Maximize Your Savings
Hi everyone! Cait stopping by really quick. This is another guest blog post written by my better half, Chuck. His post last month on how we saved $2,000 with just a few easy swaps was really well received, and he couldn't wait to write another. This month's theme is on money anyway, so it works really well. So, without further ado -- some more tips for hiding money away for a rainy day.
Last month, I wrote about how Caitlin and I have been able to cut back our expenses by decreasing our grocery bill, bringing lunch to work, and making our own coffee. By doing these three things we have cut back our yearly spending by roughly $2,000. If you haven't yet, read about that here. Those three things require no additional money, but they do require some extra time to be budgeted each week. This month, I am presenting more money saving tips as well as tips for general financial health that I have applied in my own life. Some of these tips will require some extra money left over each month after normal spending.
I love going out to dinner. A good restaurant is a beautiful thing, especially when the chefs and wait staff work in tandem to create a memorable dining experience. I've worked in fine dining and I love it. One of our favorite things to do as a couple is to go to a nice restaurant. Luckily, or unluckily, we live in a veritable restaurant desert, which makes saving money in this category quite easy for us. It's good to keep in mind that restaurants are also very expensive when you consider the food you are getting. It would be much cheaper to make the same meal at home. You’re paying for the labor, not so much for the food. Make dining out special and infrequent. Make of list of restaurants you would like to try. Go to one every month for a special treat. This is an easy category to cut back in if you dine out often.
Entertainment is an essential part of a good social life. My first and best recommendation would be to buy a few good party games and have friends over instead of going out. My personal favorites are Secret Hitler (by the creators of Cards Against Humanity), Utter Nonsense, which requires you to say absurd phrases in front of your friends in various accents, and if you want to spend your weekends creating happy little trees and charming cabins with your favorite television painter (who doesn’t?), I recommend Bob Ross: The Art of Chill as the superior game for a laid-back party night.
We are cord cutters. Get a subscription to Ncrdsetflix, Prime Video, or Hulu, or all three. It will be cheaper than a monthly cable bill and you don’t have to wait for your shows to come on. Pro tip: buy your friend or family member a bottle of wine or a case of beer in exchange for their Netflix password. We're still using Caitlin's sister's Netflix...but buy our own Amazon Prime.
Lastly, I’d like to discuss my quick tips for those who have some extra cash left over at the end of the month or money already saved up. I have five tips for anyone who is trying save extra cash, and have a little kicking around between paychecks.
1. Pay off your car insurance at the beginning of the term, which is usually six months, instead of month by month. Your insurance company will often give you a 15-20% discount. This can be close to one hundred dollars saved depending on your rates.
2. If your workplace has dollar for dollar matching on a retirement plan, take advantage of this. It is free money, and most workplace retirement plans are pre-tax, which means you lower your taxable income by contributing money into them. Max out your employer match dollars before contributing to an IRA account.
3. Take advantage of the programmable thermostat that is most likely in your place of living. If you don't have one, install one! You don't need an expensive one. There are some available for around $50 on Amazon. There is no reason to keep the house at your preferred comfort temperature if you aren’t home. Set the program to decrease the heat by three or four degrees during the normal hours you are not home during the week. You can always increase the temp if you have a day off. The inverse of this trick works for the warmer months when the air conditioning is used.
4. Pay yourself before you pay for anything else. What I mean by this is setting money aside for savings should be a high priority, within reason. Obviously, the bills have to be paid first. Consider putting money away for a future date if you have money left over after normal monthly spending. I set up an automatic transfer into my savings on every payday. I never use the money for normal expenses or entertainment, and I don’t need it for these expenses. If I kept the money in my spending/checking account I would be tempted to spend it.
5. Let’s piggyback off of putting money away into savings and talk about savings accounts. If you have a savings account with a big bank like Wells Fargo or Bank of America, consider opening an online high-yield savings account to store your money in. The big banks pay interest at around 0.03%. That’s virtually nothing. American Express and Synchrony Bank have savings accounts that pay 1.45% and 1.5% respectively.
The reason why a higher interest rate should be considered for your savings is not only free money, but also the fact that our money loses value over time through inflation. The typical inflation rate is roughly two percent a year. The high-yield savings account won’t keep up with inflation, but its pretty close. Higher yield products such as Certificates of Deposit and Bonds have investment periods of varying lengths associated with them, which means you cannot take your money out without incurring a financial penalty. The money is a high-yield savings account is fully liquid, meaning you can pull money out whenever you need it without any penalties.
Using these tips, you're setting yourself up for a healthy financial future and won't need to worry as much about a rainy day.
Also, thanks for reading this far. If you've made it this far down, here's a reward photo of our precious puppy! Her collar is from a brand called PetTastic. You should check out their crazy cute collars. They're also great quality and cheaper than the ones from Target!