Tip 8: Buy less gas for your car

Tip 8: Buy less gas for your car

Fuel is a big expense for most people.  You can get better gas mileage by changing your driving habits.  Avoiding short trips and keeping tires at recommended air pressure are the easiest ways to improve your gas mileage and spend less on fuel.  Avoiding short trips takes some planning- for example, if you bring your lunch with you, you don't need to drive to a fast food place to get lunch.

Keeping your tires properly inflated does take some work.  You can check your air pressure at each fill-up, or you can get small air pressure gauges that are built-in to valve stem caps.  I have these on my car and it makes it easy to tell at a glance if the air pressure in the tires is correct.  The indicator appears green if the tires have sufficient air pressure.

Choosing the smallest, most efficient car that works for you when you buy a car is the best place to start on getting better gas mileage.  Choosing the right car is a balance between how much cargo capacity and safety you want vs. how much fuel efficiency you want.  Hybrid vehicles are a good deal in some cases, especially if you do a lot of city driving.

If you want to improve you gas mileage, a good place to start is to check you gas mileage for your normal driving and then try to improve it from there.  Fill your tank and note your odometer reading or reset your trip counter.  On your next fill-up, take the number of miles you drove on that tank divided by the number of gallons of gas you used to calculate your miles per gallon.

Checking your miles per gallon every tank is a good motivator to keep trying to find ways to improve your fuel economy.  I am so familiar with my driving habits and gas mileage that I can tell the difference when I have extra passengers in my vehicle for even a short trip, or if I made an extra trip driving in traffic.

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Tip 9: Enjoy cheap- or free- exercise

Tip 9: Enjoy cheap- or free- exercise

Having a cheap form of exercise that you enjoy makes it easier to get exercise and stay in shape.  My favorites are walking and riding a cheap bicycle.  Walking requires no special equipment and can be done almost anywhere, anytime.  Having a bike handy allows you to cover more ground.  You can buy a good used bike for under $50 and it can provide years of exercise and transportation.

Exercise is one of those things that it is easy not to do if you have an excuse available.  If your favorite form of exercise is something like skiing or working out at an exercise club that costs money or requires going someplace special, it is that much easier to put off doing it.  If exercise is free and convenient, that removes potential barriers from exercising and staying in shape.

At times I have kept a bicycle at work so I can go for a ride whenever I have time.  I could go for quite a trek over an hour lunch break and would explore neighborhoods or ride around a lake a few miles from the office.  Walking is even easier.  You might want to have a comfortable pair of shoes to change into.  You can use a pedometer or GPS app on your cell phone to keep track of your walking distance and pace.

A cheap form of exercise is cheap entertainment and can keep you from spending money in other ways.  If you are in shape, you are less likely to over-eat.  You will also save money on medical expenses if you stay in good shape with regular activity.

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Tip 10: Save when eating out

Tip 10: Save when eating out

Of course eating out typically costs more than preparing food at home, but there are ways to save when eating out.  My favorite tips are to drink water, skip appetizers, order smaller amounts, and take home any left-over’s.  Ordering a pop typically costs $2 vs. drinking water which is free.  Water is also a healthy drink and does not contain calories or chemical sweeteners.  Appetizers are tasty and fun, but are typically expensive and have a lot of fat and calories.

Simply ordering less is an easy way to save when eating out- find a reasonable portion instead of ordering the jumbo meals.  Sometimes it bugs my wife, but I like to take home any leftovers from eating out- even if it is a few fries or a bun.  Leftovers make a great snack or meal later, and there is no sense wasting food.
A lunch buffet can be a way to get a lot of food for not a lot of money.  I think I get more than my money's worth at Chinese food buffets.  I try not to go too often, but sometimes I get REALLY hungry.  You can get vegetables and other healthy things at a Chinese buffet, and you can get as much as you want.  Sometimes it is nice to get everything you want.  If you want to save on groceries, go grocery shopping after you have a big meal.  You are less likely to buy extra food and impulse items if you are not hungry at all.

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Tip 11: Get pets at the animal shelter for almost free

Tip 11: Get pets at the animal shelter for almost free

I have gotten some great dogs and cats at animal shelters for almost free.  I also once got a great dog at a pet shop for a lot of money.  Unless you are set on a very specific breed, you can almost certainly find a great pet at the pound.  Save money and give an animal in need of a home a chance.

The initial purchase price of a pet is usually small compared with the overall cost of ownership of a pet.  You'll want to get your pet spayed or neutered to avoid an unwanted litter, which may cost hundreds of dollars.  Your pet will need vaccinations each year, also hundreds of dollars.  If your pet gets injured or hurt, this may also cost hundreds of dollars or more.  As you can see pets are expensive, but I don't remember how much I spent on my pets.

The great memories from a pet can be worth more than money.  But keep in mind that having a pet can be expensive and make sure you are willing to pay the costs before you bring home that kitten of puppy.  If you are planning to get a pet, check out the free and very inexpensive pets that need a home at your animal shelter or pound.

