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Ways to be more frugal on overall spending?

1,446 572 July 26, 2019 at 06:59 PM
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I feel like our family lives a relatively frugal existence, but we aren't saving anything for retirement. Between property taxes, car expenses, medical expenses and utilities, it often feels like we can't save what we should be. I know that part of this is because we took out a 15 year mortgage, so we ARE building up equity in our house (I guess technically this is sort of like socking away cash).

We spend cash for much of our regular spending, with debit and credit card for larger items.
I try to be frugal where I can, such as not having cable tv. We just pay $15 a month for 30mbps internet, share Netflix with my parents, and use Google Voice for free home phone line.

I do know that our medical costs have gone up a lot over the past decade. We used to have good health insurance with just a 10% copay. Now, instead we are responsible for the first $5k of health costs each year. Of course, dental is considered separate. I think we'll pay about 15% of our roughly $78k household income on health costs this year. This is probably our single highest cost. We'll also pay about $18k on mortgage, property taxes and utilities, so perhaps that should truly be considered our largest single cost.

If anyone can recommend a simple tool that might help us decrease costs a bit, and increase savings, I would appreciate any insight. Thanks!

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#2
Honestly seems like you are cutting costs a lot already. The way I see things for myself is to continue increasing income rather than cut costs as at some point you won't be able to cut much anymore without sacrificing quality of life. Just my 2c.
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#3
It's just hard to support two people on $78K (I'm assuming no kids). If you're in a metropolitan area, it's hard to support one person on that. Like the poster above me said, the "easiest" way to save more is to get higher paying jobs.
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#4
Welcome to the joy of gov mandated\interfered with health care lol. Pay a lot more, get crappy insurance.

As to saving money, the largest expenses most homeowners have is likely property taxes and medical insurance. Outside of moving to a better state\where property taxes are not a form of criminal robbery to pay off crooked pols and crummy teachers, there is not much you can do about them except verify that your local town\state has assessed your home fairly. Towns love to screw home owners over on the idea that most will never appeal their assessments and take them to court if necessary. Every jurisdiction has its own rules on how and when you can appeal if you think your home is assessed too high. Look into that and verify that your home is assessed at a comparable\fair market rate.

As to medical, best you can do is take the cheapest plan you can find that allows you to see decent doctors\your preferred doctors. Unless you have specific medical reasons to be on a gold or silver plan, they very rarely are worth the extra premium costs if you are fairly healthy. Wrt Dental, unless you get a decent plan through your work, it is usually best to just not bother with Dental insurance as the premiums end up costing as much or more than any benefit payouts for most people (unless you have a lot of dental issues annually). Not much you can do there.

Other things to look at:
- Car - Never buy a new car...get one you can afford and drive it until it becomes unreliable. 2-3 year old used cars are often 1/3 or more off the new price and that saves you a lot in the long term.
- Home\auto insurance costs can be reduced by shopping around with a local independent agent and getting both from the same company. They will also be able to tell you whatever other discounts you can get (group, defensive driver, alarms, etc).
- Switching internet providers every few years to whoever gives the best new sign up deal is usually worth it (or call up their retention's department and tell them you wish to cancel because you can do better elsewhere and see if they give you a discount).
- Minimize your cell phone bill to what is needed. Avoid costly unlimited data plans and more notably, avoid paying $400+ for a cell phone every few years. Used prior models in excellent condition can be gotten on swappa or Ebay.
- Utils - Do what you can to insulate and make your home more efficient. Program your thermostats to save AC or heating when you are at work\not at home\sleeping.
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#5
Quote from slugbug
:
I feel like our family lives a relatively frugal existence, but we aren't saving anything for retirement. Between property taxes, car expenses, medical expenses and utilities, it often feels like we can't save what we should be. I know that part of this is because we took out a 15 year mortgage, so we ARE building up equity in our house (I guess technically this is sort of like socking away cash).

