Treading water financially - need to find ways to save

[Anonymous]

I just found out that refinancing our mortgage won't be worth the tradeoff in closing costs, so now I'm looking for some ways to get a leg up.

I have $3k in credit card debt which is driving me crazy, and want to knock that out first. I'm thinking of transferring the balance to some promotional card, so I'm not paying interest while hacking away at it. Is that still done? Are there still no- or low-interest cards? Even six months would do it.

We own a car that is currently not driveable. It sits in our garage waiting for a decision that we are in no rush to make. I thought about removing it from our auto insurance policy. It's already pretty cheap, as we have excellent records and older cars. If we remove it from the policy, will there be problems getting it back on for the same cost? Those rates aren't grandfathered, are they?

Of course I'll be eyeballing our daily spending pretty closely. Maybe giving myself an allowance for outside food and beverage, and making an effort to bring lunch to work, etc.

I've read that just unplugging phone chargers and such makes a dent in electric bills. Anyone know more about this? Is it just chargers, or is it everything that's plugged in-- fans, TV, etc? Is it worth it, or are we talking $5-10/ month?

Other ideas?

[Anonymous]

Yes, as long as your credit is excellent you can probably open a new card to transfer the 3K to. You might also want to contact your existing cards to see if they have a balance transer promo. I did that with one of my cards recently.

If you or your spouse is eating out for lunch, stop that immediately. A sandwich and a drink at Quizos is $7 or $8 in Virginia with its low tax rate. It will be more in DC or MD. Restaurant meals will be more. I just spent $15 today alone on lunch. Let's say you and hubby spend $10/day on lunch -- that is $100 per week -- $20 x 5. For less than $10 total you can buy a week's worth of deli meat, bread, apples, etc. So bring lunch from home or eat at home if you are at home for lunch. Same thing with dinner. How many times per week do you eat out or order in. Stop doing that and increase your savings.

I wouldn't bother with unplugging your electrical cords for the purpose of saving money.

If you like Starbucks or some other food drink item prepared and purchased outside of your home, stop eating/drinking it.

Do you color your hair? Can you do it at home. Saves me $50 when times are tight. I still go get my nails done, but I wax at home if I need to save money.

I also don't buy things when I need to save money. My kid does not need a new DVD. Nor does she need new toys or books. She has plenty. She doesn't need candy or junk and it is not healthy for her and plenty of other people buy candy/junk for her so I rationalize it is good for me to say no.

I rode my husband's a** until he finally made a decision about an old car taking up space in our garagfe that we had insurance on and paid taxes for. We got rid of it.

Lots of things you can do to economize.

[Anonymous]

Agree with PP. Our easiest way to cut back is food costs. No eating out. Pack everything. No restaurants, no pizza delivery, no nothing. And to cut back even further, go vegetarian 2 or 3 times a week. Meat is a huge cost. Cut back on prepackaged and processed foods as well. Buy the whole chicken and freeze portions you don't need for a meal instead of buying boneless, skinless chicken breasts, for example. Buy your food at a low-cost grocery store. Our Target is cheaper than anything but Shoppers Food Warehouse in my area.

[Anonymous]

First, relax. I know you're stressed but if you approach this one step at a time you'll make it work.

A few questions:
Are you in danger of defaulting on your mortgage?
Is the $3k your only debt?
Are you or your husband in danger of losing your jobs?

1) Yes, those 0% promo cards are still out there. We get them all the time. Actually, transferring debt to a 0% card is a very smart move, so if you get the chance - do it! Keep in mind, every time you transfer you pay a fee usually equal to 3% of whatever you are transferring.

2) The car - I believe that if the car is registered, you must insure it. Registering a vehicle costs money, so if you unregister it (not sure of the actual term), then you have to pay to register it all over again. MD is an expensive state to register a vehicle. So call you insurance company and change all your coverages to minimum allowable levels.

3) Stop eating out and drinking alcohol!!! It will make a huge difference in your monthly nut.

4) cut out all the extras. date night, nails, yoga classes etc.

It hurts at first, but as soon as you start to see your debt decrease it will be an easy exercise.