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Tip 12: Have less stuff

Tip 12:  Have less stuff

Having less stuff can actually help you spend less money.  With less stuff, there is less pressure for space which makes it easier to live in a smaller house and avoid paying for storage space to keep things that won't fit in your house.  With less clutter, you will be able to find and use the things you have easier- this can be more satisfying than having lots of stuff, but no room to use it.  Once you get used to having less stuff, you'll save money by not buying stuff.  Buying less stuff is also good for the environment since less resources are consumed to make and transport stuff.  How much stuff do you really need to be happy?

Even if you are not into buying stuff, you can still end up with a lot of stuff.  I try to save building material scraps, hardware items, and other things that are likely to be needed or at least that are small and easy to store.  If you find you have a lot of larger items around that makes it hard to do anything in your shop or garage, you might be better getting rid of some of the larger stuff that you don’t know if you’ll need or not.

So how do you get rid of stuff if you have accumulated too much?  I sell my extra things at consignment stores and auction houses.  This is a double win for me, since I get rid of unwanted items and also get some money.  Plus the stuff gets reused by someone who wants it.  Some things are not suitable for sale, so I donate to Goodwill or throw some things away.  I have also put items out on my sidewalk with a sign that says "FREE".  This is handy since I don't have to haul the items away, and also gives my neighbors a change to get free stuff.  I gave away my trailer that pulls behind my bicycle this way.  It was fun seeing the neighbor kids enjoying it since I didn't need it any more.

If your current amount of stuff is not making you happy, try having less stuff.  It is a lot less expensive than trying to get more stuff...

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Tip 13: Haircuts at home

Tip 13: Haircuts at home

One of the easiest ways to spend less money is to skip going to the barbershop and get haircuts at home with your own trimmers.  You can get a nice set of trimmers for around $25.  I haven't paid for a haircut in over 5 years.  At 5 haircuts per year at $10 each, I have saved around $250 with haircuts at home.  Not only do you save money on the cost of the haircut, but you save fuel by not driving to the barbershop and you save time as well.

I like cutting my own hair much better than going to the barbershop.  I cut it exactly how I like it.  At a barber shop, it seem like the haircut is a little different every time.  I also avoid the expense of the haircut and the tip.  I always found the tip part to be awkward.  Since the haircut was so expensive, I found it difficult to pay extra to leave a tip.  Since the person cutting the hair doesn't set the price, it is not really their fault a haircut is so expensive.  I would usually leave a 15% tip if I thought the person did a good job.

The only downside of cutting your hair at home is that the hair makes a bit of a mess.  I usually buzz my hair out in the garage and sweep up the hair.  When it is cold out in the garage, I use a bathroom with a linoleum floor that makes it easy to sweep up.

With practice, you can go beyond just a basic haircut with a single length.  For my latest haircut, I used 3 different lengths:  1 inch on top, 1/2 inch on the sides, and 1/4 inch above the ears and on the back.  Pretty sharp for a free haircut!

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Tip 14: Walk instead of drive

Tip 14: Walk instead of drive

I try to walk instead of drive to run errands or go to appointments when I can.  Typical walking speed is about 3 miles per hour, and you can go 4 miles per hour if you walk briskly.  It is sometimes surprising how many places you can walk rather than drive.  You save on fuel and on vehicle wear and tear by walking- plus it is great exercise.  Sometimes I walk about a mile to the grocery store from my office to pick up small items such as coffee beans, shaving cream, etc.  It is not really worth driving to pick up something that can be carried easily.  I have also walked from the auto shop to my office and back when my car is being serviced.  Many shops offer rides, but I like being able to come and go on my own schedule without waiting for someone to give me a ride.

Free transportation is hard to beat.  See if you can find opportunities to walk instead of driving to save money.

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Tip 15: Credit card points

Tip 15: Credit card points

Credit cards are expensive if you carry a balance and pay high interest rates.  But you can get some great points and rewards if you use a credit card and pay off the balance every month.

I have my credit card reward points linked to my Amazon account.  I can use my credit card points to buy anything on Amazon.  Since I have Amazon Prime, I also get free 2-day shipping.  The credit card points work to save money buying electronics and gift items.

Using a credit card is convenient compared with using cash or checks.  I like to use a credit card rather than my debit card that is linked to my checking account.  Credit card companies are better at refunding money if a card is stolen.  If I am using a credit card anyway, I might as well get points that I can use to save money.


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Tip 16: Avoid dry cleaning

Tip 16: Avoid dry cleaning

One thing that drives me nuts is paying for dry cleaning.  For most of my clothes, the cost of dry cleaning would be almost as much as the cost of the clothing.  When buying clothes, I check the care instructions and avoid buying most things if dry cleaning is required.

