Question: How Are You Saving Money?
Best Idea Wins Some Gear
UPDATE: The best idea will receive a Bosca Black Nappa Leather Card Case ($60). A much better way to carry those business cards of yours, just don’t go all American Psycho on us.
It’s no secret that people are paring down the buying and ratcheting up the saving. Luxury and egregious consumerism are fast becoming taboo, if not already. Suddenly, it’s the wise shopper’s time to shine.
But it’s about more than just spending less… it’s about saving more. Until recently, American’s (on average) saved an appalling 0% of their income. That figure has climbed to 3% during the recent downturn, yet still looks paltry compared to European’s who save 15% or the Japanese who save a wallet-numbing 30%. So, here’s Gear Patrol’s question to you: How are you saving money in this economy?
No matter how trivial or insane, we want to know how you’re stowing the cash. Bank savings? Bonds? Gold bullion? No more iPods? Piggy banks? Let us and other GP readers know in the comments below. We’ll choose the best recommendation for an upcoming article.
Oh, not that it really matters, but the best comment will get a random pick out of our gear review closet (chock full of some pretty awesome stuff). You know, to help you save more money.
We were fortunate this year that our tax return finally enabled us to get rid of the last bit of credit card debt, which in turn gives us more room every month. We utilize a money market account and *try* to save 10% each month until we have a minimum of 6 months living expenses. We have also put back some other discretionary funds, which we are using to buy in to the market right now while prices are possibly at a lifetime low.
I got rid of the DVR, digital cable, and netflix. Using Hulu and borrowing DVD’s from friends a lot more. With my wife in Grad School our spending was pretty streamlined to begin with, but we’re still having our ING savings account make an auto draft from checking each month to get some savings. I bring leftovers for lunch 95% of the time, which can net a big savings if you add up the cost of lunches eaten out.
To save money, I have opted to skip going to bars and instead have gatherings at my house, where there is no quitting time and the “patrons” generally add to the alcohol cache. I have saved a considerable amount of money (Approx. $200 a month, which in turn has gone to paying off credit card debt) and with 5 couches I can accommodate those who may have imbibed a little too much. Everyone wins
The reality is, you can never save yourself into wealth.
Yes, cutting spending is all the rage right now. And yes, some of that attitude is necessary. The fact is however, that for individuals and for the country, being optimistic and seizing opportunity is incredibly important.
Morton Lund, founder of Skype and 80 other startups, might have said it best:
“The downturn is amazing for entrepreneurs. The chances are bigger now than ever - All the pricks went back to their safe jobs! Entrepreneurs have now.”
Look at it this way. You can spend an hour clipping coupons, or you can spend that time taking action and writing a business plan for that startup idea that’s been bouncing around in your head for two years.
Maybe you’ve gone down to the local bar to drown financial woes in a cold brew. Guess what, if you were drinking a Yuengling, you have optimism during the Great Depression to thank for the refreshment. America’s oldest beer maker was close to selling out or shutting down during the 30’s. But they didn’t. Instead they saw an opportunity and expanded, finding different ways to make money — knowing that things would turn around. The story is the same for countless other companies who have weathered economic storms.
Now is the chance for men with cajones, the ones reading this right now, to take action.
Sink or swim — America will emerge stronger than ever if we decide to go forward instead of just treading water.
Benjamin,
I think you said it best. My friends and I have always been looking for ways to jump start a new idea and create something out of nothing…I’m not going to sink nor tread water…i’m going to swim..i don’t know how to fail nor will i allow it and I hope others follow suite. Work hard and push it to the limit.
thanks for some inspiration
These are all good points guys and please keep them coming. Personally I’ve been following many of the same strategies; cutting out drinks at the bar (and the 100%+ markup for it),eating fewer lunches out, setting up auto deposits into a savings account.
Also thanks to Eric’s suggestion, I’ve take the time to sign up for Mint.com and had it process my finances. The service is free and it’s amazing how much pointless spending I’ve been able to identify once the financial monitoring service worked its magic. Mint’s ability to set up alerts for when I’m approaching budget limits for various things has also helped keep my spending in check.
