Eight Ways to Save Money Even on a Tight Budget

Not too long ago, my husband and I had a combined income of nearly $60,000 a year. In some parts of the country, that’s not much, but in Southern Illinois that made us solidly middle class. Then, we decided that we hated the things we were doing and that my husband would be going back to finish his college degree. That cut our income by more than half immediately.
And now, we find that we are living better and happier on $25,000 a year than we ever did on twice that. The reason is that we learned to decide when to splurge and when to save. When we made more, like many people, we had more money than sense, spending on whatever caught our eye. Now, we think about our purchases and discuss them. Here are eight tips we learned to saving money of a tight budget:

1) Do your grocery shopping more often. For us, this was a key. We had developed a tendency to go shopping once every two weeks and get enough food to last. The problem was, it didn’t cut down on those little runs to the store for bread and milk and the half dozen things we forgot in between. And, we rarely stuck to the menu plans we had made. By the end of our shopping period, we were more likely to go out to eat than to cook at home (a HUGE expense) and many things, like fresh fruits and vegetables were rotting before we got around to using them.

This goes hand-in-hand with the idea that bigger is not always better. It’s a very good idea to look at and be aware of the unit price when comparing and deciding what size item to buy. But a 10-pound bag of potatoes that saves you a nickel a pound over a five-pound bag isn’t really a savings if you end up throwing out five pounds of rotten, mushy potatoes.
For us, it was okay to buy larger sizes of dry goods and things that are unlikely to go bad, but especially for fresh fruits and vegetables, buying smaller amounts every week is much more economical. And, it means if I suddenly don’t want anything I have in the house, I’m headed to the grocery store anyway and am much more likely to buy something to cook at home, rather than say, “Sweetheart, let’s go out to eat.”

2) Decide before you buy it how often you are going to use something and let that determine if you are going to actually want to own it. For a long time, we bought videos and compact discs because they were available and we wanted to hear or see them. Not anymore. Now, we determine before we buy a movie how likely we are to want to see it repeatedly.

Again, this goes hand-in-hand with a lesson learned the hard way. Once, we read that cutting the premium channels out of your cable service is a great way to save money. And, for some people, I’m sure that it is. But we watch movies, much more than network television, and we often watch things we enjoy again and again. We tried cutting our cable service back for a few months and discovered that what we spent on renting movies was almost double what we would have paid for our cable service. We also spent more by driving to the video store instead of having ready access on our television.

So the key to this point is being realistic with yourself and knowing whether you will use it or not. We buy fewer movies now, usually buying ones we have already seen and know that we are going to want to see them again. And, we keep the premium cable channels for the movies that aren’t worth owning, but make good background noise while we are studying or writing or whatever else.

And we almost never buy new cds anymore. So many people have ipods and other computer-based MP3 systems that we have found when we really want a new cd, we can usually pick it up at the used music store within a few weeks of its release date. And, there are so many legal ways to download music now, it is much less expensive to buy just the music we want instead of paying $18 for a new cd. The savings of not buying just one cd a month is almost $200 a year!

3) Insulate your home/apartment. Again, learned from mistakes. I live in a beautiful 120-year-old two-story wood frame home that has been converted into two apartments. Unfortunately, it is a bit drafty in the winter and last December, the upstairs neighbors left for a month and turned their heat way down while they were gone. I’m sure this saved them a bundle. But as heat rises, you can imagine what happened with my heating bill in December. It, and all my heat, went through the roof. After getting hit with a bill that was double what it had been the previous year, we decided we had to do something about it. The do-it-yourself plastic window covers cost us about $25 and a day’s work to install. We got rugs to put against the exterior doors to prevent under-door heat escaping . And, we turned the thermostat down two degrees. That means I often have a blanket across my feet when I’m just sitting around, but the savings were enormous. It’s a bit difficult to quantify exactly because the neighbors were back in January and actually used their heat, but we estimate the little changes and day’s work saved us about $75 a month for the remainder of the winter.