For clothes I do own that require dry cleaning, if the item was not expensive, I ignore the instructions and wash it anyway.  This can cause problems over time- I had a pair of dry-clean only pants that I washed for about 20 years.  Eventually all of the wool was gone leaving only the polyester.  The pants were almost transparent and I finally threw them out (after my wife insisted...)  I don't know if the same thing would have happened if I would have dry cleaned them, but can you imagine how much dry cleaning pants for 20 years would have cost?  Probably much more than the cost of a pair of pants!

Dry cleaning is a tough, competitive business and many dry cleaners offer coupons for 20% off, etc.  If you do have dry cleaning, see if you can find a coupon and save as much as you can on your dry cleaning bill.

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Tip 17: A Subway $5 footlong is a good deal

Tip 17: A Subway $5 footlong is a good deal

I generally don't like fast food- it is expensive and not very healthy.  As far as fast food goes, Subway is healthy, fast, and inexpensive.  You can get a $5 footlong sub loaded with vegetables on a nice footlong whole grain loaf for $5.  That is a deal that is hard to beat.  If you do forget to pack your own lunch and need to buy something, you can't go too far wrong at Subway.

A while back, stories came out that Subway footlong subs were really only about 11 inches long.  Lately, I have noticed that the nearby Subway store has added a ruler right on the counter where they add the meat and cheese so you can see exactly the length of your sub.

If you are not too hungry, you can get a $5 footlong, load it with toppings, and eat half for lunch and the other half for diner.  That is a pretty good deal for two meals.

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Tip 18: Use energy efficient lighting

Tip 18: Use energy efficient lighting

I have recently gotten excited about LED lighting.  I needed to find some light bulbs to use in a closet that were cool to the touch.  I tried compact fluorescent, but actually burned my hand on a compact fluorescent bulb and dropped it.  LED bulbs are cool to the touch and use very little electricity.  I have started gradually replacing my incandescent and compact fluorescent bulbs with LED bulbs.

Another benefit of LED bulbs is that I use my lights more.  With incandescent bulbs, I would hesitate to turn on lights and would turn them off right away when leaving a room since they use so much electricity.  A number of times, I accidently turned off lights when someone was still in the room in my efforts to avoid wasting energy.  LED bulbs are much more efficient and I am more relaxed about using lights occasionally.
I often use a flashlight at night to avoid turning on lights.  When it is dark and your eyes are adjusted, a little light goes a long way.  I use an LED flashlight that I got from my kids for Christmas.  LED lighting is very efficient, and batteries last a long time in an LED flashlight.  Using a flashlight at night instead of turning on lights can save money on your electric bill.

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Tip 19: Improve home insulation

Tip 19: Improve home insulation

Improving your home's insulation is a way to save money almost every day through lower utility bills.  Once you install insulation, it keeps providing energy savings for years and years.  By adding insulation, you save money on heating costs in the winter and cooling costs in the summer.  Some insulation projects are easy to do yourself and also add to the resale value of your home.  I have added insulation in the attic, walls, and under the floors of my house.  I could actually feel my house warm up as insulation was blown into the walls.
An easier project than adding insulation that can also save a lot of money is installing plastic window insulation film.  If you have single pane glass windows or older windows that are drafty, installing plastic film can reduce heat loss through windows.  The window film can be easily installed from inside using adhesive tape.

I have covered exterior doors with Styrofoam panels during winter to cut down on drafts and energy costs.  Some people stack bales of straw around the foundation of their house to keep drafts from blowing in.  Be creative in finding ways to reduce your heating bill by cutting down on drafts and heat loss in your home.

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Tip 20: Reduce your house payments with a mortgage re-fi

Tip 20: Reduce your house payments with a mortgage re-fi

If you own a home and plan to stay for awhile, refinancing your mortgage- known as a "re-fi"- may be a good way to save money.  Refinancing can allow you to get a lower interest rate and save money through lower mortgage payments over time.  There are closing costs to get a new mortgage, so refinancing only saves money if the interest rate is lower and you will be in your house for a few years.  Here is a link to a mortgage refinance calculator that I made so you can see if a re-fi would save you money.

Part of the challenge of knowing whether to refinance is that the future is hard to predict.  It is hard to know whether you will stay in the same house for a long time.  If you refinance and then move within a couple years, you will likely lose money on the refinance due to the closing costs being more than you will save on lower payments due to a better interest rate.  Interest rates change all the time, so you could refinance at a bad time only to have rates drop later.

House payments are one of the biggest bills that most people face.  See if reducing your bill for housing every month by refinancing makes sense for you.

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Tip 21: Buy used items and save

Tip 21: Buy used items and save

Some items are very cheap to buy used.  You can get used exercise equipment, books, and CD's for only a few dollars.  Why pay for new items when you can get high quality used items for a fraction of the price?  Even though prices are low, make sure to buy only items that you will actually use.