To Benjamin’s point, I’ve had friends decide to use their tax return money for investment purposes only. Most of them just bought stock, but the idea is a good one. It may not be coming up with the next big thing, but at least it recognizing that again you can’t save into wealth.
Please though, anyone who has thoughts let’s hear them. In these times, we could all benefit from a public forum on money strategy.
Totally cutting back on my deployment of monkey moon bases and armies of war kittens …
In all seriousness, “entertainment” spending has gone way down, big purchases are out, trying eat in more, etc. I still contribute 8 percent to my 401K, another $150/month to my IRA then $300 a month to my savings account (which, unfortunately, doesn’t stay there long). Problem there is that it’s too accessible. I either need to re-deposit that money into a savings account that’s harder to get to … or somewhat rig a device that slaps my mom every time I make a withdrawal.
And that’s not very nice.
“or somewhat rig a device that slaps my mom every time I make a withdrawal.
And that’s not very nice.”
Haha awesome. I wish Mortgage Brokers had one these devices for everytime they wrote an irresponsible loan in the last 8 years, there’d be a lot less empty houses. It’s be nice to have it set up for politicians and pork spending too.
My wife and I decided to not buy anything new for all of 2009 (other than consumables like shave cream or car brake pads). It’s a tough challenge but so far so good. It really makes us think about what we need and want. It also has forced us to be creative about where we get things we want - Craig’s List, thrift stores, etc.
We also got rid of our telephone land line, downgraded our cable TV package and shopped around for cheaper insurance. All in all, it’s saved us a considerable amount already.
I’ll bite. Here are 8 things I’ve done so far to save some cash, even though I can’t win anything (damn).
1. Dropped the premium channels (actually, the cable company threw in HBO free o’charge). Asked my cable company to switch my high speed internet from Earthlink to Road Runner. $40 monthly savings.
2. Dropped the gym (sorry, Patrick) and picked up a Perfect Pushup and an Iron Gym. $75 monthly savings.
3. 86′d the biweekly housekeeper, just one visit now. $50 monthly savings.
4. Had my school loan interest reduced by 1.5% points by calling the bank and demanding it. ~$30 monthly savings.
5. Moved my car to a cheaper parking spot in the city. (this one’s kind of New York-ish only) $180 monthly savings.
6. 4 words: Bulk purchases at Costco. $?? savings.
7. Opened an ING Direct Savings account (1.65% annual yield) to keep money liquid but not easily accessible. Depositing 10%.
8. Cheaper wine, booze, and beer. Less wine, booze, and beer. Cheap hooch doesn’t mean it’s bad hooch. $?? savings
Total Monthly Savings: $300+ (and counting)
Apparently I’m not…created a account on mint, plugged in my accounts and shat my pants…
I think I need to reaccess WTF I’m not doing…
Hopefully our readers submit some tight ideas
Learning to raise and butcher my own livestock on the way to becoming a full-fledged survivalist. Lobbying my local business to begin accepting gold and silver bullion, as I only trust hard currency.
There’s a good article on Morningstar about ways to cut expenses (http://news.morningstar.com/articlenet/article.aspx?id=282420&)
I’m with Eric, though. I’ve got the ING Direct savings and I just cancelled my cable premiums last month. I’m also thinking I need to cancel my home phone and just stick with cell phones.
My wife and I were going to buy a home this year, but we’re going to rent at least until the fall to see how the economy fares before taking on a bunch of debt.
I’m gonna go out to the dump with my Nail Jack and pull all the nails out of that perfectly good wood, build a freakin’ sweet house (okay perhaps windowless) and just chill!
Alright guys I have been thinking about this for a while and here is what I got for ya.
-Avoid the grocery store: There is a reason why the bread and milk are in the back of the store, you will buy stuff you dont really need or can live without.Try going grocery shopping once a month if possible.
-Well since your not going to the grocery store anymore. Go to Costco and buy bulk. i know someone already said this but you can buy almost everything you need there and its cheaper than the g-store.
-No more movies. Just don’t. There a terrible waste of money. Rent a movie to watch on your flat screen for a $1 at Redbox vending machines. Or download it for free online.
-Same goes for music. Don’t buy it. Download it online for free or subscribe to rhapsody online for $15 a month and download all the songs you want then cancel it right away.
-Skip the taxi and walk it if you can, or hope the subway.
