Maintain vigilance for forgotten costs to be a budget ninja
In six days the no-spend challenge officially kicks off, and whether you are doing the challenge or not let’s use this month to get skeptical of all our spending.
Have you ever paid a year’s worth of $15 device insurance, long after the deductible would have cost more than the phone? Have you ever signed up for a “first month free” app and found two years later that you are still paying for the subscription but not using the service?
Even people careful with money can find ourselves with extraneous expenses that don’t benefit us anymore. Budget ninjas scrub their credit card and bank statements twice a year to find such savings. One such ninja wrote to me that she had done her semi-annual scrub and even she found $436 in annual savings from “subscriptions, computer hygiene stuff and software no longer being used.”
Former me would tell a story about how I don’t have the time to review the ways I am getting nickled and dimed. But that was untrue. The true concern was probably that savings gained in one place would just fly out the window somewhere else. Maybe digging even deeper, the real story was I didn’t trust myself.
This is why pairing this process with a no-spend month is magical. We can trust ourselves that savings will actually be captured. Heck, even if it’s just for other ways to spend that could improve quality of life, that’s a win.
An added advantage of spending time to save money is that many people spend time in stores as a pastime. Consider saving money as a replacement activity.
Not sure where to start? Here are 20 ideas:
■ Analyze recurring payments: Go line by line through your credit card statements and bank statements. You might see small expenses that you don’t even recognize. Research and get to the bottom of them. Then, if you are not using them (or could live without them) cancel!
■ Storage units: The average price for storage is $89 per month on a 14-month contract. Canceling it would result in a savings of $1,246. That might be worth spending a Saturday sorting, selling and giving away. And let’s be real, your storage bill might be closer to $250 per month.
■ Shop your car and home
insurance and inquire if your company has a safe driver discount program. I think it makes sense to shop it every 3-5 years. Every time we find savings.
■ Increase insurance deductibles on car and home insurance with newfound savings. Think about going from a $250 deductible to a $500 or $1,000 deductible. Pump the breaks on too much excitement because you also need to make sure you have a solid $1,000 in a savings account just in case — but that could save you $10, $15, or $20 a month!
■ Time to cancel the home warranty? I have talked a lot about starting a home repair reserve. Have you opened that savings account? Do you have a few thousand dollars in it? If so, you might be at a perfect point to self-insure for home repairs and ditch that monthly premium.
■ Grocery pick-up: There is a reason the milk is at the back of the store. Use grocery pickup or assign a spouse who can stick to the grocery list to handle all the grocery shopping this month.
■ Meal planning: It works. Every. Single. Time. Meal planning will stretch your dollar. It will make sure that you are not tempted to “just grab dinner” on the way home.
■ Checking account fees. Are you paying account fees because you are below the minimum balance or not following the direct deposit, ACH and debit card rules? Switch to a new bank or account type or make sure you meet the requirements for a free checking account. I have seen these amount to $7 - $14 per month.
■ Price a mortgage refinance. Ours closes next week. We spent a few hours total to get it done. In the end we will save over $150 per month.
■ Shop your closet. If you are tempted to buy new clothes, then take this advice from organizing and decluttering expert Megan Ludvinsky, owner of About Space Organizing and creator of a decluttering Facebook group with 65,000 members. “Pulling everything out of your closet (yes, even those hard-to-reach areas) will let you discover “old friends” (past items that you really loved that have fallen out of rotation) that have been formerly obscured. Try pairing them with “new friends” (closet staples that you always reach for) for a whole new look.”
■ Declutter your clothes and turn them into money. Ludvinsky recommends “My favorite saying when working with clients is “turn that stuff back into money.” When decluttering your closet, don’t forget about the resale value of your old clothes! Good condition/ still fashionable items that may no longer serve you can pull in some money locally on Facebook Marketplace or fashion exchanges. Or, you can print a packing slip from Thredup and TheRealReal (for designer labels) and send them off for a direct deposit!”
■ Make your own laundry detergent.
A reader recommended this. At first I was skeptical but a couple follow up questions has me all in. According to her it can reduce the cost to pennies a load. The ingredients are safe, and I will use this as a fun and learning activity with the kids.
■ Make your own body scrub. I learned this hack a decade ago and still chuckle when I see expensive body scrubs for sale. Go right now to your pantry and grab olive oil or coconut oil and some sugar. Pour some sugar in a bowl and the oil on top. Mix. Voila. You can even add a couple drops of essential oils and make it smell nice.
■ Do your own nails. This is a significant savings if you have a regular manicure or pedicure habit.
■ Inventory your pantry and freezer. Two readers recommended this, and I am taking on this task over the weekend. Make a list of everything in there, so when you are doing meal planning you can incorporate leftovers or ingredients. Our freezer is packed, and I am eager for a reboot.
■ Use the library. There are some books that I will always buy, including financial books and our kids’ chapter books. It’s just too stressful to worry about sticky fingers and the dog chewing up books left on the floor. Kindle and audio books are available at the library. Maybe this is the month to start checking that out.
■ Remove shopping apps from your phone. A reader is planning to do this for the month to remove temptation.
■ Stop scrolling. I will only use social media for financial inspiration or for sharing in our no spend Facebook group. You can also join us by searching for the group titled “Save10 No Spend Challenge.”
■ Unsubscribe from shopping emails. I did this a month ago, and just this morning realized that I had not visited one particular shopping site that I love since then. It used to be a weekly “browsing” after getting hooked by a compelling email.
■ Join a Buy Nothing Group on Facebook. This has been an emphatic recommendation for folks in previous no spend challenges. Ludvinsky concurs. “Not only can you place stuff you don’t want into much more beneficial homes (they will even come and pick it up!), you can get free stuff you actually will use. I just recently I acquired a zester and a meat chopper that I use weekly. I was super happy to delete both from my Amazon cart!”
Some of your savings might be one-time. Those are great additions to an emergency fund or even a post-covid vacation blow-out fund. I am most excited about finding recurring dollars. Every dollar that we eliminate in this process will be redirected into an automatic contribution to our kids’ 529 plans. Let’s take the $150 refi savings. If we redirect it in our daughter’s 529 plan, in 13 years that could grow to over $30,000! I’d say that was worth our time.
Sarah Catherine Gutierrez is founder, partner and CEO of Aptus Financial in Little Rock. She is also author of the book “But First, Save 10: The One Simple Money Move That Will Change Your Life,” published by Et Alia Press. Contact her at sc@aptusfinancial.com.