Back in college, I found a nice trench coat at a thrift shop for only a few dollars that I wore for years.  A new trench coat would have cost at least $100, this one was well under $20.

I picked up a nice Crossbow exercise machine for only a few dollars at a garage sale that I have used for years and just moved upstairs- this is the third house we have had the Crossbow in.

One of my favorite used items I bought was a 1983 Schwinn Caliente that I got for $28 that was for sale chained to someone's front porch.  I rode this bike for about 5 years, keeping at work for several summers.  I needed more room in the garage since we moved, so I sold it for $36 a few weeks ago.  I bought an old Huffy Prairie mountain bike at an auction about 15 years ago for $7.50 that still rides great and has only needed an inner tube replacement.

I found a nice electric weed eater for $5 at a yard sale.  It is an old Craftsman and still works fine.  I have replaced the cable spool a few times, and it always works great.  It is lightweight  and has plenty of power.
Not every used item you find is a good deal- some used items don’t even work anymore.  Look used items over carefully and try them out before buying if possible.

Even if the item is really cheap, if it isn’t something you will use, you are better off not buying it.  You’ll go through the trouble of taking something home and having it take up for space for years, and then go through the trouble of selling it or throwing it away eventually.

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Tip 22: Stop making car payments

Tip 22: Stop making car payments

Car payments are expensive and can be avoided.  One way to eliminate car payments is to finish paying off your car and then keep driving it.  Most cars will run for 10 years or more, so if you buy a new car with a 4 year car loan, you can drive it free for 6 years.  During those 6 years with no car payments, you can save up and buy your next car with cash.

Another way to avoid car payments is to buy a used car that is not very expensive.  I bought a 6 year old Honda Civic for $6,000 that ran great with no major repairs for 5 years.  It is hard to beat a car that runs and is paid for!

The key is to find a reliable car that you will be able to drive for a long time.  Some of the best vehicles I have had are cars that I bought at about 4 to 6 years old.  I had a Ford Escort wagon that was a great car for years and then I sold it for $4,000.  Another great car was my Honda Civic that I bought for $6,000, drove for 5 and a half years, and then sold for $3,500.

The most economical used car I ever bought was dangerous and I am lucky I didn't get hurt driving it.  It was a 1983 Dodge Ram small pick-up truck that I bought from a guy living at a dump for $450.  The back window was taken out and it had a home-made topper built on the back.  I drove it for a couple years and then sold it for $1 to my brother-in-law.

I like to figure out the cost per year for driving a car to see how good a deal it was.  For exmaple, the Honda Civic works out to $450 per year.  That is not much to pay for a vehicle.  Buying a newer car makes it hard to work out to a low cost per year, even if you drive the car for many years.  For example, if you buy a new car for $30,000 and drive it for 15 years, the cost per year would be $2,000 per year.  If you find a used car for $8,000 and drive it for 8 years then the cost is $1,000 per year.

Try to drive a used car for a long time and get it paid off to save money.  You’ll save on interest, face less vehicle depreciation, and be able to spend your car payment money on something else- or save it.

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Tip 23: Avoid recreational shopping

Tip 23: Avoid recreational shopping

Going shopping or going to the mall to walk around is a family activity that everyone can do together, although the down side is that you will often end up buying things and maybe even going out for dinner.  This can turn out to be very expensive and you can end up with a lot of items you don't really need that will fill your closets and house.

Stores and shopping malls are designed for maximum extraction of money from shoppers.  The more time you spend in stores, the more money you are likely to spend.  I try to stay out of stores unless there is a specific item I am looking to buy.

Try to come up with alternate activities such as visiting a library, museum, park, or doing a project at home together instead of going shopping.  You could even go for a walk around the neighborhood for free with no risk of buying anything.

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Tip 24: Cut small unnecessary purchases

Tip 24: Cut small unnecessary purchases

Cutting small expenses can provide a big opportunity for savings.  It is amazing how fast small purchases can add up- buying coffee, lunch, a new toy for the kids, a music download, etc.
Start by figuring out how much you can save to provide motivation to change your ways.  Keep receipts or keep a notebook and record all of your expenses for a week to get a baseline.  Then work to see what you can eliminate.

The key word to keep in mind is unnecessary.  As I have mentioned, the line between “needs” and “wants” is fuzzy, but some things fall clearly on the “wants” side of the line and can be eliminated without causing any significant consequences.  You may be in the habit of bringing home a toy for your kids when you go shopping- they would be just as happy if you write them a note of play with them.  I am sure a lot of kids would be just as happy eating a sandwich from home with you in the park instead of getting a Happy Meal at McDonalds and bringing home yet another toy that will never be played with.

Many unnecessary purchases are a product of habits- maybe you always get a cup of coffee or a donut when you get gas.  Maybe you like to get a new toy for your pet when you pick up pet food.  Maybe you like to buy a new book or magazine at the bookstore just for fun.  Purchases like this can be enjoyable- which has value, buy you may value the money you could save over time by avoiding these purchases even more.

