Posts Tagged ‘expense’

Breaking Free

There's nothing about the act of bill-paying that's any more inherently onerous than, say, filing or making follow-up phone calls or taking care of any other to-do — why then do we dread it more than other tasks? It's funny the effect an outlay of cash has on people. We love to spend money in the abstract — but when the time comes to ante up, we panic. A good deal of financial procrastination is simply buyer's remorse — we don't want to face our spending habits, those impulse buys and unnecessary purchases that now seem so foolish.

But even without regretting the purchase, there's still stress involved with bill-paying. You might worry about rising interest rates or dropping home values, the security of your paycheck or how much is being withheld to cover taxes — or any of a number of other issues that are entirely beyond your control. So much of what happens in the world of finance these days seems out of our hands, and uncertainty is always unnerving. The good news is that you don't have to worry about getting your bills paid on time, not with the right system (and as Forrest Gump says, “That's good! One less thing!”) Here are a few tips for making that monthly round of check-cutting a lot less stressful.

  • cut down on your expenses (it goes without saying that the fewer bills you have, the easier it is to pay them each month — of course you need electricity and groceries and a home to live in — but I'm sure that if you examine your statements and receipts, you'll find at least a few recurring items that could be trimmed from the budget — memberships you don't use, subscriptions you don't read, services that duplicate one another, excessive numbers of multiple credit cards, each with just a few charges on it — these bills do nothing but complicate your finances each month — it's time to clean house in the bill-paying sense — if you don't need it, lose it, and make your monetary life a lot easier right from the start)
  • align your bill-paying dates (part of what makes bill-paying such a pain in the neck is having to do it multiple times each month — one round of bills come due on the 1st and another on the 10th, then more on the 15th and a final batch near the end of the month — it's no wonder staying on top of it all takes so much of your time! — what most people don't realize is that most companies can adjust your billing cycle to end on whatever date you like — of course, your utilities and mortgage will always be due at the start of the month, so why not have your phone, internet, credit cards, insurance, and other monthly bills arrive at the same time? — that way, you only have to engage in one round of “pull-out-the-checkbook” each month)
  • pre-pay for the year (with set fees like insurance premiums, memberships, and flat-rate services, you can often save money by paying for the entire year up front — and even if there is no discount attached, you'll still save a lot of time by skipping monthly billing — if you have the money in-hand and know you'll be with that company for at least 12 months, ask if you can pre-pay your account for the year — just make sure that you'll be refunded the pro-rated amount if you cancel your service before the end of that period)
  • consolidate (a number of years back, Matt and I decided that we were tired of having to keep track of so many different bills — we examined our options and decided to pay as many bills as possible with our credit card, so we would only have one check to cut each month — it turns out that almost anything can be charged to your Visa or Mastercard — of course, gas and groceries and haircuts, but I'm also talking about your mortgage, your insurance, and even your utilities — I'm allergic to “convenience fees,” so we only do this if there is no additional cost for a credit card payment — and it only works when you pay the card in full — but it's amazing how much this one change simplified our finances — it also makes budgeting easier, because we can review every purchase for an entire month with one glance)
  • set up auto-pay (another step toward lifting the yoke of bill-paying from our necks was shifting everything to auto-pay — I came to realize that there was no good reason for me to ever have to write a company a check again, when I could have the bill either auto-charged to my credit card or auto-drafted from my bank account — my preference is for the first option, so if a company makes a mistake and takes too much money, I can dispute the charge before the cash comes out of my account — I really only use bank auto-drafts for paying the over-arching credit card bill — a lot of people are scared of auto-pay, because they're worried they'll get ripped off — but if you are reviewing your statements every month and reconciling your accounts like you should be, the chance of this happening is almost non-existent — and if you're not, you're just as likely to have an error go unnoticed, even when you pay all of your bills by check)
  • create a monthly routine (now that you've simplified bill-paying as much as possible, you just need a good routine for staying on top of it all — set one day a month aside for bookkeeping — start by reviewing all of the bills you've received, both paper and electronic, for errors — then reconcile your credit card and bank statements, double-checking to make sure that every bill on auto-draft was paid — finally, write and mail checks for the remaining bills that must be paid manually, if there are any — and don't forget to record those in your register — three simple steps and you're done until next month!)

