Top Money Saving Resources at Your Fingertips
Welcome to the comprehensive and continually growing recession resource courtesy of DiscussEconomics. You are going to find practical tips on how to reduce your spending, save money, and ways to come out of our recession in a better position than you went in. At the bottom we’ve highlighted total average savings to give you an ideas of how much money you can save by applying the following simple steps.
So how much can you save in our growing recession resource collection? Here’s a summary with full details below:
1. Save hundreds on your INSURANCE PREMIUMS: Average expected savings: $200-400/year
2. Turn off your lights and computers!
3. GO GREEN! Energy saving appliances and lights. Savings depends on your appliances.
4. EAT WELL, EAT IN: Total average savings? 1 per month: dining out $50/month or $600/year; fastfood $15/month or $360/year.
5. DINE OUT COUPONS: Cut that by about 40% by using coupons and you save $48-$96/month or $576-$1150/year.
6. You can save 15-25% on your FOOD BILL per trip: Total average savings for no-name and sale items? About 25% or $150/month or $1,800/year.
7. Adjust your CREDIT CARD and spending habits: Expected Savings: Depends on how much you can control your bad spending habits.
8. CONSOLIDATE DEBT: Expected Savings: Depends on your debt size.
9. DOWNGRADE UNUSED TECHNOLOGY and FEATURES: Total savings: $10-15 internet + $10-20 TV + $3-$8 phone + $5-$10 cell phone = TOTAL $28-$53/month or $336-$636/ year.
10. Adjust your DRIVING HABITS: Total savings per tank: 5-15% or $5-$15/month on spending of $100 of gas ($60-$180/year).
11. CONTRIBUTE RRSP‘s: future wealth:
12. Use your TFSA room: Future Tax savings.
13. STOP ADDICTIONS: Expected savings: .5-4.5/day x 20 days (month) = $10-$90/month or $120-$1008/year.
14. Save $2,056 in one weekend with common household upgrades and adjustments
TOTAL SAVINGS ABOUT: MONTH=$451-$625.83 or YEAR=$5,578-$7,510
We didn’t even calculate some of the biggest savings such as managing your debts properly. Since every person has different needs it’s hard to determine an example. However, that will be one of your biggest money savers as you dwindle down your debt load.
The Savings in More Detail
1. Save hundreds on INSURANCE PREMIUMS. Did you know that if you’ve started to drive your car less because of the higher gas prices (which aren’t so high at the time of this writing) you could be in-line for a rebate in your premiums. Moving from a regular to casual driver can save you cash.
There’s more, what about home insurance premiums? Chances are your deductible sits around $500. When something breaks and it’s less than that number you won’t bother calling the insurance company to claim. However, when items are marginally higher, say $600-$1000 you tend to avoid the insurance company. Usually you only approach the insurance for the loss of something huge, valuables, hot-water tank, or other big ticket items.
While you’re at it, try shopping around for another insurance provider. Competition may have lowered your premiums with another firm for the same coverage.
Why not increase your deductible to $1000 or even $1500. The savings could be more than $50/month and on average $20. Average expected savings: $200-400/year
2. Turn off your lights and computers! Unnecessary power consumption can fatten your electricity bill. Most people can save at least 10% per month by simply turning off lights when leaving rooms and not leaving appliances/electronics on when unused.
If you’re really committed to power consumption then shut off things like modems when not in use, turn off computers completely when unused, and so forth. 75 percent of the electricity used to power home electronics is consumed while the products are off!
You can track how much you’ll save by replacing your bulbs or turning off your lights by visiting this link.
3. GO GREEN! Energy saving appliances and lights. Remember that 60 watt bulb that produces 95% heat and 5% light? Well change that bulb to an energy efficient 7W model and save money. You can also consider energy efficient electronics and appliances.
Save money and be eco-friendly! Check out Natural Resources Canada for details. You are eligible for certain rebates for hitting a certain level of energy efficiency in the home. Check out the government‘s web site for rebate offerings.
4. EAT WELL, EAT IN Eating in rather that going out for meals will save you 50-75% per meal. For a family of four that’s a savings of 50-75 dollars per meal. Take one dine-out per month off the table and you’ll save 300-1200/year.
