We are 2 months into 2020 and by now you may have given up on some of your New Years Resolutions. However, this year is going to be different! This next year has to be different! We can't continue on the same trajectory we are on! Do you need to take that final step to debt freedom? Or make the final savings jump to get into retirement? I feel extremely motivated and confident that this year is going to be an epic year to make a giant leap in financial freedom. I'm hoping that you and I can benefit from these tips to save some money in 2020!
- Set a goal – No matter what day you are reading this, whether it be in March or in September, now is the time to set a resolution and make some changes! A goal for what you want to accomplish over the coming months! Write down 3-5 goals that are measurable and that push you. They don't need to all be financial. It can be spiritual, physical, or mental. If you feel defeated oftentimes in not even being able to make it 3 months with your resolutions, then set monthly goals as I wrote about earlier this year.
- Automate your fixed expenses – last year we published a great course called Two Checking Account System. This system walks you through diverting your fixed expenses into one account and having another variable checking account. This makes it extremely easy to see if you aren't getting ahead from paycheck to paycheck. It is super easy to start and is only seven steps to get started.
- Pay cash for all your purchases – paying cash for your purchases has been proven to help you spend 30-40% less on your purchases. Having cash leave your hand feels a lot more painful, then swiping a card. Feel your purchases this next year and withdraw a set amount of money each week to pay for your variable expenses. Bank the extra that you save in a jar to pay for a vacation or save up for an emergency or Christmas. I've been using this technique for three years now, and I've noticed a significant decrease in my expenses. Give it a try. It doesn't take a lot of work and has the potential to save you a lot of money.
- Call all your services providers and threaten to disconnect your services – for the last five years I regularly call my service providers and ask for a discount. If they aren't willing to work with you, then ask to be transferred to the service termination department (often called, “loyalty” or “retention”). You'll get a service rep and they will always have a number of packages that they are willing to offer you. Anywhere from $5 to $100 discounts, and extra services. Some examples are DirecTV, Comcast, CenturyLink, Garbage Hauling, Credit Card interest rates, and even regular lawn care services. Aaron also wrote about how your customer loyalty is actually one of your biggest assets and gives you more leverage than you know.
- Downsize to being a one-car family – consider the costs that two cars are costing you and your family. Gas, insurances, interest, depreciation, and repairs quickly add up over the life of owning a car. A lot of us don't want to reduce down to one car, because it inconveniences us. Have you thought about riding a bike to work or to get groceries like Mr. Money Mustache does? Write out how much the extra car is costing you, and ways you can save in being more efficient with your money.
- Make working out a priority – whether it be a walk around the neighborhood with a good friend or doing 30 minutes of intervals at the local gym, this money-saving tip will help you save money in not having to buy bigger clothes and it'll help reduce your medical expenses. Often times I think we let working out be a “maybe” in our lives, but really needs to be an “essential” part of our lives. Too often during our careers, we sacrifice our bodies over the 40 years of our working years to climb the corporate ladder. Make working out and improved health a priority to save you money in the coming year! You won't regret it and your body will love it!
- Be willing to pay more for healthier food – this tip and working out go hand-in-hand. Both working out and eating healthier food will reap long-term financial and health benefits. In my own life, a few tips that I try and incorporate is to continue to reduce the amount of gluten I'm taking in (ya I'm on the bandwagon), reduce my carb intake, limit the number of refined sugars, eat every three hours smaller meals, get a number of vegetables and fruits into my daily diet, and drinking at least 96 ounces of water each day. A lot of these tips don't actually cost money but are ways that I modify what is being processed through my body. Again, I know doing this is harder than just will-powering yourself to “just getting it done.” Consider allowing someone to hold you accountable this next year, and be able to speak into your life.
- Utilize your health savings account (HSA) and flexible spending accounts (FSA) – in January my normal monthly healthcare costs were about $275 every two weeks. My high deductible PPO was about $191 with the HSA option. I signed up for the high deductible PPO plan and banked the difference or $275 – $191 = $84/pay period. In doing so I've paid no out of pocket money (after-tax) this past year for my family of five, but have been able to grow my HSA savings! This is a great option to save money if you are healthier and have a limited amount of healthcare costs. It'll pay big dividends as your HSA grows over time!
- Switch jobs to have a smaller commute (or telecommute) – many of us work a standard 8-hour shift but have a 30 minutes commute to and from work (some people even longer). If you make $40 per hour but have a one hour commute (total), then you are really making $35.56 per hour ($40 X 8 hours = $320/day / 9 hours = $35.56/hour). This is just the cost of your time. Also, think about the wear and tear on your car, mileage, depreciation, and the stress of dealing with traffic. Is your commute worth it?
- Switch your cell service – consider getting away from one of the major cell phone carriers (AT&T, Verizon, and Sprint), and going with Republic Wireless or Ting Mobile. We've reviewed both services and utilize them still today to help save us money month over month. In fact, I've been on Republic wireless for almost 3 years, and Matt has been using Ting for three years. Check out our reviews and consider switching to help save some money next year!
- Use Our Local Library – $200/year – Weekly my family uses our local library for checking out kid's books, DIY books, novels, personal finance books, or movies. By using our library versus paying for the books and movies outright it saves us tons of money! I'd estimate that the library can easily save us $200/year, and especially with how much we go through children's books.
- Save money by buying goods online – 15-25% per purchase – When we had our third child (14 months apart from our second) we quickly realized we needed to either buy a diaper company or find diapers at a discount online (we chose the latter). Through using Amazon's subscribe and save, and diapers.com we were frequently able to save 15-25%. Besides diapers, we regularly purchase large consumer staples online like chia seeds (excellent for runners!), toilet paper, 7th Generation cleaning products, and computer supplies. For some other online shopping discount tips, then check out Aaron's article – Items That are Cheaper Online.
- Save Money on Electric Bills – $15/month – Month to month we track our monthly electric bill, and over the last three years have seen a significant drop. The main reasons are we switched to compact fluorescent light bulbs, using energy-efficient space heaters in select areas, not putting all the bulbs in light fixtures, and closing shades during hot days & opening them during cold winter days. All these small steps have helped us save money on our electric bills to the tune of about $15/month compared to 5 years ago.
- Reduced Our Fixed Expenses – $100/year – After we switched to two checking accounts (one for fixed expenses and one for everything else) we were able to see exactly how much we were committed to each month. By segregating our fixed versus variable expenses we were able to tackle our fixed expenses head-on and find ways to reduce each of these. With one checking account everything got “merged” together and didn't provide us clarity on how to reduce our fixed expenses.