How I Save Money - Suggestions for earning and keeping more of your cash.

[peelout]

 

Creating wealth is not only about how much you earn, but how much you keep.  Most of us can't suddenly increase our earnings, but there are many ways to increase what we keep.  The purpose of this thread is to be a general catch-all for ways specific examples of how we keep more of what we earn. 

 

I'm hoping to learn specific things people have done, as opposed to generalities like saving change, not paying interest, etc.

 

 

[Elastigirl]

I have found the envelope system to be super easy. We have am envelope for groceries/clothes/ entertainment. If I have money in the envelope, I can buy stuff. I even use it for online and debit. If I buy something online with my debit, I still take cash out of the appropriate envelope and put it in a envelope marked deposit. The visual reminder of envelopes helps me stay on track budget wise.

 

Also big thing was just making a budget. I actually feel less guilty when I spend stuff now that I have a budget.  I know what I have the money to buy.  We found that just the act of budgeting helped us to have money at the end of the month instead of wondering where it all went.

[peelout]

I'll start -

1) Pick 5 heavy hitters and focus - I don't have time to watch grocery coupons, but long ago I found 5 items that are on a super sale maybe 1 time per year.  I watch the store ads during the period I know they go on super sale at and buy in huge bulk when the sale hits (typically a 1 yr supply).  For instance, charcoal is on sale lots of times.  But about once in early spring, its about half off at one store.  I buy about 20 large bags which lasts me pretty close to a year.  Other heavy hitters for me are:

A1 sauce (I cook out a lot and love the stuff)

Water filters

Jeans (1 store in my area has a huge sale 1 time/yr)

Car oil and filters (I change  my own + wifes + kids)

 

2)  Credit card bonanza - I've stayed at Holiday Inn's for free.  Chase has been offering 60000-80000 pts for signing up for the card for many years.  Holiday Inn rooms average 10k-20k pts.  No cost to sign up.  I use the credit for the minimum purchase (in less than a month) and get my pts.  Then immediately cancel.  Of course this is only good for those w/ rock solid credit and no intention of ever paying interest.  My credit score never takes  much of a hit.

 

I also play the game at Farm and Fleet whenever I buy new tires (4 cars in my family including my kids).  Sign up, get 10% off purchase, cancel card.  I did find out they would only give me a new card about once a year.

 

Grocery store w/ gas station - Using my Kroger credit card only for food purchases at Krogers knocks off about 85c a gal for about 2 fillups a month.  We take 2 cars, line them up, fill one, pull fwd, fill the next cause you can only use discount on 1 purchase/month and then the pts reset to 0.

 

3) Never buy warranties (unless) - Warranty's are big money for stores and mostly a wasted expense for consumers.  I've saved enough by not purchasing warranty's to pay for almost any of my purchases.  That being said, I do purchase them for washing machines which are both expensive and prone to breaking.

 

4) Earning tax free interest - Of course I have never done this and do not know anyone who ever has, but a friend of a friend said they put money in their kids names when they were young so that the money could accrue interest up to the childs max yearly interest free exclusion.  As the kids got closer to college age (or the ability to access money), the money would then start coming out in the form of things the kids needed to purchase (like new home computers, furniture, etc).

 

5) Buy college books through Chegg - My daughter is paying less for her used college books than I did (I'm 54).  Most college students probably already know about this one, but I'm stilled thrilled w/ it.

 

6) Plan long term for Black Friday sales, especially tools.  How many purchases do you make that could have been put off till Black Friday?  Duct tape it to keep it working, borrow it if you can't, but plan for Black Friday.

[Waldo]

I'm not the kind of person who can save a penny, money burns a hole in my pocket, but that's ok if I approach things right.

Off the top forget about it savings works for me. By the time my paycheck hits my account, its pure disposable income. Retirement savings is taken out of my check, and I have a couple separate accts that all bills/mortgage are paid through which draw off the top of my check right when it hits the bank (one for fixed and unchanging, one for monthly variable), included in one of those accts is a general savings for Christmas.

The other type of "savings" I'm real good at is sweat equity. Contrary to what you see on HGTV, usually home remodeling costs more than the value it adds; however when you do all the work, that isn't true and you can add value through effort. Disposable income spent on the materials needed for sweat equity can be viewed as savings. I always have a project of some sort going on around the house.

 

4) Earning tax free interest - Of course I have never done this and do not know anyone who ever has, but a friend of a friend said they put money in their kids names when they were young so that the money could accrue interest up to the childs max yearly interest free exclusion.  As the kids got closer to college age (or the ability to access money), the money would then start coming out in the form of things the kids needed to purchase (like new home computers, furniture, etc).