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Tip 25: Utilize free resources at your library

Tip 25: Utilize free resources at your library

Libraries have tons of resources- and almost everything at a library is free.  Of course, you can check out free books at a library and you can also check out DVD's and CD's.  Going to the library is a good family activity, and everyone can bring something home for free.

I like to spend time at the library- in fact, I wrote parts of this book on my laptop at a local library.  I enjoy the quiet scholarly environment that you find in some libraries.  Something about being in a library makes it easy for me to concentrate and think clearly.  Maybe all of those years studying at the library in college have me trained.

You can check out free books at any library, and some libraries sell used books that they are removing from their collection and donated books that the library does not need.  I have found some interesting paperback books for 25 cents and hardcover books for 50 cents that I bought at the library and took home to keep.

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Tip 26: Free or cheap hobbies

Tip 26: Free or cheap hobbies

Some hobbies require a lot of money for equipment and expenses.  I try to avoid these.  For me, it is hard to enjoy something that costs a lot of money when I have bills to pay.  I look for free or cheap hobbies that I can enjoy and feel good about.  Some of my favorite cheap hobbies include:

* Walking
* Pets: dogs and cats
* Hiking
* Biking
* Blogging
* Writing
* Gardening
* Reading
* Watching free TV
* Repairing things
* Selling things on eBay, on craigslist, at consignment stores

You’ll notice that some of these hobbies actually can make money.  This book is focused on ways to spend less money- in a future book, I plan to explore easy ways to make money.

Take a look at your hobbies and how much you spend on them.  Consider switching to less expensive hobbies- you may find that you enjoy them more since you have to worry about spending less.

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Tip 27: Get an artificial Christmas tree

Tip 27: Get an artificial Christmas tree

For 10 years or so, we would buy a natural Christmas tree every year.  Although it was fun to bring home a fresh tree, it cost about $50 per year depending on the size and quality of the tree.  One year we got a potted live evergreen tree with the roots still attached and planted it in the yard in the spring after using it as a Christmas tree.

A few years ago after my favorite Christmas tree lot closed, I ended up getting an artificial Christmas tree instead of buying a natural Christmas tree each year.  The artificial Christmas tree cost under $100 and we have been using it for over 5 years so far.  This is another example of a small expense that can add up to a lot over years.  I think my parents have been using the same artificial Christmas tree for about 40 years- imagine how much they have saved on Christmas trees over the years.

Artificial trees are more convenient, since you only have to transport it home once, and they don't try out and drop needles like natural Christmas trees.  Also, I never really liked the idea of killing a tree just to use as a decoration.

Another way I keep expenses down during the holiday season is by not having outdoor Christmas lights.  I like to look at Christmas lights, but I am not a big fan of climbing around on a ladder trying to attach lights to my house or trees.  It is much easier to put some lighted decorations in windows that look nice from outside.  You can save a lot of wear and tear plus electricity by skipping outdoor the Christmas lights.

If you buy a natural Christmas tree every year, consider getting an artificial tree instead to save money.  You can even pine scented air freshener if you miss the smell of a natural Christmas tree...

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Tip 28: Plan meals, shop with coupons

Tip 28: Plan meals, shop with coupons

A big money saver at my house is to plan out meals for the week and go grocery shopping to make sure we have all of the ingredients for the meals.  This really cuts down on eating out and helps save money.  Planning meal ideas in advance is important at our house- otherwise no one can agree on what to have for dinner and we end up eating cereal or sometimes ordering pizza or eating out.

Another benefit to planning meals is that you can look at coupons that you have to help select meals based on the good deals at the grocery store.  It is a lot easier to figure out good dinner ideas when you are not tired and hungry at dinner time.

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Tip 29: Drop newspapers and magazines

Tip 29: Drop newspapers and magazines

There is lots of free news and articles available on the internet.  Dropping the daily newspaper was one of my first reactions a few years ago in the economic downturn around 2008.  I like getting a newspaper, but it is not really necessary for me.  I still buy a Saturday newspaper most weekends- I like the coupons, and having newspaper around is handy for starting fires and to use to protect surfaces during painting projects.
I still get a few magazines, many subscriptions work out to about $1 per issue.  Magazine subscriptions were another area that I cut back in 2008.  I had gradually subscribed to more magazines without eliminating any and was receiving more than I actually read every month.  I liked them all, but did not need them all.  There are all kinds of interesting things you can read on the internet free at any time.  Tip #101 has a good suggestion for free reading material that can help replace newspapers or magazines.

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Tip 30: Staycation instead of vacation

Tip 30: Staycation instead of vacation

Vacations can be an inefficient way to make memories.  You spend a lot of time and money moving from one place to another.  When I lived on the farm, we had "work camps".  We would stay in a tent in the yard and worked on projects like building a chicken coop.  If you don't want to stay at home, you can visit local attractions with your family during the day and stay in your own bed at night.  This allows you to skip the time and expense required to travel a great distance and stay in a hotel.