Having Fun On The Cheap

If you think that enjoying life has to cost a lot of money, you've never been out with me! Matt and I manage to cram more serious fun into our days than anyone with so little disposable income has a right to. Some “frugality experts” will tell you that you have to limit yourself to movie night at home or packing a picnic in order to save money — I say bollux! While I certainly enjoy a potluck gathering with friends or a DVD-date now and then, I'm not about to give up going to the theater, museums, theme parks, concerts, zoos, and great local restaurants for the sake of pinching a penny! You can still do all these things when you're on a budget — you just have to be ready to pounce on the good deals as they pop up. Remember, living frugally is not abstention — it's about eliminating the unnecessary expenses so you can afford to partake in those activities that are worth the cost. Here are a few ways to find fun at a discount.

  • know your priorities (I personally think that one of the biggest budget-breakers when it comes to entertainment is being drug along to an expensive activity just because your friends wanted to go — this has happened to us more than once — we've been talked into pricey dinners at restaurants we didn't care about, concerts featuring musicians we didn't especially like, and movies that we knew were going to suck, in order to please another person — certainly, group recreation is all about compromise — but when you're being asked to fork over money you don't want to spend for an activity that doesn't interest you, you need to speak up — tell your buds that you would love to get together with them, but that you'd like to plan something else — explain that you're saving money, admit that you aren't that excited about the event, even lie and tell them you've got other plans that night, whatever you're comfortable with — but don't allow yourself to be railroaded into spending your hard-earned entertainment cash on something you're likely to regret or possibly resent later)
  • multi-media savings (Matt and I never pay full-price to see a movie anymore, because there are just too many ways to get our film-lover's-fix for less — we might go to a matinee, as long as it's not an animated flick that's likely to be full of screaming children! — we often buy half-price tickets through a discount service like Entertainment.com, Groupon, or AAA — we borrow movies from the library — we are signed up to receive notice of free rental codes for Blockbuster Express and RedBox through a company called Cities On The Cheap — these are usually good once per credit card, so if you have multiple cards, you can rent a couple of movies at a time for $0 — just be sure to return them within 24 hours or you'll start racking up $1-a-day charges, which doesn't sound like much but completely defeats the purpose of a free rental code! — and of course, we participate in Netflix — the trick to maximizing these sorts of “membership” rental clubs is volume — let's say that you're paying $8 a month, but you let each DVD sit around on your coffee table for 2 weeks before returning it and receiving the next disc — you might only get to watch 2 movies a month, and you're paying $4 a rental for them — but if you receive a disc, watch it that night, and return it the next day, you could get as many as 8 films out of your monthly membership at $1 each — throw in a few instant download viewings, and you've got a real bargain!)
  • learning to share (I don't have to tell you that restaurant portion sizes are absolutely ridiculous these days — very rarely do Matt and I get two full entrees when we eat out, because it's just too much — I would be happy to buy a smaller meal for a smaller price, but restaurants don't offer that option because they can make more money selling you more food — so we either get one entree to split, a couple bowls of soup and an appetizer, or a few “small plates” like you get at a tapas restaurant — the same goes for “tasting” events — on pub tours, we share a pint at each stop — when traveling through wine country, we share a tasting at each vineyard — that way, we each get to try more different kinds of drinks, and it takes longer to reach our legal limit! — and if you don't have a built-in food partner, just invite a friend along to split the cost with you)
  • happy hour (even if you aren't a big after-work drinker, happy hours are a great way to eat at a nice restaurant for less — most places offer “small bites” for just a couple of bucks each, along with their 2-for-1 beverages — pick up two or three sampler-sized plates to split, and you've got an entirely acceptable early-evening meal)
  • free admission days (attraction tickets have gotten so expensive, I don't understand how families with a bunch of kids can afford to go on vacation anymore! — but most museums, zoos, aquariums, botanical gardens, and parks offer random “free admission” days throughout the year — these might be just for local residents, or they may be open to anyone — some are even regular monthly events, like a “free first Friday” in which the facility stays open late and offers special activities — the National Park Service gives free admission to all of its facilities twice a year — the Smithsonian Institute provides free admission to its affiliate museums each fall — Target sponsors a number of free museum days around the country — and Bank Of America credit card holders can visit a variety of museums throughout the United States at no cost)
