Monday, July 21, 2008

Budget Saving Ideas

Here is a variety of ideas, in no particular order.

1. Clean out the closets, the basement, the garage, the attic and all the overly crowded rooms and sell some stuff on craigslist.com or some similar website. I have been astonished to make $3000 in the last few weeks as I have been selling off stuff to get ready to move.
Double benefit here: not only do you raise some money to pay off debt or improve your emergency fund, but when you realize how little you can sell stuff for, it makes you more conservative about buying new stuff in the future.

2. Take a hard look at your housing costs and consider moving to something less expensive, particularly if your housing expenses exceed 30% of your gross income. This includes the mortgage payment, insurance, taxes, utilities, upkeep, landscaping, housecleaning, and any other expense required to keep up the house. Yes, it is not a great time to sell, but this is offset by the fact that it is a great time to buy. So what you might lose on the selling end can be made up for on the buying end.

3. If selling the house is out of the question, consider renting out one of the spare bedrooms. Several clients I have suggested this to in the past were quite horrified. However, their cash flow was tight enough that they decided to give it a try. All ended up being pleasantly surprised. One rented to an airline pilot who was rarely in town. Another rented to a student from a town just 80 miles away, so he went home every weekend. When he was in the house, he was always studying and very quiet. Another rented to a businesswoman who travels internationally. She really just needed a place to keep her clothes as she was rarely in town. Another rented to a woman with a small child who traded a lot of babysitting for part of her rent.

4, Most people who get serious about it can cut their grocery store bill by 50%. There are a number of books on the market that explain the details. One of the best is "the grocery store game."

5. If it's just a short period of time, you can reduce your clothing budget to nearly nothing by buying things from goodwill and resale shops or even yard sales. It is amazing to me how new clothes have come almost an entitlement item to many people. This especially applies to shoes for many women. It is amazing to me that some women believe they have to have a pair of shoes to match each outfit.

6. For someone who buys lunch in a restaurant every day, there is a huge savings from bringing food from home. And the big side benefit of that is typically you will eat much more healthy as well. I never have time to make a bag lunch in the morning, but I grab the ingredients and take them with me to work. This has gotten to be such a habit for me, that I get aggravated with myself on the days that I forget to grab some food to take with me to work. I much prefer what I bring from home to what's available to buy close to my office.

7. If you have kids, there are a million ways to save money on entertainment. When my kids were little I was newly divorced and quite broke. Our all time favorite entertainment was to go to a cemetery about a mile away. We would take bicycles, skateboards, in-line skates, and walking shoes and all have a blast together as a family.

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