If you do decide to travel for a vacation, you can save money by staying with friends and family instead of staying at hotels.  Camping is also another inexpensive lodging option while traveling.

If you are looking for free lodging, you can sleep in your car.  I have stayed in my car overnight when traveling a few times.  Sleeping in a car can get cold at certain times of the year, and you have to be careful to park in a safe place.  One time I parked in a parking area at a rest stop in Pennsylvania under a streetlight.  There was a guy nearby who was frustrated with his car.  He was hitting his engine with a tool over and over, banging away for what seemed like hours.  I didn’t get much sleep that night since I was keeping an eye on that guy and since the light was too bright.  I thought about driving on, but by that time of night I was too tired to drive.  Another time, I pulled over at a rest stop in New Mexico in December to sleep.  It was quiet and dark there, but after about an hour, I was too cold to sleep- even with my Mexican blanket that I picked up on the trip.  So I kept driving so I could run the heat in the car.

It is easy to spend a lot of money when traveling or on vacation.  See if you can find ways to spend time relaxing with family and making memories that don’t cost so much.

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Tip 31: Stop buying lottery tickets

Tip 31: Stop buying lottery tickets

I still buy a lottery ticket occasionally- it is fun to imagine what I would do if I won.  But I realize that the odds of winning are extremely small.  Some people buy lottery tickets every week.  This is like paying a tax that you don't have to pay.  Considering the odds of winning, and the probability that you would have to share the prize if you win, the actual value of a lottery ticket is less than 50% of the purchase price.  Buying lottery tickets is not a good financial strategy.

Let’s say someone spent $10 per week on lottery tickets for 40 years.  That adds up $20,800 for lottery tickets.  The person may get lucky and win millions of dollars, but the most likely scenario is that our gambler will win some small prizes, perhaps amounting a few thousand dollars over the years.  But if our gambler were to invest $10 per week for 40 years, it would grow to $140,000 getting historical average stock market returns of 8%.  Of course, there are some people who say that investing in the stock market is gambling too, but your chances of making money in the stock market are much, much better than winning the lottery. The 8% historical average stock market return includes the Great Depression and other downturns.  If you can invest for the long term, you have a good chance to grow your money.  Buying lottery tickets has an average return more like negative 50%.

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Tip 32: Stop smoking

Tip 32: Stop smoking

Cigarettes are expensive- over $5 for a pack in most places.  Many people who smoke go through a pack or two a day, so the expense of smoking is like making a car payment.  Everyone knows smoking causes serious health problems.  Cigarettes are one of the few products that will kill you when used according to the directions.  If makes me sad to see young people smoke- they are ruining their health for no good reason.
If you smoke a pack a day and quit smoking, you'll save at least $150 per month just on the cost of cigarettes.  You'll save much more in terms of improved health and quality of life.  If you are a smoker, start with this tip, it will save you the most.

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Tip 33: Take shorter showers

Tip 33: Take shorter showers

Heating water is expensive, you can save money by taking shorter showers.  Some people like to take long hot showers.  I remember in a Civil Air Patrol summer camp as a teenager taking 1 minute showers.  It can be done.  Also use less shampoo, you don't need much to clean your hair.  The chemicals in shampoo are not good for your hair anyway.

The cost to heat water for a 10 minute shower costs about 50 cents.  If you take a shower every day, the energy cost for hot water is about $180 dollars.  If you take 5 minute showers instead, you'll save $90 per year.  If you have a family of four and everyone cuts there 10 minute shower to 5 minutes, you would save $360 per year.  This is not a huge savings, but I like the idea of spending less money and conserving resources whenever I can.  Shorter showers not only save energy, but conserve water as well.

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Tip 34: Find out where your money is going

Tip 34: Find out where your money is going

One way to cut spending is to really understand where your money goes.  There are a few big expenses that are easy to understand- housing, vehicle payments, utility bills, and food.  The opportunity most people have to reduce spending is by working on everything else, so understanding the smaller expenses and how much really goes for food is important.

Doing the work to figure out in detail where your money is going can be a great tool to spend less.  When you look at monthly totals and realize you are wasting hundreds of dollars per month on wasteful spending, you may be motivated to change spending habits and keep this money instead of giving it to others.  This is a motivator for me.  When you spend money, it generally ends up in the hands of people who need it less than I do.  It seems like store owners, company shareholders, bankers and others with lots of money are the ones who end up with most of the money that I spend.  I am happier keeping more of my money myself than having it end up in the hands of people who already have plenty of money.

When you see that you are giving a lot of money away to other people- people who need it less than you- this helps you focus on keeping some for yourself instead.

