000 per year.
Telecommunications
It used to be that a land-line phone was the sole communication expense for every family. Today it's more complicated with cell phones, cable TV, broadband Internet, and maybe even a land-line. If you are not careful, you can end up paying through the nose.
- Ditch your land-line. Since most cell phones now come with unlimited talk and text, you really have no need for a land-line.
- If you must have a land-line for the voice quality or features, you should be using a VoIP service. Elsewhere on this site I have a rundown of some of the better plans.
- Consider package deals that include TV, phone and Internet. But watch out. A great deal can end up being a stinker if you need to accept a service you don't need (IE: a landline).
- When purchasing a cell phone. The cost of the phone is only of secondary concern. Your primary concern is the monthly cost of the phone plan. Most cell phone plans offer unlimited talk and text. So the main thing to look at is the amount of data you get.
- Avoid the major cell phone carriers. Better deals can be had with Cricket, TracPhone, Straight Talk, Page Plus Cellular, Republic Wireless and other prepaid companies.
- For the ultimate cheap cell phone; carry an unactivated smart phone. Any cell phone can call 911. Even a unactivated one. It can also do its Internet functions over wi-fi. Use wi-fi (at work, at home) for most of its Internet functions and install Skype or some other VoIP app to make Internet phone calls.
- Do you really need to spend over $600.00 for an iPhone?? Less expensive options are available in Android phones.
- If your Internet needs are modest, consider using the Hotspot function of your cell phone.
- Try ditching Cable TV and putting up an antenna and use your Internet connection to stream Netflix or Hulu, etc. Elsewhere on this site I have a list of streaming video services.
- If you must have cable TV, ditch all the extras and stick with basic cable.
- If you have Comcast Internet service, buy your own modem and quit paying the monthly modem rental fee.
Your Computer
A computer is an essential item in every home. It also has become an expense in every home budget. Here are some ideas to reduce the impact a computer makes on your budget.
- Don't pay a monthly fee for anti-virus protection. There are free programs that will protect you just as well without the cost.
- Don't pay for software. We are living in a golden age of free software, there are free versions of every major software category. Microsoft Office, try Libre Office. If you only need a word processor try Abi Word. try The Gimp instead of Photoshop. Audacity for audio editing. It is possible to do everything you need to do using free software.
- If all your applications are free, why not your Operating system? Linux is a free OS that will run all of the name brand freeware. Linux also runs well on older hardware allowing you to put off the purchase of a new system and keep your system longer.
- Speaking of older systems. Look around, chances are that there is a used computer shop in your area. Refurbished equipment is just as reliable as new and costs much less. I have bought 3 year old computers for $100.00 then kept them going for 10 years.