1. Get rewards and cash back from your purchases — Although I hate debt, I am a big fan of credit cards that pay rewards.
As long as you buy only what you can afford, and pay off your balance in full every month, rewards cards can really stretch your budget.
For maximum effectiveness, I suggest choosing just one single card and using it for all your purchases. For example I have a Visa card for our personal purchases with Wells Fargo Bank. I like their plan because I can use the points for products, gift cards, travel or elect to get cash back at the end of the year. We do the same thing with an American Express Card for our business –we can’t get cash back, but the points can be used for any airline or hotel chain, dozens of resorts, products from large chain stores and we get a free companion ticket to anywhere in the world once a year. Last year we managed a ten-day vacation that only cost us about $400 as all of our airline and hotel charges were covered by points. And we had enough left over to buy about a dozen gift cards that became Christmas presents.
The card companies have become stingy, especially because of recent legislation changes. But look around — There are still a few no-annual-fee cards that offer good rewards.
The key here is to pay everything off in full each month. As an added bonus, when you pay for everything with a credit card, you also get a monthly inventory of all your spending. This can be a great help if you are budgeting (and you should be), and if you have a business it really simplifies your bookkeeping.
2. Have a late season garage or yard sale – Most yard sales happen in the summer and for that reason they are very competitive. But September and October can also be great months for sales. If you didn’t have on this summer, take a look around your house and plan one now.
It all depends on where you live and how much stuff you have, but I rarely earn less than $500 when I do a garage sale. One of the facts of life of getting older is that you just don’t need as much stuff. So I am pretty brutal about going through the house and getting rid of stuff. And my wife is even tougher than me. After I did my run through, she cam along behind me with even more stuff than I had found. The result – We generated just over $700 from our last sale and found three fairly expensive items we sold on eBay for another $322. So that was over $1000 than went right into an extra mortgage payment on our house (only 33 payments to go –less if we accelerate them).
3. Sell stuff on eBay — Garage sales are one way to make money, but we also sell on eBay. We have our regular eBay business where we sell new products, but we also like to visit garage sales, thrift shops and small country auctions where we find things to sell. We don’t do this very often, but it adds up. I looked back through last year’s sales and we earned an additional $7300 just doing that occasionally.
If you want to learn how to sell on eBay, here is a book I wrote that is very basic and will get you started:
4. Use Ebates for up to 25% cash back: Ebates is a free online coupon site that offers up to 25% cash back from top online stores like Target, eBay, Barnes & Noble, and the Gap. Registering on Ebates is free and takes just seconds. You can get more details at the Ebates website.
5. Combine your cable, Internet and telephone service. Cable and Satellite companies now offer combined services that not only cost less, but also offer the convenience of a single bill. These combined service deals can save you a bundle.
6. Try Skype to reduce your phone costs — I was pretty slow to adopt Skype, but now I am hooked on it and even got my 87 year old mother using it. Just last week she had a video conference with her great-granddaughter. Mom is in Virginia and can’t travel and our kids are in San Diego, so this was a real treat for both of them. And we have some friends who live overseas and can talk to them for 3Ë a minute.
7. Use Your Senior Discounts – I am always amazed when I go to buy something and see a senior discount. Last week I even learned that my city gives a discount on my trash and recycle hauling because I am a senior. OK – Its only $2.00 a month less but hey –I’ll take it. Be sure and ask everyone. Even some cell phone companies now give senior discounts.
8. Improve your credit score. A good credit score can save you thousands of dollar in interest on everything from a home loan to a car loan, and from school loans to credit cards. If you’ve never focused on your credit score before, the place to start is to get your free FICO score. Once you know where you stand, you can begin to improve your score and lower your interest payments.
9. Convert to a gas water heater. If you have an electric water heater convert to gas. They are more efficient and will save you money in the long run. And you may want to look into the instant-on tankless water heaters that only heat water when you need it. The most popular brand is Rinnai –which is heavily advertised, but there are several other cheaper brands. Here is a link to a Tankless Heater Guide.
10. Look into refinancing – Home interests rates are at 20-year lows; just over 4% for a 30-year loan and as low as 3.5% for a 15-year loan. The breakeven point is 1.1%. If the new rate is at least 1.1% lower than your current rate, you will save money by refinancing.
11. Request a reduction in the interest rate on your credit cards — As with home equity loans, credit card companies sometimes are willing to reduce the interest rate. It can’t hurt to ask. If your credit card company won’t help you, switch to a low interest credit card or a one of several 0% APR credit cards.
12. Get rid of Private Mortgage Insurance. If your down payment was less than 20%, you are probably paying PMI. Once you have a 20% cushion through reducing your debt and home appreciation (yes, prices do go up from time to time), contact your mortgage company to start the process of removing the PMI.
13. Read magazines at the library or online — Magazines today cost a fortune. And how many times have you bought a magazine based on the cover and been disappointed by the lack of substance. At the library you can read magazines for free. And many magazines now offer their content for free online. And while you are at the library check out their DVDs. My local library doesn’t have as many DVDs as NetFlix, but they have a lot including lots of instructional (how-to) DVDs and all the classic movies.
14. Drive your car longer. Cars made in the last ten years are far more reliable than they used to be. We drove our last car 236,000 miles before selling it. The new versus used debate often overlooks the most important factor–how long you own your car. Drive it as long as you safely can for substantial savings. And when you buy a car, you can save a ton of money by purchasing a low-mileage one-year-old car, rather than a new one.
15. Pay your life insurance annually. Insurance companies charge you more if you pay monthly, quarterly or semi-annually. Pay once a year and you’ll pay less. My savings from doing this is just over 6% a year –more than I can earn in a savings account.
16. Pay car insurance semi-annually. At least with my car insurance, they offer quarterly and semi-annual payment options. It costs more to pay quarterly, and twice a year is more convenient anyway.
17. Increase insurance deductibles. Most of us don’t need to be insured for all losses over $100 on our car, for example. Although we wouldn’t want to pay a $250 or even $500 deductible, we could. If that’s you, find out how much you’d save from raising your deductible. I’ve raised my deductibles on my auto insurance and home owner’s insurance and saved a considerable amount.
18. Think before submitting an insurance claim. My rule of thumb is that I won’t submit a claim on a loss that is less than twice my deductible. So for a $250 deductible on an auto loss, I’ll pay out of pocket any loss up to $500. Why? The $250 I’d receive from my insurance company is not worth the increased premiums I’m likely to pay. You may want to call your insurance agent to find out how a claim will impact your premiums before filing the claim.
19. Pass on extended warranties — A $139 two-year extension on a $400 product is just not worth it. Warranties are insurance, and we rarely need to insure such a small amount. Computers may be the exception, as they seem to crash and break frequently. My current computer is on its 3rd hard drive –all paid for by warranty.
20. Create a budget and stick to it — And while you are at it, get organized and avoid missed payments. I’ve missed a payment or two because the bill got buried beneath a stack of papers. Get organized and avoid those late payment penalties. If you do miss a payment, call your creditor and ask to have the penalty removed. They’ll usually accommodate the request if you have a good payment record.
So that is 20 fairly painless tips you can use to save money. Click on the comments below to leave your tips.
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