Life on a Budget

I know many financial gurus that discourage the use of credit cards. I agree that using them can make for a quick trip to Debtville, but I also believe credit cards have gotten a bad rap due to those that misuse and abuse them. I believe that if you understand how credit cards work and you are responsible in paying them off each month, then they can be a fantastic and easy way to save money.

Why do I love my credit card?

The rewards. There are tons of different programs available for your card. I use the World Rewards program. What does that mean? I get 1% back on all my purchases. Which in turn means I get a whole lot of free money. The money I receive back can be in the form of gift cards or cash. 1% may not sound like very much but I use my credit card for every purchase and every bill that I can. (I wish I could pay my mortgage on a credit card.) By doing this the rewards add up fast! The key to this system is you MUST be able to pay your card off every single month. So you have to be disciplined in your spending.

Saving even more…

One thing that I do to save even more money is I always get the cash back. This way when I spend that money again, for example on groceries or gas, I use my credit card and get my 1% back. Not a bad deal. If I were to get the gift cards I wouldn’t get 1% back when I use them to pay for my purchase. Another “trick” is if your job has you traveling a lot, ask your employer if you can use your credit card to book airfare, rental car, hotel, meals, etc. You will get reimbursed for all the costs of your trip and you’ll still get the 1% back to spend as you like.

Remember to watch out for credit cards that have an annual fee. I recommend choosing a credit card/program that doesn’t have one.

So how much money can you save?

Well, it depends on how much money you can charge on your credit card. If you spend on average $24,000 a year (or $2000 a month) on your card, 1% would be about $240. Completely free money.

I have one word to describe Upromise – spectacular. This is the first program that I’ve used in a long time that does so much for it’s customer, that is easy to use, that continues to add new (and easy to use) features and is literally everywhere.

So what is Upromise?

For those of you not familiar with Upromise, it’s a program that earns you money for college through your everyday buying. All your earnings go directly into your Upromise college savings account. Then, you decide if you’d like to grow them tax-free in a 529 plan to pay for college, use them to pay down a Sallie Mae student loan, or receive a check for college expenses.

Here are some of the features that I love about this program:

1. Use your existing credit card.

Sign up your existing credit card and anytime you shop at a store or eat at a restaurant or buy gas etc. that supports the program you will automatically earn a percentage of your purchase—without doing a thing. You don’t even need to know that the store was a contributing store. Or you can get a Upromise credit card which will help you save even more.

2. Online shopping has never been so much fun.

Not only does a percentage of your purchase go towards your loan/account, but many of the stores have additional online saving coupons which can be an additional percentage off your purchase, a free gift or free shipping. Another nice benefit to shopping online is you don’t need a credit card to take part in the savings. As long as you go to the website you are shopping at through Upromise first, and enter the coupon code at checkout, then you get the savings and you can pay however you like. It’s that simple.

3. Huge selection.

Upromise makes it so easy to use the program because it is everywhere. So even if you don’t shop online, if you buy gas or groceries then you can use this program. Ways to save money are in the following categories: online stores, eCoupons, grocery, restaurants, travel, credit card, finance, auto, home, and more.

4. Family members can help you out.

Ask your parents, grandparents, aunts, uncles, friends – whoever you feel comfortable asking to help you save for college, pay off your college loan or help contribute to your children’s college fund. When they join, their savings automatically transfer to you. They can even decide what percent of their savings to share. Better yet, if you don’t have a college loan/savings account, help a loved one that does. You can also offer to be a guest shopper.

5. Upromise eCoupons.

Select which eCoupons you want, activate your list and earn savings for college when you buy those products at participating stores. You will need to get and activate a special card from your participating store but it’s free and easy.

6. Upromise manages everything for you.

You associate your education account or loan to your Upromise account and it tracks all your earnings and applies it to your account/loan.

7. Support a school.

All or a percentage of your earnings can go towards your favorite K-12 school. How cool is that?

8. It’s free.

How much money can you save?

I set up an account about a year ago to help pay down my college loan. Without knowing too much about the program, I paid off about $100 on my loan. Not bad. But I have to say, I think this year will be a whole lot more. I am suddenly more aware of the little blue and yellow Upromise logo and it seems to be everywhere I look. I’m really having a lot of fun with this program. I highly encourage you to see what the program is all about.

