Money has always been the leading cause of stress in my life. There is not a day that goes by that I do not think about how much money I am making and how much money I am spending. Even a simple trip to the grocery store causes me stress. This is how I have always been. Recently, my Wife and myself have been on a mission to cut our costs down as much as possible. Over the last few years we have reduced some of our costs drastically.
One area in which we have reduced costs is with our bank and credit accounts. One way which we drastically cut costs was paying off our credit cards and not carrying a balance going forward. We were doing well with our credit cards, until we decided to get a joint credit card and use that instead of our individual cards. For some reason with our cards joint, we found it was harder to keep track of our spending. It was hard to account for what the other person was spending, unless we talked about everything we charged to the credit card, which was not always the case. Now, when we charge something to the credit cards, we let each other know and have found we have always been able to pay out balance off in full every month. By not carrying a balance on our credit cards we do not have to pay the monthly interest. What we learned overtime is that when you carry a balance on your credit card you tend to pay more in interest up front than you do on principle. How we resolved the situation is to pay the minimum payment and save up until we had enough to pay the cards off completely. If we ever needed to charge a large purchase to the credit cards and we didn’t have enough in savings to pay it off we would then transfer money from our line of credit temporarily. Our line of credit has a much lower rate than our credit cards so we would pay far less interest.
Another way we saved money is with our bank accounts. We were given a free chequing and savings account for a year with our bank when we signed our mortgage with them. After the year was up we never took the time to review what type of account we had, and did not pay attention to the banking fees we were incurring. Once we looked, we realized we were paying 5 times the amount in banking fees than what we could have been paying! We went to the bank and changed our accounts to something better suited for our needs and we ended up saving $200 a year! Our bank even reversed the fees we had already paid.
We also save money on our mortgage by making weekly payments. While we do not see any savings right away, in doing so we are paying thousands of dollars less in interest over the life of our mortgage because the weekly payments allow us to pay our mortgage off 1 year sooner.
We also reduced cost on our cell phones. We chose to buy our phones outright instead of signing a contract and having the new phones as part of that contract. A lot of the times when you sign a contract and get a phone for a reduced price or “free”, in the long run you are paying more for the phone and the plan than if you were to purchase them separately. It depends on the deal of the plan, but we have found this is usually the case. By purchasing our phones outright and choosing a plan without a contract as they are usually lower in price, we save money over the long run.
An added benefit to having your own phone is that you can switch providers whenever you find a better deal. We used to pay $160 a month for two phone plans and now pay $100 a month for both. As an example, we were originally with Rogers for years, however, we switched to Virgin to get more data at a lower rate. Currently we just switched providers again and now we doubled our data and lowered the cost by switching to Freedom Mobile. We also just learned that soon Freedom Mobile users may get additional savings because Shaw Telecommunication bought out Freedom Mobile. Bundling services may be available in the future. Fingers Crossed!
Another way we have saved money is when shopping for groceries we always tried to stick to a list. So many times, my Wife and I have gone in for a few items and come out with a cart full! By having a list we are less tempted to buy on a whim or let our cravings guide us through the grocery isles!
It also helps when you shop at places that have reward programs. Collecting points and using them on necessities and not luxury goods will help you save money in the long run. A lot of apps exist that can help you save money as well. You must seek them out for where you live and some larger companies sponsor these apps to draw customers in. We shop at several stores that offer reward and loyalty points. We also use apps to collect rebates on our groceries if they qualify.
We also saved money grocery shopping for our pets by switching to the Costco brand dog food. We had two dogs at the time, a Rottweiler and a Lab Pitbull cross, and man do they eat! We used to buy premium dog food at a pet store and were easily spending $150+ a month. We had heard great things about the Costco brand dog food and looked at the nutritional information compared to our premium brand. The nutritional information was almost identical, as were the ingredients.
When it comes to insurance, you really need to shop around. When I was 16 and living with my parents I never really understood how expensive my insurance was. I had a part time job and every month I had no problems making enough to pay for insurance. I have had many different insurance providers and so far, the best rate we have gotten is through Inova Insurance Brokerage. This is Costco’s insurance carrier and members get significant savings. By switching our insurance carriers, we saved $1500. Most of the others Insurance carriers use a suggested cost schedule which factors in your age and driving history. Another way to save money is to bundle your insurances together. Usually if you bundle your cars, home, life, motorcycle, etc. you get discounts. We also pay our insurance as a yearly lump sum instead of monthly payments. Many insurance carriers offer a discount for paying all at once. In our case, we save 10%.
We also sold both our vehicles to purchase vehicles that were not as expensive and better suited our needs. I have purchased my vehicle out right to free up our monthly cash flow. In the event, I had lost my job I have the option to drop the insurance to as little as fire and theft, until the time I got a new job and I start needing to drive full time. By having this vehicle paid in full I also have no lien or loan on the vehicle which lowers my insurance premium. If you want to know my personal struggles when it comes to vehicles see the following site here. My Wife sold her Jeep Wrangler and purchased a Jeep Cherokee. Her Cherokee did not cost as much to purchase as her Wrangler, is cheaper to insure and gets better gas mileage. The Cherokee is also better suited for our needs.
Cable, Internet and Home Phone
Another way to we reduced our monthly spending is to cancel services that are not needed. We decided to cancel our cable and home phone. We never used our home phone as we use our cell phone instead. Many people we talk to never use their home phone either or just do not have one. I would not be the least bit surprised if home phones became a thing of the past! Cable television can be a very large expense in household budgets. For us the cable bill monthly was $100, and this was not even for the premium channels! Thanks Shaw! We ended up keeping our internet and use services such as Netflix to replace our cable. If there is a show on cable television we are dying to see, many of our family and friends are happy to let us into their homes to watch with them!
Restaurants and Fast Food
One of our biggest expenses is eating out. Some months we are so bad we eat out several times a week! This habit can add up to a couple hundred dollars a month without you even noticing! We still struggle with this occasionally, but we have gotten much better and planning our meals for the week. We are the most successful when we plan meals that are easy to prepare and are not overly complicated.
Babies are expensive! Some expenses are unavoidable, but we have managed to save some money when it comes to diapers, formula and baby food. To save money on diapers, we use cloth diapers. I have written a separate post about our cloth diaper experience that you can view here. We have been exclusively formula feeding Parker since he was a month old. My Wife and Parker experienced problems breastfeeding so we had to switch to formula. This was not an expense we were anticipating, as we had just assumed breastfeeding would not be a problem. We quickly found out that formula can be expensive! At first, we were using ready-made liquid formula but made the switch to powdered formula once we realized how much money we could be saving. We also switched from a brand name formula to the Costco brand formula. Our Doctor told us that baby formulas are all pretty much the exact same, except some contain added DHA and Omegas and others do not. The Costco brand we buy does have the added vitamins and is significantly less expensive per serving than a brand name formula. We also save money by making our own baby food. Jars of baby puree can cost anywhere between $0.50 to $2.00 a jar. For the same price, my Wife can make several batches of purees herself. Not everyone has time to make baby food, but if you do it is a great way to save some money.
As you can see, with some planning and effort there are many ways you can save some money on everyday costs.
What efforts have you taken to save money on day to day expenses? Let us know in the comments below!