Let’s assume fast food eating rather than dining. If you eat fast food once a month you can save 180-300/ year; eat out twice a month at fast foot joints you are slated to save 360-600/year.
When you cook at home the primary cost of meals is usually meat protein. Substitute meat for something different and cheaper beans. A slow cooker will help in preparation.
Total average savings per month: dining out 50/month or 600/year; fast food 15/month or 360/year.
5. DINE OUT COUPONS. If you must dine out then save money using 2 for 1 coupons. Social media may have deals, online coupons and book coupons are still around, and you should use them. Your savings can be almost 50% per outing. Go out once a week for a party of two? That’s usually 30-60/outing x 4 = 120-240 month.
Using coupons and save $48-$96/month or $576-$1150/year.
6. Staying on the topic of food you can save 15-25% on your FOOD BILL per trip if you follow some basic rules. For instance, if you are less picky with what meats and brands to buy, you can buy what’s on sale rather than preference. Buying what’s on sale or no-name brands will save you 20% easily. By the way, the coupon will give you additional savings so don’t hesitate to get out the clippers.
Make sure you are shopping with a list so you don’t pick up unnecessary items as your eyes get big. Not shopping on an empty stomach will save you some cash too. So for a family of four your bill may be around $600/month. If you live closer to a food store you can also plan to visit with more frequency, cooking fresh and with less waste in the fridge. You want to stop throwing away half eaten bags of bread, veggies, and fruit. Freeze any bulk purchases that you can such as meat.
Total average savings for no-name and sale items? About 25% or $150/month or $1,800/year.
7. Adjust your CREDIT and spending habits. Credit card use takes a down turn during recession times. What’s happening? People are no longer putting larger purchases on their credit cards. Of course, there is another section of people who are putting more on the credit cards to make ends meet.
Many consumers don’t have proper money handling skill and improperly use credit cards. They assume it’s free money, what they don’t know is the detrimental effects of keeping a balance. Here is a basic rule for handling credit cards: do not put anything on a credit card you don’t already have the money for.
If you need money to buy things go to the bank and get a loan that’s half the interest rate. People won’t do this because A) the bank will ask questions why you really need to splurge on furniture or electronics, and b) people are usually too embarrassed to face scrutiny.
If you’re living on the edge and must use short term loan facilities look up local government or non-profit programs in your area that provide better options and help you emerge from a cash loan cycle.
8. CONSOLIDATE DEBT. Rather than point you to one of the countless web sites out there that try to sucker you into a debt consolidation deal here is some practical advice. The point of debt consolidation is to combine all debts under one roof and hopefully reducing your interest rate for some. You’ll pay the same interest rate, for everything, rather than 10 different interest rates for 10 different debts.
This is a good thing since you can now put more money towards the principal (initial borrowed amount) per month. However, the extra cash you save isn’t supposed to be your new disposable income windfall. Debt consolidation is a two step process.
Step 1. Consolidate your debt.
Step 2. Use the money you save each month and invest it properly.
You’ve taken the interest money you would have been paying, and are now making interest on it. Initially you don’t make much interest, but as time goes on you end up making some good cash. Depending on the size of your debt you can expect to pay off all your debts months to potentially years earlier.
Expected Savings: Depends on your debt size.
9. DOWNGRADE UNUSED TECHNOLOGY and FEATURES. Chances are you don’t need super high-speed internet, or in the very least you won’t notice a change if you downgrade. How about your TV? Do you really need all those channels? The phone features really necessary? Cell phone features you don’t use? Cut back on things you don’t even consume consumers!
Many hi-speed internet providers have varying high-speed speeds, competitors also have different price schemes. Look for the small player in your location and see if you can get a better deal. You only get what you ask for with the big telecom companies.
Cable packages/satellite can run from 25-75/month. Downgrade and eliminate channels you don’t watch, save at least 20/month. Use online viewing services like Netflix and cancel your cable completely.
Move your phone to VoIP. Skype will give you free outgoing calls all over North America for $35 bucks. The only catch is you need to have hi-speed internet and a microphone (still cheaper than any long distance plan). You can also take out the unnecessary calling features like call waiting. There are home phone options that don’t run on VoOP as well. The major telecom phones companies will provide an at home number and phone that runs on the cellular network for less than a physical landline. (For example, Rogers At-Home.)