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Tip 35: Avoid boarding your pets

Tip 35: Avoid boarding your pets

Boarding pets can cost about as much as a hotel room!  See if you can have a friend or someone in your family watch your dog next time you travel instead of boarding your pet or taking fido along on the trip.  You can return the favor by watching their pet sometime.

You can avoid pet boarding by taking your pets with you when you travel.  I have taken dogs along on car trips.  I have had dogs stay on travel trailer camping trips and also at hotels.  You can find hotels that allow dogs.  I have seen dogs on trips at the airport, but have not tried this myself.  Airfare for a pet can run over $100 each way.  This could still be cheaper than boarding, depending on the length of your trip.

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Tip 36: Get multiple estimates for home improvement projects

Tip 36: Get multiple estimates for home improvement projects

It can be difficult and time consuming to get multiple estimates for a home improvement project.  I once got an estimate for roofing my house from a popular roofing company.  When I looked at the estimate, I realized I had no way to know if the estimate was low or high, so I got a couple other estimates.  The low estimate was about $3,000 less and I went with the lower price.  You may not always want to pick the lowest estimate, but it is good to have a few independent estimates for the same work.  If a company is busy, they may give a higher estimate.  You may be able to find a company that is hungry for work and will give a lower estimate.

You can sometimes use one estimate to help negotiate a better deal- explain that you got a lower estimate and give the company you want to deal with a chance to match the lowest estimate you received.
Another benefit of getting multiple estimates is that if provides a "cooling off" period that helps you avoid an impulse decision that you may regret later.  If someone offers to do work, you can always say that you need to get a couple other estimates.  During the time it takes to get the other estimates you have time to think about if the project is necessary and the highest priority for spending your money.  I can remember several occasions where I got estimates for projects and decided not to go forward.  Not doing optional projects is a great way to save money!

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Tip 37: Get enough sleep

Tip 37: Get enough sleep

Getting enough sleep is free, you'll feel better, and be less likely to over-eat or make poor decisions when well-rested.  I try to be in bed 8 hours a night which usually results in about 7.5 or so hours of sleep considering interruptions like my dogs needing to go out.  I like to have it very dark when I sleep, and prefer cooler temperature.  I use a programmable thermostat that automatically turns down the temperature at night in winter.  I use a fan in summer to stay cool and get good sleep.  I think it is easier to get good sleep when you go to bed at the same time and get up at the same time every day.

If you are not getting enough sleep, try to make changes to get enough rest.  This provides a good foundation for increasing your willpower and being able to consistently make good choices to spend less money.

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Tip 38: Eat less

Tip 38: Eat less

Most people are overweight.  If fact, the average American is 23 pounds overweight- that is a lot of extra weight.  Most people can simply eat less- you will save money on food and loose some of that extra weight.  Food is one expense that almost everyone can reduce and it is actually good for you to eat less for almost everyone.  The cost for food to gain 23 extra pounds that most Americans have is about $720.  I know I would rather have 720 extra dollars than 23 extra pounds!  Most people can simply eat less and pocket the money they save by not buying unneeded food.

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Tip 39: Cut down on travel

Tip 39: Cut down on travel

Traveling for meetings is expensive- use technology to save money.  Sometimes meeting face to face cannot be replaced, but routine business can often be conducted effectively through Skype or phone calls.  This can apply to traveling long distances and also to traveling a few miles in town.

Sometimes I call into meetings instead of driving to a different location.  This works well for routine meetings when you already know the people involved.  You can easily add video cameras, but I usually just go with audio and share slides or spreadsheets from my computer at teleconferences.  You can save a lot of time and money if you can find ways to travel less.

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Tip 40: Install a programmable thermostat

Tip 40: Install a programmable thermostat

If you have an older thermostat, you may be able to save a lot on your utility bills by upgrading to a programmable thermostat.  A programmable thermostat allows you to set temperatures for various times of day so you can spend less heating or cooling your house when no one is there.  For example, you can program your thermostat to warm the house up to 68 degrees by 6am, and then turn the temperature down to 60 degrees starting at 8am when no one is home on a week day.  You can turn the thermostat down manually, but it is easy to forget and you waste money heating your house when no one is home.
You can install a programmable thermostat yourself in about an hour with no special tools.  The total cost for the project is around $75 for a nice touch screen programmable thermostat that will last for many years and will pay back many times over in energy savings.

I like it when I can find a way to save money that results in improving my house and making things more convenient for me.  Once I got my programmable thermostat installed, it takes care of turning the temperature up and down for me automatically.  I think of it as a robot that works for me to save money on my utility bills.

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Tip 41: Chew gum instead of eating a snack

Tip 41: Chew gum instead of eating a snack

As we have learned in one of the other tips, most people are overweight, so eating less is usually a good thing.  Chewing gum instead of having a snack is a good way to save money.  A piece of gum costs less than 10 cents and is good for your teeth.  Chewing gum can give you a lift, but without the calories and expense of eating a candy bar or similar unhealthy selection from the vending machine.  I usually go for sugar-free gum- Orbit Sweet Mint is my favorite.