As if you needed another reason to quit smoking, the government imposed it’s single largest tax increase on cigarettes and tobacco today. The $0.62 increase per pack can definitely have an impact on your budget. I personally don’t smoke, but if you do, now might be a little extra incentive to kick the habit.

How much money can you save?

Well, it depends on how much you smoke but figuring a pack a day…

An extra $0.62 a day X 365 days a year = $226

Add that to what a pack of cigarettes sells for… let’s say on average $6

$6 x 365 days a year = $2190

for a grand total of $2416 a year.

wow.

One of the quickest and easiest ways to save money is to cook dinners at home. If you find you eat out or order in almost every night because of a busy schedule, and can’t stop eating out all together then just cutting back to one or two times a week will make a difference. A good place to start is to substitute the foods you find you are ordering out with something you can find in the grocery store. For example, buying frozen pizza ($4 – $6) instead of ordering out from the local pizza joint ($10-$15) can save you half the money or more.

If you think cooking takes too long and you feel you just don’t have time, try researching the internet for some quick recipes. Rachael Ray has a ton of 30 minute meals that are sure to fit into any lifestyle. Remember, just because you cook at home doesn’t mean you need to cook a gourmet meal. Keep things simple and try new recipes on the weekends when you have a little more time. Tacos and chicken fingers (chicken breasts with shake-n-bake), fries (sliced up potatoes with olive oil and salt baked in the oven) and a bag of steamed veggies are two weekly staples in my house. In the summer we grill up steak/chicken and veggies once or twice a week.  The nice thing about these meals is they are quick, cheap, easy to clean up and are delicious.

Once you get in the habit of cooking try making a little extra and brown bag the leftovers to work the next day.  Pasta dishes are always great for this – ziti, lasagna, alfredo, etc.

How much money can you save?

This is a tough one to calculate out as it will vary tremendously from person to person. If you find you are eating out a lot and you cut back you will notice a lot more money in your pocket at the end of the week. The pizza example above has the potential to save over $250 in a year – and that’s a cheaper example.

If you are one of the many millions of people who stop off at the local coffee chain on your way to work, and/or when you drop off the kids, and/or to pick up the kids, and/or just about any time you leave your house, you may want to consider brewing your own cup of Joe before you leave the house.  Not only are you likely to get a better cup of coffee, you are also likely to see a lot more money in your bank account at the end of the year.  Let’s take a look at the numbers:

Home brew

The cost of brewing your own coffee at home has so many variables that I’m not even going to try to break out all the scenarios. But I can say that it is cheaper than buying by the cup. One trick to getting a great cup of coffee while saving more money is to get a bag of your favorite premium blend and mix it with a cheaper blend. You’ll be surprised how the premium taste shines through and how long the bag of premium blend lasts.

Coffee chain

A medium cup of regular coffee at my local coffee chain is $2.

(plug in how many cups you buy each day) X avg $2 price of coffee X 7 days in a week X 52 weeks = cost per year

How much money can you save?

Cutting 1 cup a day = $728 a year
Cutting 2 cups a day = $1456 a year

Cutting 2 cups a week = $208 a year

A fancier cup

If you find that you have a taste for the fancier drinks like lattes, mochas and espressos then cutting back even one cup a week may help you stay within your budget since these tend to run $4-$6 a cup.

Avg $5 a cup X (plug in how many you buy per week) X 52 weeks = cost per year

How much money can you save?

Cutting 1 drink a week = $260 a year
Cutting 2 drinks a week = $520 a year

If you were to buy one of these fancier cups of coffee every single day you would spend approx $1800 a year!

If you just cannot make your own or cut back from buying a cup of coffee then try ordering a medium instead of a large or a small instead of a medium.  Not only will you save a little bit of money, you may even start to see your waistline decrease also!

I was always the person who spent the mornings at work thinking about what I was going to have for lunch… a turkey sandwich or Chinese food or the soup of the day at the corner deli… and I have to admit I did enjoy it. But as funds got tight and I realized that cutting back and eventually eliminating eating out for lunch saved me a lot of money, I was hooked.

So how much can you really save just by bringing a lunch from home?

