Saving Money in 2013

SAVING MONEY IN 2013

Let’s face it, if you live in the USA, things are not looking good economically according to the current political climate.  The current Presidential administration wants one thing, the Congress wants another.  Both sides say they want to work together, but its not happening, no matter who you believe, who want to believe, or what you want to believe.  So let’s say we go off this “Fiscal Cliff” in 25 days, we will have to cut back on lifestyle yet again.  But it does not have to be so painful.  While I already started to realize much of this a month ago, I was further inspired today and reassured that my thinking was correct after reading this online article:

http://www.gobankingrates.com/breaking-up-with-debt/dave-ramsey-baby-step-saving-money-1000-rainy-day-fund#.UMAo73_nYEA.twitter

So here are the steps I took, because I believe in all these steps above and realized that long ago.  The most simple is the health club thing.  Who needs it? Unless you are going there to look at attractive bodies and/or find a date, you can just as easily cut out one soda a day and walk an extra mile to loose the same amount of weight during one hour in the gym and not pay $50/month for it.  Better yet, go to a park and walk and jog and you will see just as many people doing the same for free.  I don’t think Jack LaLane ever belonged to any gym?  Its a lifestyle choice, not a membership fee.

1) EXAMINE ALL YOUR BILLS: I was shocked to see my Verizon FiOS bill go from $110 to $130 after the promotion period and its now up to $170. $35 of it alone is for a home phone “land line” which I never use.  I have not used a fax in years and when I had the regular Verizon service, the phone was only about $12/month.  I swore always to keep a “landline” after September 11, 2001 because it was the only thing working in this area (Metro NYC).  Now, I understand that 2 of the 3 major cellular carriers were on top of the World Trade Centers that got destroyed, so I vowed to keep my landline should this be a trend (and I am glad it has NOT been such a major re-occurance).  Now, I have  FiOS but just went through Hurricane Sandy, the worst hurricane to hit this area in over 100 years.  FiOS ONLY works with electricity, so, I had no phone even though it was a land line.  Not to mention no TV or internet.  Do I get a credit for 1 week without service? No, of course not, that was the electric company’s fault they claim.  But one thing was obvious to me, I no longer need a land line phone number.  I have a smart phone that works in a wi-fi area, and I have an iPad where I can place Skype calls from with a Verizon Wireless service that costs me $20/month.  I also realized I can “share” that bandwith internet cost with my Verizon iPhone because I was only using .5gb/month while paying for a 2gb plan — $35 eliminated and saved on landline, $10 on mobile phone, working on eliminating the $20 from the iPad all together, I just didn’t have an 45 mins on hold to kill that day.  Even if I go over, its still cheaper than paying for another full gigabyte per month.

2)  COFFEE:  I am not one of these people that need it, but I like it and sometimes really want it.  I know I can get it for $2, but I can get just as good of coffee (or better) from my local supermarkets that charge between .93 cents and $1.  And this is not from a coffee maker, but a genuine professional model industrial grade machine using the most expensive brands of coffee (like Lavazza for my espresso).  What’s the difference?  No one is pouring it for me and there is no tip jar to guilt me into tipping someone to pour it into a cup.  I am not cheap, and I tip waitresses 20%, but people who sit behind a counter and hand you something are not entitled to the same amount as a waiter or waitress in a diner.  Assuming I buy 25 cups of coffee per month at $2, now I get it for $1/per cup if I serve myself and only pay $25/month. Why not buy a coffee maker?  Well, for me, a good one is $50, or actually $100+ because I love espresso. If I buy the coffee ground at $5-10 can or the beans and have to grind them myself, then its much more expensive, It will take me months to justify making it at home.  Its a luxury, and I prefer to spend these next 6 months saving money, and if I make it through the winter maybe I will buy a coffee/espresso maker.  But at this point, its only an investment for the long haul.

3) PAYING CASH FOR GAS:  Sure, its only .10cents per gallon if you pay cash, and maybe thats only $3 per fillup, but at the end of the month thats $12-15 in your pocket.

4) BANKS & ATM FEES: My bank gave me free checking, savings and debit card because they held my mortgage.  Then, the genius’ at Wells-Fargo decided that owning my house was not enough, so they eliminated the “all inclusive plan” and started charging me $15/month for my SAVINGS account.  Why? Because I did not use their debit card to pay my bills.  Yes, when their debit card is used, they get a transaction fee.  I never heard of a savings account that costs me $15/month, but they made one.  So, now I am just down to a debit card on my checking account. Its free, unless they change that soon, and they might.  Additionally, if your bank charges you $2 to use other ATMs, time to find a bank that has a LOT of ATMs along all the roads you travel, or just select another bank or carry cash.  Here is another example, my small town bank is independent of big banks in the fact they don’t take bailouts from the government but are still FDIC insured.  I keep $1,000 in there because I know its not easily accessible and its money I know will stay there and not subject to asinine charges.  However, on $1,000 it only earns me pennies (literally) per month… I think I earned $.18 cents last month.  So, why don’t I just take that money and put it into my main bank where if I keep a minimum $1500 balance I am not charged $15/month?  Again, we are talking about another $20/month savings here.