  • festivals and art walks (in my opinion, there's no better way to spend a free day than wandering around a cultural festival — and during nice weather, you can find something to keep you occupied nearly every weekend — enjoy live performers, look at beautiful art, let the kids play in a bouncy-house, and just soak up the carnival atmosphere — but be aware of fairs that exist just to make you spend money — I personally can't stand festivals that are nothing but vendor and food booths, with no entertainment and nothing to really do — I'm not interested in paying an admission fee for the privilege of spending more money buying food and shopping for crafts! — and if you haven't ever been to an “art walk,” you should definitely see if there is one available in your town — a group of galleries stay open late, offering free wine and munchies and entertainment, welcoming anyone and everyone to view their works — it's a fun way to discover new artists you had never heard of before, meet interesting people, and infuse your week with a little culture for free!)
  • leave off the extras (quite often, it's not the main event that costs so much when you go out, it's all the add-on's — candy and popcorn at the movies, a t-shirt at the zoo, a souvenir program at each concert, an elephant ear at the fair, a dog and a beer at the ballgame — these “little” expenses can add up in a hurry — I'm not suggesting that you deny yourself something you really want, but take a second to ask yourself whether that purchase is essential to your enjoyment of the event — did you come to see the show, or to eat overpriced, crappy tasting snacks? — and could you enjoy the show just as much without it? — it's also good to follow this rule of thumb when eating out — restaurants make the majority of their profit off of drinks, appetizers, and desserts, but do you really need a 4-course dinner? — I would personally rather enjoy a really good entree and let the other stuff go! — if you just have to bookend your meal, why not serve drinks and appetizers yourself before going out, then invite everyone back for coffee and dessert after the meal?)
  • discount services (the internet is a wonderful resource for half-price admissions to your favorite attractions — if you're familiar with those coupon books that the high schools sell as a fundraising tool, you'll love the Entertainment.com, website — you can buy an annual membership for the same price as a single coupon book, then have access to discounted tickets and buy-one-get-one meals at locations throughout the country — perfect for when you travel! — I'm also a big fan of “daily deal” websites like Groupon, as long as you're good at sifting through the myriad of sale emails to find those activities you enjoy — and we almost never go out to eat without using Restaurant.com — you might spend as little as $2 for a certificate that gets you $25 off a $35 meal — it sounds a bit complicated, but trust me, it's worth learning the system for the savings, and we've found some of the best restaurants that we never would have thought to through their site)
  • go for the combo deal (many times, purchasing a pass that combines a number of activities can save you big bucks, especially in a city that thrives on tourism — companies like City Pass and Go USA have special arrangements with tourist destinations, saving you as much as 50% off the regular price of admission to their most popular sites)
  • ask for a discount (if you know when you'll be in a certain area, ask the Convention And Visitor's Bureau about any discounts they have available — these folks are paid to help tourists make the most of their visit, and many times their member attractions give them passes to hand out — but you'll never know if you don't ask! — and don't forget to contact individual attractions directly — most will be able to point you toward a discount coupon on their website or a special deal available during your visit)
  • volunteer (if you love high-brow performances but can't swing the cost of a season ticket to the symphony or theater or opera, there's still a way to get a good seat for less — volunteer as a ticket-taker or usher or even a docent giving tours during off-hours, and you will probably be rewarded with free admission to the show — just call it cultural “sweat equity!”)
  • bring your own (concessions at events have become a multi-million dollar business in this country, but you aren't always required to buy your food and drink on-site — you can almost always bring at least a bottle of water and a few snacks with you — and even though you might not be able to tote a cooler through the front door, most places offer picnic-style seating just outside the gates — Matt and I love to pack a gourmet “nosh” and take a break in the middle of the day to enjoy some stinky cheese, veggies, and hummus!)
  • getting outside (certainly, the cheapest and probably healthiest way to spend a day is getting some exercise — going for a day hike or a walk around town costs nothing at all, and gives you a chance to see things that you would have otherwise missed in a car or on a tour bus — I'll walk for miles when I'm let loose in a new city — in fact, one time during a walk through D.C., I ended up in Maryland without even realizing it! — but Matt and I also carry our sports equipment with us so we can take advantage of any other al fresco activities — over the years we've acquired a bikes, rollerblades, tennis rackets, camping equipment, ball gloves, an inflatable kayak, boogie boards, and snorkel equipment — it was totally worth the upfront investment, and now we're ready for anything — plus, we never have to pay a rental fee to enjoy a little bit of nature)
  • staying home (of course, a night at home with friends or family can also be tons of fun — grill out or have everyone bring a potluck dish — pull out the board games,  play cards, or challenge your mates to a Guitar Hero competition — pop some healthy popcorn and host a film fest in your own living room — carve pumpkins at Halloween, decorate eggs at Easter, or trim the tree at Christmas — there are so many ways to enjoy the company of those you love without spending a penny)