-One word. PREGAME. If your gonna go out on the town drink before you do. You will save oodles of money. O and go with the Svedka instead of the grey goose at home and at the bar.
-At the bar specials are your best friend, be aware of them and what time they end.
-Here’s one that some GP readers won’t like: Easy on the tipping, at the bar no more than a dollar a drink (hey were in a recession)if you can save $10 a night thats like 2 more drinks.
-Bring lunch, which is something i need to do more of. If you can’t or are to lazy to bring your own lunch, bring your own soda,that alone will save you $1.50 a day. If you do go out to lunch, go cheap, im talking about $5 footlongs from subway cheap(there not so bad actually.
-For breakfast bring in a box of cereal Costco) this will last you 2 months as long your work provides milk your good to go.
-Shop around.Lots of places will price match so if you dont want to buy something online a brick and mortor store will most likely match the price. (tip: check out deals2buy.com for good electronic deals)
-If you do decided to go out for dinner, skip the booze if possible. It just pads the bill. Get water instead and save the wine tasting for home.
-Get your shoes resoled instead of buying new if possible.
-Buy an iron and avoid the dry cleaner also limit the clothes you buy that are dry clean only.
-A rule to live by: if its not on sale don’t buy it. my mom has said it to me for 22 years now.
Sorry if I said to much i just REALLY want access to that GP closet there definitely some awesome stuff in there.
Everyone has great ideas, use them all to your advantage.
So far I haven’t had to change much, but I know it’s coming. I travel constantly for work so I’m usually on an expense account.
1. Canceled Netflix & let XM lapse
2. Canceled HD cable (using HD Homerun and 360’s to show/record HD local channels on TV’s for free)
3. Drink less, use the gym membership more
4. ING Direct to keep it liquid, but removed from the daily checking.
5. Just got married, so still working on the rest
Here is the best way to save money - you have to fund your little purchases by putting off big purchases. Here’s how:
* This year I wanted to buy a BMW 335i to replace my 2002 Avalon. Price, $50K. I also wanted an Omega speedmaster for $5K.
* Instead I opted to buy neither, saving $55K instead in a 5% bond. That’s 2.5K a year or $200/month.
* Now, I use that $200/month I’m saving to fund all the little purchases that people above are saying they’re cutting out. Drinks at bars, etc. Whenever I spend from that I note it’s towards my $200/month.
* The best part of the plan is that I haven’t had to materially change my lifestyle (I just gave up on a big lifestyle increase for a bit), and I am still able to enjoy some of the smaller, nicer things.
* Saving, like dieting, doesn’t work if all you do is think “spend less!”. If you put together a ’spend account’ that is based on money you’ve saved elsewhere, then overall you’ll be much better off and will be able to keep your promises.
Other ideas:
* Get a smart power meter for your apartment which charges you variable rates for power during the day. I saved an average of $40/month on my power bill by washing clothes/dishes etc at night. http://www.efergy.com
* Pay your estimated taxes, if you owe them. Unless you’re willing to do illegal things, the government will get your money eventually - cheaper to pay on time.
* Shop at asian markets - food is much cheaper and produce is better! At least, the ones I know.
* Agree with the point above about tipping - when times were good I shared the wealth; now I still tip well when it’s deserved, but if service sucks, giving the ol’ 10% means a heck of a lot more now than it did before.
While smart in theory, most people don’t have a free $55K laying around. I certainly don’t. Instead of a $5K Omega, which I’d love, I bought a modded, de-badged automatic Seiko diver. It’s a tank that’s perfect as the daily beater, plus it piques the interest of watch geeks everywhere.
BTW, who won their choice of the GP booty?
Fair point but what people do have is desires that cost them $55K - at which point they get a loan which makes the cost of the money much higher (in my case, having it vs. having a bond or $200/month; in theirs, having little vs. having a loan or -$350/month). So, it really applies to everyone, and it sounds like more so when you need to save!
Yeah that’s true - who won the booty GP?
The economic environment (and being a graduate student) has taught me to be more resourceful and to appreciate the things I already have. GP readers can look forward to our new series called Gear Patrol Essentials where the crew profiles gear that we go back to time and again. Look for GPE in March.