5)  HEALTH INSURANCE: A little research goes a long way.  A monthly healthcare plan with prescriptions may cost you $50 more per month, however, if those prescriptions are only $40/month if you pay “full price) you are still saving $10/month.  Ask your pharmacist how much your medicine costs each month if you do NOT have prescriptions included.  You will be surprised that most of the time, the medicine is cheaper than the copay to the insurance company.

Depending on what your plans/rates are, you can save yourself $100-150/month just by cutting out things these companies say you need that you don’t really need.  I don’t need Premium TV Service in Super Duper HD when I am only watching  5 stations.  I don’t need a landline when I have 2 other mobile plans and a wireless iPad.  I don’t need a $2-3 cup of coffee from Starbucks when its just as good from the small market or supermarket next door.  I don’t need to keep a $1,500 minimal balance in a bank in order to avoid a $15/month fee.  What I should do, and if the theme is not crystal clear here, I should CARRY CASH so I don’t have to use a bank ATM fee.  Keep a credit card for emergencies, sure, but DO NOT use it to buy necessities on a regular basis.  Sure, carrying large amounts of cash is not a good idea in cases like high theft/robbery areas, or if you are in a habit of losing your wallet often.  Otherwise, $100 in your wallet at all times allow you to avoid ATM fees, higher gasoline fees, not be dependent on debit cards and your groceries are not put on a credit card that might cost 15-25% interest per month.

The truth is, credit cards were once great for building and establishing credit and to protect you from fraud should it be stolen, cloned or hacked.  The fact is, that rarely happens and when you use cash you risk no identity theft.  Another example:  Once I was charged for $300 in shoes and pocketbooks in a Queens Department store while I was in a different state.  Sure, the charges were reversed, but it took several months of disputes to get them to recognize that and they tried to charge me late fees when I would not pay the full amount even though that amount was in dispute (Thank you American Express).  Another time, a hotel clerk in Brazil “accidentally” charged me twice for 1 night hotel stay because he thought the exchange rate was half that of the dollar, when in fact the dollar was worth double.  Though there were 2 charges, the hotel manager, who was the only one able to void the charge was out to lunch, and the 2nd transaction was not voided.  I produced evidence to the credit card company, they refunded my money, but then re-charged me when the hotel later came up with two receipts.  Like a dog chasing its tail, I had to explain that the 2nd charge was an employee error and I even have a witness and hand written bill stating such, but somehow, I am still fighting this $125 charge 6 months after my stay in a “5-star” hotel.  How was I protected by using a credit card?

My advice is to rely more on cash and less on banks.  If you are buying gas or food, its hard to get ripped off like I did at the hotel.  If you are buying online and the goods never come or if the credit card number is used for fraudulent activity in another state such as identity theft, consider using the credit card, but also consider using cash locally to buy those very same things.  The merchant benefits because they are not paying 5% to the credit card company for the transaction.  You benefit because you are saving money and/or not subject to high interest fees.  Also, when you pay cash, there is a very profound realization there that you are spending $100 of your hard earned cash, and when you lay down $100 its painful.  When you hand over a debit card or credit card its virtually painless.  No Pain, No Gain.  Use cash, you will think twice about that double mocha frappa latte with caramel dark roast supreme special edition “for a limited time” and go to Dunkin Donuts for a $2 cup of coffee from change in your pocket and your pants and waistline will also thank you.  The all you can eat Chinese buffet sounds great too for $15, but I am willing to bet if you buy your food for lunch from a place that sells buffet food by the pound, not only will you consume less (for your stomach) but also pay less.  Its really a no-brainer.  It just takes some self control and a reality check. Let’s face it, when was the last time you went to a Chinese restaurant and ordered $15 of food and walked out with an empty stomach? You walked out with a doggie bag and leftovers too, didn’t you?  What makes you think that going for the $15 all you can eat lunch special is going to benefit you? No leftovers, same price, you are still full, but you could have spent half that if you just got the lunch special down the street WITH leftovers.

The world and the economy won’t change soon, but if you do your homework, your world can change very fast in just a few months — $1,000 here, there, and by the end of the year, you have that much-needed vacation you were needing all year and if not, you can pay cash for that new set of tires or muffler and not be paying 25% on a credit card.

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