Pinch That Penny Until It Screams

I come from a long line of serious penny-pinchers — my father was a world-champion cheapskate, so I learned from the best! In fact, one of my two superpowers is the ability to magnetically attract bargains (the one is good parking karma.) I don't see any shame in trying to save money, so I say take advantage of every sale, coupon, and special you can find — as long as you aren't just shopping to get the discount. Remember, it's only a bargain if you were planning to purchase it in the first place. This was a concept my father never seemed to grasp. He'd come home from the grocery store loaded down with crap we were never going to use — but even if it ended up going to waste, he would still insist it was a good buy because it was so cheap! And if you think that you have to clip coupons to trim your budget, think again — all you have to do is realign the way you view shopping, spending, and saving money.

  • plan before you shop (impulse buys will kill your budget faster than anything — if you go to the store to buy bread and milk, don't come home with fried chicken, chocolate cake, and a bottle of wine, too! — if you want to prevent a bigger-than-expected bill at the checkout stand, then you've got to avoid “browsing” — know what you want before you walk in the front door and keep your eye on the prize — only visit those sections of the store where the items on your list are located, move purposefully, and try not to be distracted by “sale” signs — planning ahead also means scouring the internet or newspaper for deals BEFORE heading to the store — make sure you've got a system for storing and organizing your coupons, one that is portable and that you keep either in your purse or in your car — it does you no good to remember that you found $1 off of that item in the Family Circle that week, if you've left it at home on your kitchen counter)
  • harness the power of the internet (you can also save tons by signing up for programs like Restaurant.com, Entertainment.com, and Groupon — however, maximizing these deep discounts requires that you remember to look for and print out their certificates in advance — just be careful about loading up on deals you THINK you might use, then allowing them to expire before you can cash them in — I find that the best approach is to have a system for locating savings — before I do anything costing money, whether it's eating out or visiting a museum, getting the oil changed or replacing a toner cartridge, I check my discount sites — I also visit the actual company/store website, and perform a general internet search, as well — and don't forget to look for coupons through your AAA membership, credit card, or professional association — you never know who's going to be offering a special that week)
  • shop smart at the supermarket (grocery stores are scientifically designed to make you spend more money than you intend — name brands are placed right at eye level, while off-brands are hidden away on higher or lower shelves — but it's worth the search to find a generic version whenever possible — ironically, you're actually getting the exact same product as the big brands, for as much as 50% less because you're not paying for the advertising and flashy containers — another grocery trick is locating more expensive foods at the heart of the store, while cheaper bulk items are shoved way off along the perimeter — to save money, stick to the outside ring of store, where the fresh fruits, veggies, meats, and dairy reside — and when you do have to visit the interior for a package of pasta or some disinfectant, try to avoid all those pre-packaged meals and snacks — “convenience” foods will burn a hole through your budget in no time!)
  • be an opportunistic shopper (smart savers are flexible shoppers, willing to bend their needs to match what's on sale — so if you had originally planned to make spinach lasagna for dinner, but it turns out that spinach is regularly priced and eggplant is half off, you might consider eggplant parmesan instead — substitution is king! — pay attention to the sales in the grocery store circular, because those usually emphasize deeply-discounted items that they are overstocked on and need to clear out quickly — but of course, only take advantage of store-provided coupons and specials when it's something you needed anyway — supermarkets are notorious for providing a “sale” on a more expensive name brand item, which ends up being more costly even after the discount that if you had just bought the generic version)
  • look at unit price, not total price (when comparing different brands and different sizes of the same product, it can be hard to tell which is the best bargain without a slide rule, scientific calculator, and advanced calculus degree! — so the way to get the best deal is to pay attention to “unit price” — this is the one constant in grocery store mathematics, how much that item costs per ounce or pound or piece — fortunately, most stores now provide this information right on the sign for that product, so it's easy to see whether buying a different brand or a larger bulk size container is going to save you more)
