America’s Top Financial Bloggers: “Budget 101″ – Ten changes you can make that will save you money

by Efin Advisor | July 20, 2009

by Cheryl Smith

Cheryl Smith is a columnist and blogger for The Examiner, covering her local area of Ft. Lauderdale.  She writes helpful first-person observations and advice concerning financial matters among other topics.  For more articles by Cheryl, visit her personal website on The Examiner.

As the recession drags on and unemployment continues to skyrocket above 10%, we must look for ways to stretch our budgets. The Sun Sentinel/CNN.com ran a series of Tips of the Day ideas which listed twenty ways to fix “leaks in our household budgets” by changing the way we spend money for of variety of services. I have picked out a few of them for you to try. I’ve noted where we’ve tried these suggestions and how it worked out for us.

1. Cable, Phone and Internet: Subscribing for cable TV, Internet access, and phone service from three different providers can end up costing you money. Consider a package deal from your local cable or phone company. You can get digital phone service, which is provided by a broadband Internet connection, high-speed Internet, and digital channels for much less than you’d pay separately. Some may want to consider eliminating their land line all together or cutting back to basic service without all the bells and whistles.

By cutting back to basic land line service we saved $20 a month on our phone bill

2. Paying Bills by Snail Mail- It costs 44 cents to mail a letter the old fashioned way. You can save time and money by signing up for on line bill pay with your banks. This is typically a free service and allows you to schedule payments in advance. You can also use the individual merchant websites to pay your bills. Many credit payment the same day they are made. You must be sure to check the terms of each account as some may take a day or two to be credited and you do not want to incur late payment penalties.

We pay all our bills on line. This is a quick and efficient way to do business. We have a record of payments and don’t have to be bothered with writing checks. While it may not seem like a huge cost saving, when you consider how many bills you send out, it adds up.

3. Eating out on Vacation- Consider getting a room with a kitchen or kitchenette. Even if you have to pay a bit more for the accommodations, you’ll easily save money by not taking your family out for breakfast, lunch, and dinner.

On a family trip to Disney World, we had a suite with a kitchen. When traveling with children, eating out can be costly. This allowed us to have breakfast and dinner in the room as well as bring snacks and drinks for the day. Aside from saving money, it makes it easier to provide healthier meals. Plus you don’t have to deal with crowded restaurants. I highly recommend it.

4. Flexible Spending Accounts- Many employers offer spending accounts that let you sock away up to $5,000 per household tax-free for medical expenses, which you can use for health-insurance co payments, prescription drugs, eyeglasses, contact lenses, and even nonprescription drugs, such as aspirin. Estimate your needs carefully when open enrollment comes along. The IRS now offers a grace period of an extra 2 1/2 months to spend the money, so you don’t have to rush to spend it all by the end of the calendar year.

We’ve been doing this for years and it wonderful. Besides saving you money on taxes, you have a record of all your medical expenses. The money is taken out of each paycheck throughout the year so large medical expenses do not have to be paid for in a lump sum. It is a shame that more people don’t take advantage of this program.

5. Water Usage- There are many ways to cut back on water usage. Turn off the tap while you’re brushing your teeth or shaving — every minute the water flows wastes up to 2 1/2 gallons, according to the Environmental Protection Agency. Run full loads in washing machines and dishwashers. Water plants in the early morning to ensure that the water goes into the ground instead of evaporating. And use a bucket to wash the car, hosing it off for a quick rinse, to save 90 gallons of water per wash.

Just thinking about saving water will cause you to make subtle changes such as turning off the sink instead of letting it run.We’ve set the timer on the sprinkler system to come on at 5: AM, and do laundry once a week to insure full loads.

6. Online Shipping Fees – The convenience of ordering on line is nice but we are sometimes put off by the shipping charges. There are several things you can try. Pool purchases with friends to qualify for free or flat-rate shipping offers. For example, several sites, such as Amazon, Barnes and Noble, and Tower, offer free standard shipping on most orders of $25. Use a shopping search engine, like shopzilla.com or shop.com. Enter your ZIP code and compare retailers’ prices, including shipping and handling. You can even specify “Free Shipping” as an option in your search (on Shopzilla, search for “Special Offers” and then “Free Shipping Offers”).

7. ATM Fees- On average, consumers withdraw $60 from an ATM four times per month, estimates David Gosnell, an editor at ATM & Debit News. That’s about $240 a month in unaccountable spending. Try withdrawing the exact amount of cash you’ll need each week from your bank to avoid other institutions’ ATM transaction fees.

You can also get cash back at many grocery and drug store chains for no charge. This is our usual way of getting cash without incurring fees.

8. Too much insurance- Does your home owner’s insurance include the value of the land? The land isn’t going anywhere so you don’t need to insure it — just the structure and your belongings. If you have an older car, the annual premiums and deductible might make collision and comprehensive insurance cost more than the car is worth. On any insurance policy, auto or home, think about a higher deductible. Because filing numerous small claims can raise your insurance rates, you may be better off covering minor losses yourself and getting a lower rate with a high-deductible policy. You may also have unneeded special riders on high-value items you no longer own. If you think you might be over insured and want an opinion from someone besides your agent, go to the Insurance Information Institute site, at iii.org.

As circumstances in your life change, you need to make sure your insurance coverage changes when necessary. We canceled the collision on an older vehicle, increased deductibles on all policies and were able to save hundreds of dollars on premiums.

9. Home Renovations to improve value of home- Renovating your kitchen at a national average cost of about $43,860 doesn’t always mean you’ll make it back when you sell your house. On average, you’ll recover 85 percent of the cost of a new roof 90 percent of the cost of new windows ($8,680 of $9,680). A bathroom renovation is the project least likely to lose money (a return of $10,730 on the average cost of $10,500, or 102 percent). A wiser option is hiring a professional who can give your home an inexpensive makeover. “A home stager adds furnishings, decorative touches, and details,” explains Alan Montgomery, a real estate agent in Seattle, “down to setting your dining-room table.”

Montgomery had a client whose home sat on the market for six months at an asking price of $334,000. After spending $5,000 on staging, the owner sold the place in three months for $379,000. Ask your real estate agent or broker if she knows anyone in the home-staging business, or go to interiorredesigndirectory.com, a directory for interior decorators, many of whom also stage homes.

10. Using SunPass-Sign up for the SunPass (or your local equivalent such as EZ-Pass) which is now good on a number of toll roads. You’ll save time and fuel by not idling in toll lanes, and some toll roads offer regular commuters discounts of as much as 50 percent. The International Bridge, Tunnel, and Turnpike Association lists websites for local toll authorities and their discount details.

We always looking for ways to save money. If you come across something that works for you, please share it with us.

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