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6 Extreme Ways to Go Frugal and Save
by Melissa Neiman
Saturday, August 7, 2010
How far would you go to save a buck in today's tumultuous economy? People are finding more ways than ever before to scrimp and save. But some take it to extremes.
Read on as expert penny pinchers detail six bold ways to cut costs -- and in some cases, generate a little revenue -- during tough economic times. Are you extreme enough to give them a try?
Get Rid of Your Car
Trading in your beloved wheels for public transportation is definitely extreme -- especially if you live in the suburbs. However, doing so saves a bundle.
"If you can walk, bike, or take public transit where you need to go, get rid of your car entirely," says Francine Jay, author of "Frugillionaire: 500 Fabulous Ways to Live Richly and Save a Fortune."
More from Bankrate.com:
• 7 Ways to Defeat Debt Denial
• 6 Illegal Money Habits
• 4 Ways to Get Cash For Your ClutterJay says people who go carless save a fortune by eliminating gas, registration, insurance, maintenance, and repair costs, as well as lease or loan payments.
Jeff Yeager, author of "The Cheapskate Next Door," agrees. He cites AAA figures showing that the average cost to keep a car on the road is close to $1 per mile after factoring in all of the associated costs.
"That's probably close to $10,000 a year," he says.
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Yeager, who shares a car with his spouse, is a big proponent of renting a car when necessary.
"Think about how much of the time your car is sitting unused. It's just a tremendous waste of resources," Yeager says.
Jay says people who need cars only to run occasional errands can join a car-share program. For such people, "it's more financially savvy to borrow than to own," she says.
Take In a Renter or Boarder
Sharing your living space may seem unappealing at first, but it's a great source of extra income.
"I always encourage people to at least consider getting a home that could allow them to get some rental income, such as a duplex," Yeager says.
Again, Yeager speaks from experience. He and his wife have had renters for the past 20 years. By doing so, they were able to pay off their house in 15 years instead of 30.
"The beauty of it only begins with the monthly rent check you're collecting," he says. "Obviously, there are incredible tax benefits to it, too ... and much to our surprise, my wife and I found that it's actually nice having other people around."
Don't own a duplex? Jay says all you need is an extra room to take in a boarder and "raise some cash and help pay your mortgage, rent and utility bills."
Jay says if you decide to make this money-saving move, be sure to draw up a tenancy agreement to specify payment terms and the sharing of common facilities.
"Check local zoning laws to confirm that such an arrangement is permitted in your neighborhood," she says.
Downsize Your Home
If you feel as though your home is too big, it probably is. Selling it and buying a smaller one may help beef up your bank account.
"The best way to save big money is to cut big expenses -- and housing is the biggest of them all," Jay says.
Jay says trading down to a smaller house or apartment also lowers the mortgage or rent, as well as the utility bills.
"A smaller space will slash your spending, because you can't buy things when you have no place to put them," Jay says.
Yeager also is an advocate of living smaller.
"People don't really stop to think about it, but for every square foot that they add to a house -- square feet they often don't need -- first they have to buy it, then they have to maintain it, they have to pay property taxes on it, they have to insure it, they have to decorate it, they have to heat it and so on," he says.
"One of the upsides of the recession has been that the average home built now is about 300 square feet smaller than those built prerecession," says Yeager.
Change How You Use Credit Card
Taking a pair of sharp scissors to credit cards can help plug a big hole in your wallet or purse.
Jay advocates paying with cash only.
"This strategy saves you a bundle in finance charges and puts the brakes on your shopping habit; because without credit, you can't spend more than the money you have," Jay says.
Jay says paying with plastic "is far too painless," making it easier to spend.
"It almost feels like you're getting something for free," she says. "When you have to hand over cold, hard cash, you'll probably think twice about making the purchase."
Yeager urges consumers to go cash-only for at least a month.
"If you don't have the cash on you, it might give you reason to stop and think (before buying)," he says.
"I always think spending procrastination is a virtue, not a vice. Put off buying until tomorrow what you want today, and maybe you'll change your mind about whether you really want it."