4) Recycle. I don’t mean just by taking glass and plastics and newspapers to the local recycling center. I mean buying recycled…recycled paper products, recycled cds and dvds as discussed earlier, and even recycled cars. A new car looses up to 25 percent or more of its value as soon as you drive it off the lot, so why buy new? Some people need or want the prestige of a new car, and I must say that I bought new once, because I wanted the 100,000 mile warranty, but not car dealers are offering extended warranties on used cars as well. A $1,000 clunker from the neighborhood might not be a good investment, but a reconditioned, low-mileage used car with an extended warranty can save you thousands.

Buying everything from clothing to toys to music and books via amazon and ebay have also save me hundreds. We have even bought my husbands used textbooks on-line and saved cash. The key to making this savings work is being very aware of shipping costs.

Paying $3 for a $20 item isn’t a great savings if you then pay $15 in shipping and handling charges. Buying clothing this way is also a gamble because you can’t try it on and sometimes, no matter how good the picture, the item just doesn’t look the same when you get it home. Still, I have made some stellar clothing purchases on ebay, including a little black dress that I hope to never part with.

These sites can also help you save money by recycling your old things. We have found that toys, movies, and books that we’ve grown tired of can make someone else very happy and often draw a better price online than they would at a yard sale. Just be aware of the costs of selling as well, including ebay fees and the costs of packaging and make sure to take that into account in the selling price. As a final option, save yourself tax money by donating old items to charity. If you itemize your tax deductions, you can deduct charitable donations of up to $500 without any effort at all. And these days, charities need just about everything from your used computer to your used car.

5) Pay attention to how and why you shop. And look for alternatives. We discovered that buying Christmas presents at Christmas time was expensive and hurt our budget immensely. So, we began buying presents at after Christmas sales, summer clearance sales and pretty much all year long. We have a list of people that we are always going to buy presents for and we try to keep track of it…a note in a wallet or just a mental list.

Then, when we are out shopping we keep in mind what those people like and look for items they will want at a good price. Items are kept in a box and then can be used later in the year for Christmas or birthday presents. This usually means I have a gift readily available if I forget a birthday until the last minute and the savings are tremendous. Last year, I bought a book for a friend who loves all things Neil Gaiman for $4 at a clearance sale. I knew she didn’t have it yet and it was regularly $25….savings to me $21 and my friend still gets a present she will love.

I find that when I have to run out and get a gift at the last minute, I spend at least $20 on something that the person may or may not love and then another $7-8 for wrapping paper or a gift bag and ribbon and such. By planning ahead, I can buy gift bags and gift wrap at end of season clearance sales and the savings just keep adding up.

6) Know when to buy name brands. People telling me how to save money always want to tell me to buy store brands and on some things, they are absolutely right. I can’t tell the difference. But on some things, it’s worth the extra money to buy the brand name. Macaroni and cheese, ketchup and American cheese all seem to taste better when I spend the extra 25 cents to buy a name brand. Mashed potatoes, on the other hand, I prefer the generic brand. Unfortunately, these lessons cannot be learned without trying the generic brands, so start small. Buy a smaller package of a new brand and try it. Then buy what tastes right. Too often, we buy things thinking we should eat them or that we will save money by buying cheaper. If you just throw it out, there is no savings.

7) Pay at the pump. When you get gas, whenever possible pay with a debit card at the pump. This eliminates the temptation to squander money uselessly on lottery tickets, a snack or a drink that are way over priced at most convenience stores. If your getting gas, save money by just getting the gas and nothing else.

8) Make a jar for your spare change and throw it in there. We empty our pockets each night before bed and throw the change in a bowl set on the nightstand for this purpose. Some people go even further and never actually spend change, preferring to break a dollar whenever they buy something. We don’t go that far. If change is in your pocket, it’s okay to spend it, but at the end of the day, save it. Last year, we saved about $200 doing this.

These little things have saved us thousands in the last two years, enough that my husband has been able to finish his degree (almost. He’ll be done in December) and that last year, we took our first real vacation in a decade. Set a goal for yourself and think about your own lifestyle and decide what you can give up to save big. Most of the time, after you get used to it, you don’t even notice the work.

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