We spend cash for much of our regular spending, with debit and credit card for larger items.
I try to be frugal where I can, such as not having cable tv. We just pay $15 a month for 30mbps internet, share Netflix with my parents, and use Google Voice for free home phone line.

I do know that our medical costs have gone up a lot over the past decade. We used to have good health insurance with just a 10% copay. Now, instead we are responsible for the first $5k of health costs each year. Of course, dental is considered separate. I think we'll pay about 15% of our roughly $78k household income on health costs this year. This is probably our single highest cost. We'll also pay about $18k on mortgage, property taxes and utilities, so perhaps that should truly be considered our largest single cost.

If anyone can recommend a simple tool that might help us decrease costs a bit, and increase savings, I would appreciate any insight. Thanks!
Have you started with a simple budget? Just tracking where money goes for a few months before you make it can be eye opening.
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#6
As far as savings, just do that first and live off of what is left. Even if you just start off with a small amount out of each pay period, do that first before anything else. If you wait to see what is left you will never save anything. Even if you just start off with a small amount seeing it accumulate over time gets addicting and you will work harder to add a little more as you go.

This is a good idea both for building an emergency fund, regular savings, and retirement savings as well. Just don't wait too long to get started and end up trying to play catch-up saving for retirement like I did. If you think it is tough to put money aside now, wait until you realize the years until retirement are in single digits and you start wondering if you will have enough.
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I like what she said, not what it means.
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#7
Quote from YanksIn2009
:
Welcome to the joy of gov mandated\interfered with health care lol. Pay a lot more, get crappy insurance.

As to saving money, the largest expenses most homeowners have is likely property taxes and medical insurance. Outside of moving to a better state\where property taxes are not a form of criminal robbery to pay off crooked pols and crummy teachers, there is not much you can do about them except verify that your local town\state has assessed your home fairly. Towns love to screw home owners over on the idea that most will never appeal their assessments and take them to court if necessary. Every jurisdiction has its own rules on how and when you can appeal if you think your home is assessed too high. Look into that and verify that your home is assessed at a comparable\fair market rate.

As to medical, best you can do is take the cheapest plan you can find that allows you to see decent doctors\your preferred doctors. Unless you have specific medical reasons to be on a gold or silver plan, they very rarely are worth the extra premium costs if you are fairly healthy. Wrt Dental, unless you get a decent plan through your work, it is usually best to just not bother with Dental insurance as the premiums end up costing as much or more than any benefit payouts for most people (unless you have a lot of dental issues annually). Not much you can do there.

Other things to look at:
- Car - Never buy a new car...get one you can afford and drive it until it becomes unreliable. 2-3 year old used cars are often 1/3 or more off the new price and that saves you a lot in the long term.
- Home\auto insurance costs can be reduced by shopping around with a local independent agent and getting both from the same company. They will also be able to tell you whatever other discounts you can get (group, defensive driver, alarms, etc).
- Switching internet providers every few years to whoever gives the best new sign up deal is usually worth it (or call up their retention's department and tell them you wish to cancel because you can do better elsewhere and see if they give you a discount).
- Minimize your cell phone bill to what is needed. Avoid costly unlimited data plans and more notably, avoid paying $400+ for a cell phone every few years. Used prior models in excellent condition can be gotten on swappa or Ebay.
- Utils - Do what you can to insulate and make your home more efficient. Program your thermostats to save AC or heating when you are at work\not at home\sleeping.
laugh out loud My god are you bitter.
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#8
Quote from slugbug
:
I feel like our family lives a relatively frugal existence, but we aren't saving anything for retirement. Between property taxes, car expenses, medical expenses and utilities, it often feels like we can't save what we should be. I know that part of this is because we took out a 15 year mortgage, so we ARE building up equity in our house (I guess technically this is sort of like socking away cash).

We spend cash for much of our regular spending, with debit and credit card for larger items.
I try to be frugal where I can, such as not having cable tv. We just pay $15 a month for 30mbps internet, share Netflix with my parents, and use Google Voice for free home phone line.