However, Yeager acknowledges there is "much dispute in the cheapskate community" over whether it's better to never use credit cards or to always use them so you can "rack up frequent flier miles and other bonus points."
Only Use Coupons or Go Generic
Some extreme savers take coupon clipping to a new level, purchasing items only when they have coupons and stockpiling goods for future use.
Jay says the secret to saving on groceries and other items is to "ditch the brand loyalty, and be open to alternative products or generics."
"Be adventurous and try out that bargain-priced shampoo, cereal or detergent," says Jay. "If you're shopping online, search Google for coupons before making your purchase; you'll be surprised how often you'll find vouchers for free shipping and other discounts."
As with credit cards, coupons divide the cheapskate community.
"As many cheapskates swear about them as swear by them," Yeager says.
According to Yeager, many naysayers believe coupons cause people to buy things unnecessarily.
Yeager says coupons are most popular among penny pinchers who eat more processed foods and have plenty of storage space.
By contrast, Yeager prides himself on being able to "go into any grocery store at any time and come up with a delicious healthful meal that's really cheap without ever having to use a coupon."
He simply takes advantage of "the loss leaders that the grocery store has on sale that day" and buys generic.
Dump High-Tech Toys
Many extreme savers embrace the simple life, which means either forgoing the latest toys and services or waiting until they're no longer "hot ticket" items.
In addition to saving cash, Jay says "you may find happiness in being less connected to the virtual world and more engaged in the real one."
Erin Schneider, who writes the Cheap Chick blog, also recommends cutting out unnecessary services -- "cut down on cell minutes, cancel your home phone, cancel your gym membership" -- and opting for the least expensive options that present themselves.
"Cut out Netflix and get your movies from the library," she says. "Cancel your lawn service and either mow your own, or hire that kid from across the street for less."
If you can't give up high-tech toys, at least wait to purchase them, Yeager says. The price will drop over time, and kinks in the original product likely will be worked out in subsequent generations.
"It's like the old Elvis song, 'Only fools rush in' when it comes to buying tech gadgets the day they're released," says Yeager, who has never owned a cell phone and refers to them as "electronic tethers."
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by Melissa Neiman
Saturday, August 7, 2010
How far would you go to save a buck in today's tumultuous economy? People are finding more ways than ever before to scrimp and save. But some take it to extremes.
Read on as expert penny pinchers detail six bold ways to cut costs -- and in some cases, generate a little revenue -- during tough economic times. Are you extreme enough to give them a try?
Get Rid of Your CarTrading in your beloved wheels for public transportation is definitely extreme -- especially if you live in the suburbs. However, doing so saves a bundle.
"If you can walk, bike, or take public transit where you need to go, get rid of your car entirely," says Francine Jay, author of "Frugillionaire: 500 Fabulous Ways to Live Richly and Save a Fortune."
More from Bankrate.com:
• 7 Ways to Defeat Debt Denial
• 6 Illegal Money Habits
• 4 Ways to Get Cash For Your ClutterJay says people who go carless save a fortune by eliminating gas, registration, insurance, maintenance, and repair costs, as well as lease or loan payments.
Jeff Yeager, author of "The Cheapskate Next Door," agrees. He cites AAA figures showing that the average cost to keep a car on the road is close to $1 per mile after factoring in all of the associated costs.
"That's probably close to $10,000 a year," he says.
Popular Stories on Yahoo!:
• Futuristic Bus to Beat Traffic
• Common Money Habits That Are Illegal
• Hollywood's Top-Earning Actresses
More From Yahoo! Finance [Click here to check savings products and rates in your area.]
Yeager, who shares a car with his spouse, is a big proponent of renting a car when necessary.
"Think about how much of the time your car is sitting unused. It's just a tremendous waste of resources," Yeager says.
Jay says people who need cars only to run occasional errands can join a car-share program. For such people, "it's more financially savvy to borrow than to own," she says.
Take In a Renter or BoarderSharing your living space may seem unappealing at first, but it's a great source of extra income.
