Tuesday, April 12, 2016

How to save money during a recession

Prices of everything have been going up at what seems to be an increasing rate in the last few months. Here are a few suggestions which may help you spend less and have a little more at the end of the month.

1. Analyse your current spending. Make a list of your spending for the month and make a pie chart in a spreadsheet (Excel). This can help you see where your major spending is and you can prioritise your spending.

2. Get the best plans you can for internet, cable TV, and phone. This logic is for any recurring service you use. This takes a little bit of research since what works for you may be completely different to what works for your neighbour. For the internet plan check out my post here. You may be able to downgrade your internet speeds given that some providers have upgraded all package speeds or even switch to another provider in your area.

You can make calls and send messages using data on your smartphone instead of minutes and SMS. Cell providers may have unlimited social plans you can take advantage of. Research any special that may be going on - Digicel has free minutes and SMS after a certain amount to other Digicel numbers.

Also consider watching less TV and spending less time on facebook/social media and concentrating on learning a new skill. This could allow you to downgrade your phone or internet plans.

3. Buy in bulk for the basic items you know you would always buy and that can be stored for a long period. This includes toilet paper, diapers, hand and bath soap, shampoo, cleaning/mopping solutions, insecticides, bulbs, canned foods etc. Liquids can be bought in larger containers such as gallon size instead of liters. Multi-packs of items are usually cheaper per item compared to buying them singly.
Some perishables can be frozen to keep them fresh longer.

4. Share. You may be able to borrow or lend tools tools, a ladder or an appliance if it will only be used once. One use may not justify buying equipment that would not be used enough to cover its cost.

4. Cut out the frills. You do not need to make purchases for bragging rights. Buy used, items of sufficient quality and only what you really need.
You may be putting premium gasoline when your car is able to run on super. To check this read your car's manual or ask the dealer.
Do you need to smoke as much or have as many beers? Your money may be going up in smoke or just pi**ed away. 
Do you really need all the cable TV movie channels? If you only look at a select few movie channels you should choose a smaller package. If you only use 100 minutes or 1GB of data a month you could downgrade you plan. Is there another provider that has a better plan you could switch to?
Consider going to a different store or restaurant that may have a similar or the same item for less. It should not matter where you bought clothes once the quality is what you want.
Consider buying an older model of something which may be at a lower price. Some car dealers offer a discount on the older model when a new one arrives with fancier lights or a new shape. If you shop around enough you can get a relatively young used vehicle for a good price. You can buy last year's model phone instead of this year's. I have a personal limit of $300USD for my cell phone.

Buy used video games. They are typically much cheaper and still work perfectly.

Cancel any club memberships that are not used or not critical. Estimate how much you save by having the membership versus being without it. At the same time research which ones may be more valuable and switch to them.

Make a list of grocery items before you go. This helps remove temptation for unnecessary things not on the list. Then at the grocery, when putting it into your cart, ask yourself if this is necessary or just a 'nice to have'.

5. Be child smart - do not let your children dictate what they must own. It may feel like you are denying your children by not giving them what they ask but spending quality time with them is more valuable than spending your money on them.

6. Reduce, reuse, recycle. You can keep your old frames when your glasses prescription changes. Car pool with people in your area.
Switch off lights and any devices when they are not in use. To be even more thrifty unplug devices (eg. chargers, TV's, microwaves, stereos) because they each use a tiny amount being in standby, waiting for you to wake them up.
Unplug your water pump when you are not at home. The lines lose pressure and the pump comes on to maintain the it even though no one is using water. You can also switch off your water heater tank when not home. It takes a few minutes for the water to get heated up so you can switch it on when you get home.
Switch to CFL bulbs, they cost more but do save a lot in the long run. Do not leave a fan or air conditioner on in a room without people and especially when leaving the house. Consider putting meshing over windows and leaving them open to allow cool air in and keeping insects out.
Do you really need a new electronic gadget? Can you connect your laptop to a TV instead of buying a smart TV? A non-smart TV or laptop that is a couple years old can be upgraded. Devices such as a Chromecast or Roku makes your regular TV smart. An older laptop can roar back to life with a solid state hard drive and more ram. Mend clothes instead of tossing it out.
You may not need a new smart phone if you can get a new battery for your current one. The battery degrades and loses storage capacity after a couple of years. If you do not have a data plan you do not need the latest smart phone. Check if your smartphone has the ability to disable data for apps you do not use. Only update apps on Wifi. 
There are many groups on facebook with ads for people selling second hand furniture, appliances and anything in between because they are upgrading or moving out. Keep an eye on them for a couple weeks before you get a brand new one.

