Ways to Save Money & Live Frugally

My house has electric heat and my last bill was $30.

 

Hmm, but how cold does it get, and what's your rate?
We're pretty frugal with electricity without suffering, and ours is still close to $70 using about 350kwh/ month. Average use around here is about 1,000/month. I guess we're helping to keep the average down.

 

i didnt say affordable, i said efficient...

 

If you are making that electricity with a coal, gas or oil generator it's more like 30%, or about as efficient as a gasoline engine in a car.

 

And probably 100x more than the xost of wood

 

But you didnt tuen it on and burned wood!! Haha.

I have all electric heat. Heat pump. My last bill was $160ish dollars and havent turned the heat on once this year. No AC or heat since probably early september

 

If i was making electricity...I'd probably be heating with steam...

 

I'm an hour north of Seattle, so it's a mild climate. I keep my thermostat at 60 and the heat rarely kicks on. It also helps that I'm single.

 

Just about everything has been covered here with the exception of paying off current debt. I thought I had posted something regarding this on this site at one point. Part of being frugal for me is getting out of debt in a timely manner. In doing that, I am using the Snowball payment method (Dave Ramsey). There are two variations of this method. I am going to talk about smallest to largest amount of debt. The other method is highest interest to lowest interest. Both have their merits, and a simple spreadsheet would help you to determine which would work better for your individual situation.

If you have debt to payoff, this is how it works:

Example:

• Credit Card 1 - $600 minimum payment $20
• Auto Loan - $4000 - minimum payment $200
• Credit Card 2 - $6000 - minimum payment $350
• Home Equity - $35000 - minimum payment $550
• Total Owed: $45,600
• Monthly Payments - $1120
• Extra payment ability - $50

Plan:

• List out each of your debts smallest to largest with minimum monthly payment for each one.
• Total up that amount.
• You'll need to have established a budget to know how much extra you have to put against your debt.

Payment Plans:

• Pay Credit Card 1 $70 per month until paid off.
• All others debts are paid the minimum payment.
• Once Paid off, that $70 will the be applied to the Auto Loans Payment to make the payment $270 per month.
• Once the auto loan payment is paid off, the $270 would then be applied to the $350 for Credit Card 2 to make the payment $620 per month.
• Once the auto loan is paid off, the $620 is added to the home equity payment of $550 to make that payment $1170 per month.

Another tip for loans is that I split the payments in two and pay half each time I get paid. Each time you pay, you are lowering the principle. This helps reduce the overall interest you pay for the loan. Not a ton, but it's better than paying monthly. ***WARNING THIS DOES NOT WORK FOR MORTGAGES. THE BANKS DO NOT ALLOW PAYMENTS TO COME IN PARTIALLY. IF THEY DO, THEY MIGHT APPPLY YOUR PAYMENT AS AN EXTRA PAYMENT. THE OTHER OPTION IS THAT THEY HOLD THE FIRST HALF UNTIL THE SECOND HALF IS RECEIVED AND THEN APPLY THE PAYMENT.*****

 

The best plan is to avoid debt in the first place. The biggest financial mistake I see people make is buying vehicles that are way too expensive for their income...financed of course. 20, 30 or 40+ thousand dollars is a financial boat anchor for most middle income earners when a $3500 used sedan would meet their needs.
Lenders are not your friends. Interest deductions are a scam. People in the mortgage business want you to believe that paying them $100 in interest to save $20 on your taxes is a benefit. I paid my house off as fast as I could. So far, I don't miss having a mortgage payment.

 

While doing research before buying my new car a couple of weeks ago, I ran into a calculator for how much car you can afford. Not what I was looking for at all since I know that I could afford a nice new BMW if I really wanted to. What I was looking for was a payment calculator so I could play with numbers and see what happens (down payment, interest rates etc). I just need something to get me to and from reliably, and is a good value. I originally was looking at used vehicles in a certain price range and age but when I ran into a deal for brand new for just over what my budget was, I was able to comfortably raise my budget because it gave me the best value as far as I was concerned; driving 100 miles a day gives one different priorities than if I worked in town and only drove a couple miles a day. In this case raising my budget just a little gave me an extra 2-3 years of warrantee over used.

But in no case am I stretching to make the payment and it isn't nearly in the category of what I could afford.

 

We recently switched to dreamings Netflix vs DirecTV. When I called to cancel DirecTV, they said they would letlo my bill for a year, from $80 to$29!!!! Long story short, I told them to get bent, to little to late after 5 years of calling every 2 months to lower my bill. Not were at $80 a month for internet and $10 for Netflix, and we'll by dropping out cell bill because we won't need the unlimited data anymore. Needed the internet for my business anyways so some of that will be wrote off.

Moral is, call your providers throughout the year and all for discounts. Tell them your thinking of dropping them, and if they don't do anything call a couple weeks later and tell them your done!

 

Spectrum cable is just about done giving me those discounts.....time to cut it!

 

That's what I do - use a credit card for the points and pay off each month. Even put my car down payment on it (dealerships will take up to $5k on cc - I do this for every vehicle).

Sometimes using credit for buying cars is actually cheaper than paying cash. I got $1,000 credit for taking out a loan - would have had that $1k added back to the price of the car if I paid cash. Of course the caviout is that you use the brand finance so it is a higher interest rate. However, after 3 months you can refinance at a lower rate at your bank (or pay off). But, you have to be dedicated and not let it slide, or you will eventually eat up that credit.

 

I reshop insurance every couple of years. I did that yesterday for my cars, and got the same coverage at the same insurer (Progressive) for $200/year less. I once did this for my Dad, and lowered his house/car bundle cost by over $1000/ year! Again, same insurer (GEICO), in his case it was better coverage for less after reshopping.

Insurers are not your friends, they punish loyalty by raising prices. The only way to beat that is to show that you are willing to move insurers, and you will get the lower cost.

Also, I always pay in full rather than monthly payments on insurance. This saves about $150/year for me.

 

Yeah, I saved by having my insurance re-looked at recently. I had been paying $740 a year for full coverage on my Explorer and liability insurance on the old Focus. My yearly rate went down when I went to full coverage for the Explorer and new car and changed companies. I also pay for a year at a time for my vehicles, bike and home.

Oh, and although sometimes bundling home with car insurance can save you $$, I split mine off a couple of years ago to get the best total premium.