For some reason, my son bought some sugar free bubble gum and decided he doesn’t like it, so it’s bubble gum for me for a few weeks...

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Tip 42: Switch from soda to free water

Tip 42: Switch from soda to free water

Free is hard to beat, especially where beverages are concerned.  You can get a bottle of soda for about $1.50 that is loaded with calories for regular soda or loaded with chemicals for diet soda.  It takes some time to switch from drinking soda- if you are accustomed to drinking soda, then plain water will not taste very good.  If you are used to having caffeine, it will take time to get used to not having as much caffeine.  Start by substituting some of your soda with water and eventually try to have soda only for special occasions.  This is much healthier and will save lots of money too.

If you drink 2 sodas a day at $1.50 each, you'll save $90 per month by switching to water.  Just make sure to switch to free water- bottled water costs about as much as soda and is the same as tap water.  Some popular brands of bottled water are actually bottled from city water supplies- it is literally bottled tap water marked up from less than one cent worth of water.  You can easily bring your own water from home.  I sometimes use an aluminum water bottle and fill it with filtered water from my refrigerator.  You can usually find a place to fill your own water container during the day- for free.

Tap water is so cheap it is virtually free.  The cost of tap water is about 2 cents per 1000 gallons in most places.  All you need to take advantage of free drinks is a refillable bottle.  I have an aluminum bottle that I sometimes use.

You can save some money by drinking bottled water instead of soda.  You can get bottled water in large packs for around 30 cents per bottle, which is a lot cheaper than soda.  Tap water is much cheaper than bottled water if you want to save even more on beverages.

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Tip 43: Cut down on coffee

Tip 43: Cut down on coffee

Even though I was brewing my own coffee, I was drinking about 32 oz each morning.  That is a lot of coffee and a lot of caffeine.  I would carry a 16 oz mug and a thermos with another 16 oz of coffee.  I would stop half way to work to fill my cup on my drive to work.  I remember my doctor’s eyebrows going up when I told him how much coffee I was drinking.

I gradually cut back to 16 oz of coffee a day.  Since coffee has caffeine, changing the amount you consume can cause headaches and other symptoms.  I gradually reduced the amount I was drinking until I could get by on a 16 oz cup.  This reduced my coffee expense from $1.20 per day to 60 cents per day.  If you are buying coffee at a coffee shop, you could save $2 per day by dropping form 2 cups per day to one cup per day.

The “gradually cutting back” part is important if you want to reduce the amount of coffee you are drinking.  I have tried at times to suddenly cut back.  I get headaches and then go back to my usual amount.  What works will for me is gradually cut back on the amount of regular coffee grounds.  You can either just drink less coffee, or use some decaf coffee grounds and reduce the ratio of regular coffee to decaf coffee over time.

Since I have cut back to one 16 oz cup of coffee per day, I get decaf when I want to have a second cup to warm up.  I think this is about the right amount of coffee for me, and I can handle the 60 cents per day cost.

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Tip 44: Pay off high interest credit cards first

Tip 44: Pay off high interest credit cards first

You can save money on interest by paying down credit cards with high interest first.  Some credit cards have interest rates over 20%- these are the ones to pay down first.  Consider a balance transfer to a card with a lower interest rate.  This will help you pay off your debt faster.

Some financial planners recommend a "snowball" approach to pay off credit cards by starting with the cards with the smallest balance first.  When you get a card paid off, you apply its payment amount to the next card.  I think this can work for some people, although you would spend a bit more on interest than if you attacked the cards with highest interest first.  One advantage to paying off the cards with small balances first is that you get rid of a minimum payment every time you pay off a card, which gives you more money to pay down other cards.

I would say that as long as you are paying off credit cards, the order is not that important.  If you have to choose which card to pay off first, choose the one with the highest interest rate.

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Tip 45: Negotiate on hotel rates

Tip 45: Negotiate on hotel rates

I have been able to get a lower price on hotel rates by negotiating.  Here's how it works:  at the front desk, ask for their best rate on a room.  Even if you already have a reservation, ask for their best rate.  If they are trying to fill their rooms, they may offer you a good deal.  If the price they offer is the same as your reservation price, ask if they have discounts for AAA.  If they do offer a better deal than your reservation, they can easily update the price for you.

I have signed up for several hotel points programs.  These programs let me accumulate points on personal and business travel.  I have been able to use points to stay free in some pretty nice places such as downtown Chicago and Washington DC.  If you stay in a hotel, you might as well sign up for the points program and start collecting points.  It doesn't hurt anything and you might end up getting some points you can use for free hotel stays.  I hesitated to sign up at first since I didn't think I would travel enough to get many points, but over time I racked up enough points to get some free stays.

Obviously, the best way to save money on hotels is not to stay in one.  Buy if you are staying in a hotel, you might as well try to get the best deal you can.

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