  • comparison shop (the difference in price on the same exact product from one store to the next can be staggering –  companies count on the fact that you will be too busy to shop around, that you'll be willing to pay a bit more to run all your errands in one place — but it's usually a lot more expensive to buy food at a drug store and household cleaners at the supermarket, than if you got each at a shop specializing in that category of product — and don't forget the power of the internet when it comes to comparison shopping — if an item costs $40 in the store, you can probably find it for half price or less on Amazon or Ebay or some other discount site that has lower overhead than a brick-and-mortar retailer)
  • stock up (shopping in onesies and twosies is almost always more expensive than buying in bulk — purchasing larger quantities of just about anything, from spaghetti to ball point pens, toilet paper to motor oil, will cost you less per unit — if you don't have the space to store a case of canned green beans, or you can't eat  15-pound slab of salmon before it goes bad, find a few friends to split the deal with you — just be sure to evaluate that unit price before you buy, especially when shopping at the warehouse clubs — some items are a good deal, but some are actually more expensive than if you bought a smaller quantity elsewhere — another way to stock up is to take advantage of seasonal sales, like back-to-school, Black Friday, inventory time, and after the holidays — load up on school supplies for the next year or holiday decorations or household staples when they are marked way down)
  • loyalty pays in the end (as long as there are no annual fees, customer loyalty clubs are a great way to either save money on your purchases or earn cash back for shopping with a particular merchant — some stores have even started marking their products up higher for non-club shoppers, so they can offer deeper discounts to those with the magic membership card — it's a little bit disingenuous, but you might as well take advantage of the disparity!)
  • barter is smarter (whenever you can trade for the products and services you need, you'll almost always come out ahead — folks are willing to offer more generous “packages” when there's no exchange of cash to deal with, no sales tax to charge, and no paper trail for the IRS to follow — if you don't already sell something that you could offer in barter, think about using your talents creatively — you might help your chiropractor's office with filing in return for adjustments, or stuff envelopes for a mass mailing your gym is sending out to pay for your membership fee — you could provide home-baked refreshments at your hair stylist's open house as a swap for a free cut and color — you could even offer babysitting services to your favorite cheese shop owner if she'll keep you in brie Wink — everyone has something of value to offer others)
  • used is the new “new” (while of course, you probably don't want to be shopping for used underwear or yogurt, there are very few other consumer goods that you have to buy new — and while I'm a big thrift-store girl, I'm not suggesting that you have to shop at the Salvation Army to get a deal either — consignment stores carry top-brand clothing at a fraction of the cost — plenty of electronics stores resell used movies, music, and video games — CraigslistEbay, and even the Amazon marketplace can be great resources for bargains on sports equipment, appliances, computer equipment, tools, toys, anything you can think of — and, of course, this rule goes double for vehicles — new cars depreciate by as much as half the minute you drive them off the lot — buying a good 1-year or 2-year-old vehicle will save you a ton — if you're concerned about possible problems, shop with a certified reseller that offers a warranty)
  • take advantage of “free” (I am continually amazed at the number of things you can get these days without spending a cent — join the birthday club at your favorite restaurant to get a free meal — companies have started offering freebie coupons and samples through their Facebook fan pages — notification services like Cities On The Cheap will send you discount codes for free video rentals and MP3 downloads — and nearly every food-oriented company out there, from Starbucks to IHOP to Ben And Jerry's has the occasional  promotional “try us for free day” — borrow books and movies from the library rather than buying them — plan “closet-swap” days where each of your friends cleans out unwanted outfits and you each “shop” through each other's piles — trade tools with a buddy or set up a co-op for the neighborhood — even renting certain types of equipment can be less expensive in the long-run than buying — if you don't have to own it and aren't going to use it all the time, find another way!)
  • sell or trade first (quite often, we buy new things to replace old things without getting rid of the old things first — Matt and I have developed a “one-in/one-out” rule — for example, if he's going to get a new video game, he has to trade in an old one at the same time — we do this with books, music, movies, and sports equipment — not only does it keep clutter away, but we can apply the trade credit toward the price of the new item — and if you can't find an establishment that will take your used items, consider a yard sale or posting it on Craigslist)

