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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