You mean a 529 account? We set one up for our kiddo right after he was born. When real young, some relatives prefer to add to it instead of buying toys for birthdays/holidays/etc... I add to it automatically monthly; not a lot, but by the time college comes around he'll have a pretty fat account. The stock market has been real good to him....

[peelout]

You mean a 529 account? We set one up for our kiddo right after he was born. When real young, some relatives prefer to add to it instead of buying toys for birthdays/holidays/etc... I add to it automatically monthly; not a lot, but by the time college comes around he'll have a pretty fat account. The stock market has been real good to him....

No, not a 529 account, although thats a good suggestion.  If "this person" invests short term money in say a 6 month CD (not much point anymore), the CD can be put in the childs name first, then the parents.  Therefore, any interest accrued can be considered the childs.  So if the CD earned $500, no taxes would have to be paid on the interest because the child does not have to file if they meet federal guidelines.

 

I'm not sure of the exact amount but I copied the following off the web.  

 

A child who is a dependent must generally file a tax return if he had unearned income over $950 during the year. If he earned the income, such as salary, wages, tips, commissions and bonuses, he will have to file a return if it totaled over $5,700. Children who are dependents must also file a return if gross income was greater than $950 or earned income was up to $5,700. If the child is also blind, higher limits apply. In essence, the first $950 of income is tax-free to a child while a tax bracket of 10 percent applies to the next $950 of income.

Read more : http://www.ehow.com/info_7797582_much-kids-earn-paying-taxes.html

[Jett]

Budgeting. When my spouse and I got married, we were both unemployed and had just moved back to the city I was born in. We had a bit of savings, but it took several months to find jobs. In that time, we learned how to live on a shoestring budget. It's a certain source of pride to me that we never had to go on financial assistance, although I did have to defer my loan payments for a few months, and there was one week where we literally had to beg excess pantry items from our friends. Fortunately, right after that I got a job, so it's been all uphill from there.

 

Now that I have a better job, it's weird to actually have income left over after paying the monthly expenses. My spouse has a tendency to spend extra cash on stuff like video games, and we both will go out to eat more than we should if nothing stops us. To combat those tendencies, I've added a category to our budget called "allowance". We each get $50 per month to spend on stuff, which can roll over into the next month for a bigger purchase. This isn't a completely unbending rule; if we want to get something a little more expensive, but we need it sooner than 3 months from now, we can decide to spend a little extra from our savings if we both agree on it. But, the allowance helps us keep track of how much we're spending on stuff, which keeps us mindful and helps us decide whether we really need the item or not.

 

We have one month's worth of expenses in savings that doesn't get touched except in emergencies. Extra money after expenses and allowance periodically gets put toward our loan payments. Looking forward to paying those off and being debt free in a year or two. :3

[peelout]

Service expenses:  I've asked people what the price is for cash after getting their estimate for doing a service (like new transmission, parts at a salvage yard (just say "this will be cash, no reciept needed), auto service at smaller repair shops, tree removal).  You'd be surprised at how often the price drops. Businesses have to pay credit cards (especially rewards cards like Discover) about 3% just for accepting your credit card.  They are often happy to knock that off the cost of the card if you pay in cash.  Plus a lot of them probably don't even report the income so they will cut the cost even more significantly more.  Don't be afraid to ask if they offer a discount for cash and say upfront you don't need a receipt.

 

Also, don't be afraid to ask a store if a price is their lowest, especially on a large ticket item, and even more especially if it is clearance.  I bought my wife a grandfather clock years ago for $800 that a very large retailer had already marked down from $1200 to $1000.  Saved $200 just for asking.

 

I also budgeted for about 5yrs.  After that it got redundant cause I had such a good handle on where money was going.  But it was well worth the time and was a real eye opener.  I did what JMitch did which is basically the envelope method.  There were about 25 categories and I new what I had to save monthly for even expenses that were yearly.  There was a category for misc for my wife and I.

[oldnews]

Keep track of what you buy with something like Mint.com, and being brutally honest. Separate alcohol, snacks, etc. from your "grocery" purchases, and see what you're really spending your money on. Set budgets and try to stick to them.

 

Make your credit or debit card pay for some of your fun. I used to have a PNC Points debit card and got an Amazon card every few months, but now I have all my bills on an Amazon Points credit card and get about $17 every month to spend online. (I buy a lot of books. Books and non-grocery food are my weaknesses. See above.) Don't put any more than your monthly bills on it, and pay it off every month or every paycheck, so you're never paying interest.