I do know that our medical costs have gone up a lot over the past decade. We used to have good health insurance with just a 10% copay. Now, instead we are responsible for the first $5k of health costs each year. Of course, dental is considered separate. I think we'll pay about 15% of our roughly $78k household income on health costs this year. This is probably our single highest cost. We'll also pay about $18k on mortgage, property taxes and utilities, so perhaps that should truly be considered our largest single cost.

If anyone can recommend a simple tool that might help us decrease costs a bit, and increase savings, I would appreciate any insight. Thanks!
If you have the willpower, pay with credit card instead of cash. Don't buy anything differently, thinking that you'll be able to pay it off over time. By paying with cash, you're missing out on 1-5% cash back which adds up.

Many credit cards also provide nice tools for tracking your spending by category.

Does your employer offer an FSA for healthcare? If you know you'll have medical expenses, you can put $$$ into the FSA and avoid paying taxes on it.

Only way to decrease mortgage stuff is to refinance or move, both which might not be possible. Also, I'm no financial adviser, but counting on your home equity to be your main asset is playing with fire. In your situation, if a good rate is available, I'd go to 30year for a lower monthly payment and put the difference into some retirement account. If your employer offers a 401k match, do that since you're missing out on free money.

Other savings tips are hard without more details. Are you brand loyal? Do you buy the same set of groceries each week or do you shop sales? How often do you eat out? Vacations? Have you shopped around for insurance rates lately? Utility rates? Cell phone plan? What about your cars?
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#9
a simple tool that costs nothing: make a spreadsheet, and include every dollar earned and every dollar spent. don't cheat, be rigidly honest. especially with cash. many people find it hard to keep track of cash - sometimes, you break a $20 bill and suddenly the entire amount is gone because you didn't keep track. and when you start keeping track of all those little purchases here and there, you train yourself to avoid them.
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#10
Quote from bonkman
:
If you have the willpower, pay with credit card instead of cash. Don't buy anything differently, thinking that you'll be able to pay it off over time. By paying with cash, you're missing out on 1-5% cash back which adds up.
When you pay with credit card, you don't get to experience pain of losing your money like when you pay with cash. It's psychology thing. People tend to spend more with credit cards.

https://www.psychologytoday.com/u...end-credit

Paying with credit card is also a lot easier (no changes to worry about, the card is more secure if it gets stolen than cash, etc) than cash so I don't know the motivation for needing "willpower" to use the card.

Use cash and don't use credit card is more effective to avoid overspending. Anything that makes spending harder will help you with saving.
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#11
Quote from teetee1
:
When you pay with credit card, you don't get to experience pain of losing your money like when you pay with cash. It's psychology thing. People tend to spend more with credit cards.

https://www.psychologytoday.com/u...end-credit

Paying with credit card is also a lot easier (no changes to worry about, the card is more secure if it gets stolen than cash, etc) than cash so I don't know the motivation for needing "willpower" to use the card.

Use cash and don't use credit card is more effective to avoid overspending. Anything that makes spending harder will help you with saving.
Will power meaning that you don't change spending patterns. The buy more with credit is a population statistic, not necessarily an individual thing. the population as a whole is bad with finances and long term planning. I'm not. I treat cash like Monopoly money and credit cards like precious gems. Ymmv. Feel free to do what you want but you're missing out on all those rewards.
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#12
Quote from slugbug
:
If anyone can recommend a simple tool that might help us decrease costs a bit, and increase savings, I would appreciate any insight. Thanks!
I would definitely enforce the zero-based budget and make sure each dollar has a purpose. It's not about saving more, it is about making sure there are no spending in the "miscellaneous" category.

Sell the budget idea to your kids and spouse by offering them dreams so everyone has the goal in mind that you can work together on.

List your annual expenses from largest to smallest. 78k after tax is like 65-68k in my area with a family of four but may not be the same in your area. Only by listing the expense and have a budget you will know where to trim. Some people think their expense for certain area is low, but to others it may be already too high. I got a used car with $6k cash back in 2017 which is considered a poor people behavior especially with my net worth near $1m but to me it's a significant upgrade since my previous car which I bought back in 2003 was only $4k and the total ownership cost was less than $12k over all these years.

