Every trip to the grocery store reveals a frightening upward trend in prices for all consumers. As transportation costs remain at record levels and unemployment stagnates in record territory, household budgets are strained. Hoping the situation will change in the near future is not the best approach to optimizing every dollar. Instead, consider the following tips to maintain the standard of living while reducing monthly expenditures in some major categories.
- Revisit the budget – Every household should have a budget to restrain expenses throughout the year. Families that do not live by a budget are not cognizant of the actual number of dollars that are being consumed by various bills each month. A study of the past 12 to 18 months actual expenses will provide a concrete explanation of why there does not seem to be enough money each month.
- Plan ahead – Gasoline, food and household necessities can be less costly with some serious planning. Errand outings that are planned will use less gas since the route will be pre-determined and all of the sales and specials will be known ahead of departure. Last minute purchases can consume up to 30 percent of the discretionary income each month.
- Break old habits – Money-saving habits run contrary to reflexes that cause the shopper to visit the same stores on the same days of each week. Adopt a habit of shopping according to the sale fliers that are in the paper to create a menu for the week. Stop by the stores to pick up a flier if one is not sent. Items in the fliers are meant to draw shoppers to the store, but the intention is to have every visitor buy non-sale items because they have not planned ahead.
- Never pay full price – The latest gadgets are priced to pay for the research and development costs of creating and marketing the most innovative products on the market. A savvy shopper will wait six months and pay a low price on the previous model when a new one is released. Patient consumers allow others to pay full price in the stores around town and online while they wait for incredible deals.
- Collect coupons – Have a bright-colored envelope that holds all the coupons that might be used in the coming weeks. Always have the envelope handy when running errands and shopping online. Know what is in that envelope to optimize the savings at every stop. Never buy an item simply because there is a coupon, which causes budget creep. Search the internet for coupon codes that can save money on online purchases at favorite retailers and websites.
- Adjust the thermostat – On warmer winter days and cooler summer days, adjust the thermostat to save energy. Lower the temperature on bright, sunny winter days and open the drapes to allow the solar energy to enter the home. Energy savings will add up quickly when effort is made to wear a sweater and slippers throughout the cold months. A similar practice can lower summer cooling bills.
- Find new stores – Major retailers have some good specials, but there are great deals to be had at smaller businesses throughout most towns and cities. Set aside an afternoon to explore a certain area to find unique stores that might become a frequent haunt that will save money on necessities. One new approach to grocery shopping is called a salvage store that offers tremendous savings on all types of food products and other sundry items.
- Avoid last-minute purchases – When a gift is needed for a special occasion, spend an extra hour shopping for a great deal. If at all possible, shop for gifts weeks or even months ahead of the event to find the best price. Most last-minute purchases are disappointing in creativity and value. Choose an item in January that can be given to all give recipients throughout the year. Then always have that item on hand after buying it on sale.
- Conduct insurance review – Life can be very busy, and details tend to slip through the cracks; especially when it comes to insurance. Car and house insurance policies should be reviewed to adjust coverage and ask for every possible discount. Switching insurance companies is not always the best approach to saving money on annual premiums.
- Become penny-wise and not pound-foolish – Whenever fuel prices jump for the current season, there are homeowners and drivers who will spend thousands of dollars to avoid paying the higher prices. Prior to making a major home improvement or buying a new car, calculate the price and all associated costs that will be incurred with the project. Calculate how many months or years required to realize savings.
Saving money requires planning and creativity. Most consumers learn to manage money when the household income is reduced by a substantial sum. Even in prosperous times, everyone could use money more effectively with some research and conscious effort. Good spending habits are the best way to teach the next generation to live a frugal lifestyle and use money wisely.
Andy co-founded the SavingUp.com.au savings comparison website where Australian consumers can compare a range of savings accounts. He has also helped curate a collection of money-saving guides to help consumers save money in everyday life.