[Anonymous]

The NYTimes ran a series on conducting your own financial tune-up. Great, great articles, plus checklists and how-to's. It's a treasure trove of tips and ideas. Here's a link to the main article, which then contains links to the rest.

http://www.nytimes.com/2010/03/25/your-money/25INTRO.html

[Anonymous]

We had similar issues and we ended up sitting down every thursday night, going thru our expenses in a big spreadsheet and looking at the big picture until we made some major decisions that really got us out of our bind. Don't sweat the small stuff! For us, it was a nanny that we were overpaying for her duties and for which we now had alternatives. It was very tough to tackle but once we did, i felt like we had control back. I agree eating out was becoming a safey net. The key to saving money and living on a budget is planning. Its really the services that eat into money at a quick rate - hair, cleaning, babysitting, cooking, landscaping, cable, etc

[Anonymous]

THe only people I know that truly need nd pretend to want to cut back are those who won't forego what they think they "deserve": hair extravagances, private school, and equally foolish choices. If you are not one of those, OP, good for you. Truly.

[Anonymous]

Thanks all. That NYT article is great, I look forward to reading it more closely.

Is the $3k our only debt? Well, no. Our house is mortgaged at 90% of its value, which makes me crazy, though we're keeping up with payments.

Not in much danger of losing our jobs, but my husband has some long-term health problems, so that's something that keeps me up nights. Our liquid savings are minimal ($3 or 4k?) and stagnant. Investments, well... I sure hope I don't have to pull anything out with the market the way it is. Not that there's was ever much to pull out, anyway.

When I talk to my friends about cutting back, I get a little frustrated, because they've done things like PPs here suggested-- stop going to the salon and starbucks. Well, I've never gone to salons for anything but a $50 cut twice a year, I don't drink coffee, and I don't have a nice car I could trade in on a cheaper one in order to rid myself of that payment. I see the cable bill and think "ah-ha! $100!" and then I realize that our TV/internet is 90% of our "entertainment" and that one dinner out, or an evening at the movies with popcorn and a babysitter, and we're no further ahead. As for school, our only child is in a daycare that is on the lower end of the price range around here, and we're hoping for DCPCS just as soon as she's old enough. No housecleaner, lawn service, or shopping habit.

While there is no crisis, I just feel as if we're not getting ahead. We're keeping up with everything, but not saving anything beyond contributions to our 401ks. And it won't be long before the roof leaks, or the car dies, or something even worse. I wish we were making 120% mortgage payments every month. I wish we had more like $10k in liquid savings, and were able to invest more while the market is low.

So, yeah... I'll be looking at my one "extravagance", which is buying lunch at the office most days. And I'll keep an eye on the credit card offers and see about transferring my balance. Credit card interest pisses me off.

Thanks again. Looking forward to more good tips if you have 'em.

[Anonymous]

I don't mean this harshly, but where is your money going? Is it all tied up in a big mortgage? Or possibly, are your incomes on the low end for DC?

You know this, but it comes down to making more money and/or spending less.

[Anonymous]

We discovered lots of money being wasted on convenience items - bottled water, fast food lunches (hungry kids screaming, easy to give in, keep snacks in the car), take out coffee, pizza dinners... Do yourself a favor and for one entire month, write down every penny you spend. It is a pain in the ass but it will pay off in the end after you analyze it. We realized that those trips to Costco were actually costing us money because whenever we went in for milk, we walked out with pajamas or some other random item.

[Anonymous]

Start keeping track of everything you spend for a month. It will be eye opening. You may even decide to do it long term.. we've been doing this for years. Our major expense outside of rent is grocery. We eat pretty simply, but it's still about $400 / month for 2 adults and a 10 mos old. If we were shopping at Whole Foods, I bet it would be 2x that amount.

Look into ditching the cable. You can watch so much online. We hooked an old desk top computer up to our TV and watch shows that way. If you really miss it, you can get it turned on again.

What about your cell phone? Many couples are paying $150+ / month because of data plans. It's fun to have a big data plan, but typically unnecessary. We have a phone only plan and pay about $60/ month. DH wants to upgrade but I want to hold off. W spend all day at computers. I feel like a data plan would give us internet while commuting. Totally not worth all the extra $$.