"I always encourage people to at least consider getting a home that could allow them to get some rental income, such as a duplex," Yeager says.
Again, Yeager speaks from experience. He and his wife have had renters for the past 20 years. By doing so, they were able to pay off their house in 15 years instead of 30.
"The beauty of it only begins with the monthly rent check you're collecting," he says. "Obviously, there are incredible tax benefits to it, too ... and much to our surprise, my wife and I found that it's actually nice having other people around."
Don't own a duplex? Jay says all you need is an extra room to take in a boarder and "raise some cash and help pay your mortgage, rent and utility bills."
Jay says if you decide to make this money-saving move, be sure to draw up a tenancy agreement to specify payment terms and the sharing of common facilities.
"Check local zoning laws to confirm that such an arrangement is permitted in your neighborhood," she says.
Downsize Your HomeIf you feel as though your home is too big, it probably is. Selling it and buying a smaller one may help beef up your bank account.
"The best way to save big money is to cut big expenses -- and housing is the biggest of them all," Jay says.
Jay says trading down to a smaller house or apartment also lowers the mortgage or rent, as well as the utility bills.
"A smaller space will slash your spending, because you can't buy things when you have no place to put them," Jay says.
Yeager also is an advocate of living smaller.
"People don't really stop to think about it, but for every square foot that they add to a house -- square feet they often don't need -- first they have to buy it, then they have to maintain it, they have to pay property taxes on it, they have to insure it, they have to decorate it, they have to heat it and so on," he says.
"One of the upsides of the recession has been that the average home built now is about 300 square feet smaller than those built prerecession," says Yeager.
Change How You Use Credit CardTaking a pair of sharp scissors to credit cards can help plug a big hole in your wallet or purse.
Jay advocates paying with cash only.
"This strategy saves you a bundle in finance charges and puts the brakes on your shopping habit; because without credit, you can't spend more than the money you have," Jay says.
Jay says paying with plastic "is far too painless," making it easier to spend.
"It almost feels like you're getting something for free," she says. "When you have to hand over cold, hard cash, you'll probably think twice about making the purchase."
Yeager urges consumers to go cash-only for at least a month.
"If you don't have the cash on you, it might give you reason to stop and think (before buying)," he says.
"I always think spending procrastination is a virtue, not a vice. Put off buying until tomorrow what you want today, and maybe you'll change your mind about whether you really want it."
However, Yeager acknowledges there is "much dispute in the cheapskate community" over whether it's better to never use credit cards or to always use them so you can "rack up frequent flier miles and other bonus points."
Only Use Coupons or Go GenericSome extreme savers take coupon clipping to a new level, purchasing items only when they have coupons and stockpiling goods for future use.
Jay says the secret to saving on groceries and other items is to "ditch the brand loyalty, and be open to alternative products or generics."
"Be adventurous and try out that bargain-priced shampoo, cereal or detergent," says Jay. "If you're shopping online, search Google for coupons before making your purchase; you'll be surprised how often you'll find vouchers for free shipping and other discounts."
As with credit cards, coupons divide the cheapskate community.
"As many cheapskates swear about them as swear by them," Yeager says.
According to Yeager, many naysayers believe coupons cause people to buy things unnecessarily.
Yeager says coupons are most popular among penny pinchers who eat more processed foods and have plenty of storage space.
By contrast, Yeager prides himself on being able to "go into any grocery store at any time and come up with a delicious healthful meal that's really cheap without ever having to use a coupon."
He simply takes advantage of "the loss leaders that the grocery store has on sale that day" and buys generic.
Dump High-Tech ToysMany extreme savers embrace the simple life, which means either forgoing the latest toys and services or waiting until they're no longer "hot ticket" items.
In addition to saving cash, Jay says "you may find happiness in being less connected to the virtual world and more engaged in the real one."
Erin Schneider, who writes the Cheap Chick blog, also recommends cutting out unnecessary services -- "cut down on cell minutes, cancel your home phone, cancel your gym membership" -- and opting for the least expensive options that present themselves.