Clean out your closets - your may be able to sell things you have not used in years. Advertise on a facebook group or classifieds or just a poster in the yard.

7. Get good health insurance. The most common health costs are for dental and vision. The company you work for may have a company plan which is usually cheaper than if you had the plan as an individual. Your spouse may be on a plan that covers you and your children. With a good health plan you can save thousands. The insurance company can cover a big part of your bill and you would pay a fraction. Bills are cheapest when using a dentist or eye care provider that is part of the insurance company's network. 
While approaching your employer ask about all the benefits you are eligible to. You may get allowances for exams, store discount cards, or even time off for certain things. I am surprised at the number of people who do not know what their own companies have to offer because the companies do not offer the information and employees do not ask. 

8. Do jobs yourself. Some people may not have the time to spare to do repairs or cooking but as with most things you pay for convenient services or faster times. Mending a button or loose thread is not difficult. It does not take very long to wash a car yourself.

Eating home cooked food is a huge saving compared to buying meals. You can spend over twice as much for a meal outside. Invite friend home for dinner instead of going to a restaurant.

Painting a room is not difficult. The internet could be very useful when troubleshooting issues with tools or appliances or to learn a new skill. You may figure out what is wrong with your dryer, stove, or computer by getting advice on your particular device or job.

9. Shop around. Do not assume the most advertised brand or company is the best. Speak to different providers for any service - insurance, repair men, painters, caterers etc. Do not be persuaded by a smooth talker when parting with your money. 
Ask for discounts, you may be surprised to find out you could get something off or a generous employee may share their discount with you. This may not work at groceries.

Try a test - When considering a purchase find what you want and then leave it alone for a month. If you still feel the need for it after the month then go ahead. This may not work if the item is unique or on sale and may be gone after the month.


10. Save more money. As hard as it is to have your money put away and not get anything in return, you must save some money for a rainy day. If you can save as much as 30% or more of your income do it while you can. We live in a very volatile society and you may need your savings to cushion you when you least expect it.

11. Get healthier. Drink more water. Not only is it much healthier than drinking soft drinks or alcoholic ones, you can have a big glass of water with your meal and this helps you feel full longer. Carry a refillable water bottle with you when going out to save on buying drinks.

Quit smoking. Cigarettes are expensive. The cost of all the packs add up at the end of the month. 

By exercising and eating properly you make yourself healthier. In the long run this means less doctor's and medicine bills. Even if you have amazing insurance they can be very costly.

Ensure you and the people your are around maintain proper hygiene. Wash your hands before eating or when returning home. This simple acts can keep many germs away from making you ill. If you are ill you need to spend money on doctor and medicine bills and you may have to miss work which may mean less salary. 
  
There are many free areas to exercise in. You can stay at home or use public fields and perform effective routines. Gym memberships could be costly.

12. Take care of your belongings. A vehicle is one of the most valuable possessions for most people. Take care of it otherwise repairs can add up. Do not worry about cosmetic problems like a small dent or scratch. Concentrate on ensuring the car is roadworthy. Check your car's health by following the recommended service intervals. You can change an air filter yourself. A bad filter can decrease your efficiency and make you burn more fuel than necessary. You air conditioning filter may also be an easy job depending on your car. 

Ensure you have the proper air pressure in your tyres. Too little or too much air can cause excess tyre wear and make your tyres die long before they are able to last. 

You may not be able to control the state of the roads but you can control your speed and behaviour on the road. Driving aggressively by accelerating quickly, taking corners sharply, braking suddenly etc is not only idiotic but ends up costing you more money and causes more strain on all parts of the vehicle.

Clean dust off your appliances. Look behind your dryer, air conditioners and refrigerator and clear any build up. Keep all fan blades as clean as possible, a little dust on them can drastically cut down the amount of air they push. Remove dust from between your laptop or desktop heat sink and the cooler fan. This requires opening up the devices but it is not difficult if you are careful. Heat buildup is bad for all electronics. A dry paintbrush can be used. 

Topics-
How to save money during recession
Cut back spending in Trinidad and Tobago


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