I try to buy as much as possible second hand. Before I buy anything for the baby, I also post on my neighborhood listserv to see if anyone has one to sell. We near teo great Value Village locations, so I also try to any household good second hand, as well as baby clothes and clothes for myself. If you knew me, you wouldn't guess my wardrobe is mostly second hand. In fact, a co-wrker recently asked me if I could take her shopping b/c she liked my clothes I usually don't brag about shopping at thrift stores though... b/c I find that many people in this area are not keen on the idea.

[Anonymous]

OP, I'm like you--already exhausted those no-brainer expenses, or never had them (Starbucks, salon, eating out)...

I recently quit my job, dropping our income by 50%. Child and taxes were about 40% of that so I guess in the end it dropping it by 30%. A few things I do:

1. Every Wednesday I look at the grocery store circulars and see what's on sale and make my grocery list. I try to shop without the kids and when I'm not tired/hungry (less impulse buys);
2. I don't buy any books and I'm trying to stop my husband from buy them. I take the kids to the library once every week or two and we get books, CDs, DVDs.;
3. I buy the kids' clothes once the season has started and stock up at the end of the season. I have not but much for fall yet, but already notice the markdowns;
4. My kids only have 2-3 pairs of shoes for each size--1-2 sneakers, 1 pair of boots in fall/winter, 1 pair of sandals in spring/summer, maybe a dress shoe or a loafer style, if needed;
5. I switch between Comcast and Verizon when a better deal is offered;
6. We do lots of picnics at the playgrounds--bring our own food, let the kids play;
7. I put EVERYTHING on my Discover Card, then use the points to buy gift cards (used for shopping or as gifts for people) & I pay off the credit card every month;
8. Car insurance: I dropped collision on both older cars (1994 & 1998), raised the deductible (I won't put in a claim for less than $1K anyway). I plan to shop my insurance a bit but haven't done so yet;
9. I'm clearing out the house and selling things on Craigslist;

That's all I can think of writing at the moment...

[Anonymous]

Anonymous wrote:I don't mean this harshly, but where is your money going? Is it all tied up in a big mortgage? Or possibly, are your incomes on the low end for DC?

You know this, but it comes down to making more money and/or spending less.

Yes and yes. Largeish mortgage in relation to our non-profit salaries, and daycare. Before we had our child, we considered ourselves to be doing quite well for our age.

[Anonymous]

Is there any possibility of either one of you doing some side work on a consulting basis? I started doing so this year, thinking NO ONE would ever hire me (I have never done any kind of consulting before at all) - I basically just offered the service that I provide at work every day to private clients, and made myself a website advertising it. By January (I started this in early Sept) I will have made 20k based on the contracts I have now, even if I don't get any more clients. Once I pay taxes on the money and reimburse myself for my start up costs like the website, I will have an extra 10k in my pocket at least. The experience hasn't been as smooth as I would have liked in terms of forcing myself to sit home and work at night on stuff after a long day in the office, but I'm really grateful for the extra income.

[Anonymous]

Michelle Singletary proposed a 21 day Financial Fast in an article earlier this year:
http://www.washingtonpost.com/wp-dyn/content/article/2009/12/31/AR2009123103495.html

I thought she had a few practical good ideas

As you approach the holiday season think about how to manage holiday spending. Possibly start purchasing gifts for daycare teachers now? Doing gift exchange with family members in lieu of a gift for each.

For children's clothes (I have 3), I make a list of the big things we need for each season.
Snow boots, winter coats, snow pants, hats ,gloves, rain boots, rain jackets, halloween costumes, Christmas clothes, easter clothes, etc etc,

I keep the master list with me along with where I am on making sure we have these items covered. The rest of the items I will get hand-me-downs / consignement sales.

For Halloween last year, I made my son's costume, purchased my daughters at a consignment sale and reused a previous costume for the baby.

We menu plan for the week - bring left overs in for lunch (maybe 2 times a week)
And we eat mostly vegetarian - probably 5 nights a week.
Tofu / Black Beans / Pasta / Veggie Burgers / Couscous / Lentils / Chickpeas

This is a step change in grocery bills vs where we were not menu planning (translation - what are we going to eat - hmmm it is late - can you go get Chicken OUt - $25 later we have dinner vs. $8 later - multiply this out to a few times a month)

Good luck!