"Cut out Netflix and get your movies from the library," she says. "Cancel your lawn service and either mow your own, or hire that kid from across the street for less."
If you can't give up high-tech toys, at least wait to purchase them, Yeager says. The price will drop over time, and kinks in the original product likely will be worked out in subsequent generations.
___
Follow Yahoo! Finance on
Twitter; become a fan on Facebook.Copyrighted, Bankrate.com. All rights reserved.
1,366 Comments
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More 1 minute ago Report AbuseGet rid of my credit cards??? Get real! I pay for NOTHING with cash! I only use my credit card and pay it off every other week. I rack up the points and go on great trips for free. I pay all my bills (except for the card) with my points card which is money I have to spend anyway. This only works if you understand that it must be paid every week or every other week when you get paid so that you don't rack up any interest.Reply -
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Crystal 2 minutes ago Report AbuseFor most of us this is completely unrealistic. Yahoo has crappy writers and crappy ideas. There are lots of ways to save money, get rid of cable, don't use air conditioning in the summer, don't pay for data packages on your cell phone etc... those things are all less extreme and probably would save more money... As for getting rid of your car? I don't think I know one person who pays 10,000 a year keeping up on their cars. My husband and I both own our cars no loans, liability with comprehensive is 45$ a month, registration is around $50 for each vehicle and we probably only spend around 120$ in oil changes each year with the occasional extra maintenance or purchase of tires. We definitely spend under 1000$ a year on average taking care of two vehicles. So it can be done quite cheaply. If you live in a city with little to no public transportation getting rid of your car is going to cost you more than if you kept it sitting in your garage.Reply -
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Blanca 2 minutes ago Report AbuseIn addition to the college fund and the LT savings that come out automatically when my check goes to direct deposit, I created my own 'loan' account. If I need to rearrange resources for an unexpected expense (new tire, 'fridge repair, etc.) I borrow it from there.Reply
This is my method YMMV.
I look at my checking account balance BEFORE the check went in. I have a standard cushion (a few hundred to cover a high utility bill or stocking up on meat for the quarter at a good sale and such). Anything over the cushion goes in the 'loan' account.
If I need to replace the hot water heater NOW, I usually have the money to cover it in the 'loan' account. I am ruthless about the consequences of touching this. I charge myself a flat 15% fee for the privilege of using the money. The total must be restored within six months or any carry-over costs me 10% more.
This is repaid after the house and car payments but before the utility bills. We may be eating strictly from the pantry and freezer for a few weeks as a result. It gets us by, but nothing personal or discretionary is bought till the 'loan' is paid off.
At the end of the year, anything over the set limit of the Loan fund goes in long term savings.
BTW we pay our credit cards off monthly if we need to use them (built in warranties or records of purchases, mostly).
Good Luck, all.
Peace. -
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Angie G 2 minutes ago Report AbuseI guess who ever wrote this article doesn't consider time very valuable. "Time is money," and you're wasting a lot of it if you do most of these recommended frugal tips.Reply -
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JohnM 3 minutes ago Report AbuseWhy should we really care when the government sets such a lousy standard to follow?They just find a way to squander all of our resources .They certaintly don't care about a budget,responsable spending and the like!Reply -
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A Yahoo! User 3 minutes ago Report AbuseI just changed my car insurance and am now paying $45 less a month. Bills like car insurance, cell phones, tv/internet service ect, can be lowered by shopping around. You will find that companies always have some kind of promotion going on. Sometimes all it takes is doing a bit of research and changing your providers, you'll end up saving a good amount of money just by doing that.Reply -
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The 5 minutes ago Report AbuseNothing worse then cheap peopleReplies (1) -
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audrey r 6 minutes ago Report AbuseWell you must live in the South because for most Southern states a car is a must. Those that live up north do not always need one as they have great reliable public transportation.Replies (1) -
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Rick 6 minutes ago Report Abuseyah for fur burger and it is free and all you can eat too.Reply -
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JohnM 7 minutes ago Report AbuseThat's an old Ricky Nelson song there SlickReply
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