Cell phones also have tons of features you may not need. Perhaps you don’t even need both a landline and a cell phone. Think about taking out a feature package and save $10 / month.
Total electronic savings: $10-15 internet + $10-20 TV + $3-8 phone + $5-10 cell phone = $28-$53/month or $336-$636/ year.
10. Adjust your DRIVING HABITS. Did you know that having properly inflated tires can save 5% on your gasoline consumption? That by not flooring the gas peddle at starts you can save 10% off your fuel consumption? That’s 15% savings per tank of gas, not too shabby if you’re driving a gas guzzler.
Total savings per tank: 5-15% or $5-$15/month on spending of $100 of gas ($60-$180/year).
11. CONTRIBUTE RRSP‘s. Not only is this the right time to buy if you’re not close to retiring, but you can also reduce the amount of taxes you pay by contributing to your deduction limit. Here are some basic introductory tips from the government of Canada’s web site on RRSPs.
(Remember you are taxed on the RRSP and gains when you withdraw from your accounts. There is a provision in Canada to withdraw early without penalty if you’re buying a house.)
So if you have the room to invest then do so, if you have even more income and want to further reduce the amount of taxable income then consider contributing to your spouse’s RRSP account. Remember this is for long term investments, you shouldn’t be thinking about withdrawing this money in the near future especially if you’re young.
If you’re closer to retiring then safer options that don’t have the same short-term risk are an option. Within 2-3 years of retirement look at GIC’s (guaranteed investments). As you get closer, reduce risk. If you’re young and want to do RRSP’s (long term) then DO NOT invest in GIC’s. That’s just a chance for your bank to earn crazy money off your investments in interest while you get 3%.
For guaranteed and tax free accounts there’s always the latest instrument for Canadians — the TFSA.
12. Use your TFSA room. Canadians have a new investment tool called the TFSA or tax free savings account. It doesn’t actually have to be a savings account with a bank, but all gains are still tax free regardless of where and what up to a maximum of $5000/year. That means how much you put in is rolled over for a fresh $5K cap room each year. That doesn’t mean you can invest $10K in year two if you didn’t put anything in year 1.
It also means tax free withdrawals. If you want to buy a house and you have 8 years of maximum TFSA contributions (so 40K), then you can withdraw the entire amount and in year 9 you will still have room for 40K plus 5K to re-contribute into the tax free account. Depending on where you’re at in life and what financial responsibilities you’ll have in the near future will dictate whether you go the route of the TFSA or RRSP.
13. STOP ADDICTIONS. Easier said than done sure, but how about one that you can manage? Rather than purchasing coffee from your favorite store, brew at home and carry a travel mug. Sound pathetic? Think about the savings. Coffee ranges from 1-5/cup. You drink at least one a day fives times a week (we’re being modest). To brew at home costs filters and coffee beans. The expected savings is .5-4.5/day.
While you’re at it, cancel memberships and unused rentals. You don’t go to the gym so why bother paying for it?
Expected savings: .5-4.5/day x 20 days (month) = $10-$90/month or $120-1008/year.
14. Save thousands with common household upgrades and adjustments like selling unused items, energy efficient appliances and bulbs, and my person favorite: drinking tap water instead of bottled (assuming you have safe water).
Heat may be another thing, whether it’s gas, electric, or fire, suitable insulation will ensure you aren’t bleeding off heat in the winter. Find the nooks and crannies that let cold air in and fill them. For large houses, consider shutting off vents in room you’re never in (like the basement).
15. IT’S TIME TO SAVE AND INVEST. Although you have a better future if you’re further away from retirement, the old adage still holds true, by low and sell high. Right now, prices have never been lower. You can buy equities (stocks) of profitable firms for bottom basement prices. Don’t put all your eggs in one basket though, you still need money to be accessible in the short term. You also don’t get the option of professional management if you’re doing this yourself.
Might we recommend equity mutual funds? This would be a great time to buy and you have a month left (in Canada) to contribute to your RRSPs (end of February to reduce taxable income of 2008). You can have a number of different instruments in your RRSP, but equities should be in your portfolio especially if you’re under 40. Many have lost of 50% of their current equity (house and stocks). However, if you have the income to buy more, then you could come out of this recession smelling like roses.
Enjoy our list and share it with your friends! Post your ideas below in the comment section as well and happy savings!