From my experience, lunch costs approx $6-$10 a day. Now it’s not like you aren’t going to eat anything for lunch so let’s say, on average, the lunch you bring from home is worth about $2. Therefore, we would be spending about $4-$8 a day, so for this example I’ll use an average of $6 a day.

$6 x 5 days a week = $30 a week x 4 weeks = $120 a month x 12 months = $1440 a year

Even bringing a lunch just two days a week can be significant:

$6 x 2 days a week = $12 a week x 4 weeks = $48 a month x 12 months = $576 a year

How much money can you save?

$288 to $1440+ a year

Sometimes saving money can unfortunately mean giving up something you really love. But sometimes it opens up a door that you never would have explored and you can find yourself pleasantly surprised. This was the case when I decided to cut back on my movie renting. I was a subscriber and huge supporter of Netflix and loved everything about it – except the cost. Not that the cost is unreasonable by any means, the only fault was that there was a cost. So I made the decision to stop my subscription and to start getting my movies from the local library. That’s right, the library. At first this didn’t seem like a good compromise at all as the selection of movies didn’t even compare to that of Netflix or any movie rental store, but after a little time and a bunch of great movies I was hooked. The thing I love the most about the library is there is no reservation in picking a movie – I go and just pick out any movie I think has potential. In doing this, I’ve seen so many excellent movies that I had never heard of and probably would have never picked out from a selection of blockbusters. And I hold no regrets for the handful of bad movies that I have picked since it didn’t cost me a thing. My library also has a waiting list for newer movies so you don’t miss out on the popular titles. Oh, and did I mention that it’s all completely free?

How much money can you save?

Approx: $60 – $170 a year vs. mail services

Approx: $208 a year if you rent on average one movie ($4) per week from movie rental store or pay-per-view

Tip: If you do rent movies from you local movie rental stores, make sure to use a coupon.

The biggest misconception I have heard is that using coupons are a ‘waste of time’. No matter what stage of life you are in, or how much money you may have, coupons are a great, easy way of saving money. You can find coupons in a variety of places including the Sunday paper and local publications. Here are some tips on using coupons that can help you spend less money on regular day purchases.

1. Use coupons only on items that you would have bought anyway

For example, don’t go out to eat simply because you have a coupon. Instead, if you are going out to eat to celebrate a birthday or anniversary anyway, simply choose a restaurant that you can use a coupon – you may even get your meal at half price. Use this same logic for savings with retail and grocery stores.

2. Use products that you can find coupons for

I’ve switched all my everyday soaps/detergents to brands that I can find a coupon for in the Sunday paper. This includes shampoo/conditioner, lotion, toothpaste, deodorant, laundry detergent, dish soap, etc. The best is to wait till these items go on sale (and most will) and then use your coupons and stock up – which brings me to my next point…

3. Stock up if you can

Many coupons have a minimum you need to buy in order to use. The first thing you have to ask yourself is, do I need this much of this item? If no, then it’s not worth the coupon. For example, if you don’t think you will use the 5 cans of soup before they will expire than just get the one that you need now. But if you know that it’s an item you use all the time or may use in a certain time span, then it is probably worth having an extra one or two on hand. Again if you can, wait till the items go on sale and add the coupon savings to that.

4. Shop at stores that double or triple coupons

Some stores will double or even triple the value on the coupons. This is a great way to get an item you want for free or extremely cheap.

5. Read the fine print and play by the rules

I think this is probably one of the things that turn people away from using coupons. Make sure you read the fine print. Many coupons will have restrictions on when it can be used. For example, many restaurants may only be good for one night or certain meals. Most coupons have an expiration date – make sure you look to see when that is and use the coupon before that date. Some coupons will have a minimum purchase in order to use. Make sure you know what the coupon is all about – there is nothing worse than doing all your shopping and getting to the checkout to find out the coupon isn’t valid for 3 more days – trust me – I’ve done it.

Coupons can be great or they can be a headache. I think it’s all how you perceive them. My advice is use them, love them, make them a part of your shopping experience and then decide if they are worth it to you or not. Remember coupons are free money and therefore have the potential to save you a lot of money if used responsibly and on items you were going to buy anyway. Why pay full price when you can get the same thing for less?

How much money can you save? unlimited