So post your numbers and your location in details and let others to judge if you are frugal if you are looking for accurate advice.
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Last edited by teetee1 July 29, 2019 at 07:43 PM.
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#13
don't eat out,take public transport,bring lunch to work,
get second job,move to a job with healt insurance bike to work
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#14
Thanks for all of the suggestions, everybody. I think that eating out may be eating up more of our $ than I realized. We don't go to fancy places too much, but after looking things over, I realized that we do tend to grab things from places like Wendy's 3 times a week. Plus, while I do pretty good at packing for work, many of my co-workers go out all the time, and they are always asking if I'd like anything as well. Almost half the time I give in and since they are going anyway, end up having them get one of whatever is my favorite thing from that place. I need to buckle down and just eat what I've packed, since the small things can add up, and I'm overweight as it is.

The car is also an issue. In 2015, we bought a used 2012 Toyota Yaris with 40,000 miles on it for $5,000 from a private seller on Craigslist. It has been the most dependable vehicle we have ever owned, with no real repairs at all needed. However, it is manual transmission, and only 2 doors. We have 5 in our family, and 2 of them will be/are learning to drive. My wife says that to simplify things, we need to have another vehicle, and it should be automatic transmission and 4 door. Since the Yaris has been so low cost and dependable, I thought we would look for another Yaris that was about the same age - roughly 4 years old.

Unfortunately, everything I've found has 2-4x as many miles on it, or is double the price. I was expecting to spend about $6k on one, (about 20% more than last time) but I may have to rethink my strategy. Either I got an unusually good deal on our 2012 Yaris, or else the used car market has changed quite a bit in the past 4 years.
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#15
Quote from slugbug
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Thanks for all of the suggestions, everybody. I think that eating out may be eating up more of our $ than I realized. We don't go to fancy places too much, but after looking things over, I realized that we do tend to grab things from places like Wendy's 3 times a week. Plus, while I do pretty good at packing for work, many of my co-workers go out all the time, and they are always asking if I'd like anything as well. Almost half the time I give in and since they are going anyway, end up having them get one of whatever is my favorite thing from that place. I need to buckle down and just eat what I've packed, since the small things can add up, and I'm overweight as it is.

The car is also an issue. In 2015, we bought a used 2012 Toyota Yaris with 40,000 miles on it for $5,000 from a private seller on Craigslist. It has been the most dependable vehicle we have ever owned, with no real repairs at all needed. However, it is manual transmission, and only 2 doors. We have 5 in our family, and 2 of them will be/are learning to drive. My wife says that to simplify things, we need to have another vehicle, and it should be automatic transmission and 4 door. Since the Yaris has been so low cost and dependable, I thought we would look for another Yaris that was about the same age - roughly 4 years old.

Unfortunately, everything I've found has 2-4x as many miles on it, or is double the price. I was expecting to spend about $6k on one, (about 20% more than last time) but I may have to rethink my strategy. Either I got an unusually good deal on our 2012 Yaris, or else the used car market has changed quite a bit in the past 4 years.
Yeah, eating out adds up quickly, even if you're eating fast food. I mean, if you're eating a single item off the dollar menu, it doesn't. But you're probably not going to be doing that. On the topic of eating out, skip drinks and get water.

You got lucky on that Yaris. Few people drive stick and most of the people who do aren't looking to do it in a Yaris -- they want something flashy. Back then, you were part of a limited market. Now, you're just another person looking for an automatic family car. There are lots of people who want 3-4 year old cars with low mileage. To give you an idea, in my area, used car dealers are selling 3 year old CRVs at 80+% of a 2019 CRV. A 7 year old 100k+ miler goes for about 40% of new. Of course, dealer prices will be higher than private sales, but I'm just trying to give you an idea. You bought a 3yo car at about 30% of it's original price. Nice slickdeal.
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