A Faster Way To Organize Your Finances

Did you know that the average American spends more time planning for his next vacation than his retirement? Most folks are more concerned with how much they're getting back in a tax refund than the money they're losing each month on late fees and account errors (it saddens and amuses me when someone who shells out hundreds of dollars a year in completely preventable interest payments and overage charges bitches about the IRS robbing him blind!) It's not that people don't care about day-to-day bookkeeping — they just let it pile up, then get overwhelmed looking at that stack of receipts and bank statements. But tackling your bookkeeping a bite at a time is a lot less painful than trying to swallow the entire month's finances at once.

  • lay all of your credit cards on a copier and make front / back reproductions to go in your fire safe
  • balance your checkbook (and that means down to the penny!)
  • move last year's bills and statements into archives from your active file system
  • clip coupons from the Sunday newspaper or search for coupons online
  • organize your coupons into categories in a portable coupon wallet
  • review the grocery circulars for the best bargains and plan your shopping list accordingly
  • pay your bills, either online or by mailing in a check
  • sign up for online banking to cut down the mail you receive
  • enroll in automatic bill-pay to avoid late fees
  • reconcile your credit card statement for the past month
  • review your bank statement for errors
  • set up an electronic bookkeeping system like Quicken or Quickbooks on your computer
  • download the last month's transactions into your bookkeeping system
  • download the last month's account statements and save them on your hard drive
  • input a week's worth of income and expenses in your bookkeeping system
  • call your service providers and vendors to change your billing date to a consistent time each month
  • make a list of the fees you pay on your current accounts, and mark the ones that can be eliminated
  • sort through your wallet and clean out your weekly receipts
  • sign up for “daily deal” websites like Groupon and Living Social
  • create a spreadsheet for keeping track of coupon and gift certificate expiration dates

See how easy that was? Wink