As you may have known, I’ve always been a frugal guy and had a habit of looking for deals in pretty much everything I’ve ever sought to purchase – however, in the past year and a half my consumer “Spidey Senses” have been tingling harder than ever, creating a sense of urgency in me to seek out and apply “super-uber-frugal” practices in order to slash my spending to the absolute frickin’ bone… what on earth brought on this sudden heightened sense of tightwad behavior you may ask? Like Peter Parker, was I too bitten by a radio active spider, only by one raised in lab where genetically altered “extreme-coupon-clipping-bargain-hunting” arachnids were being raised by crazed yet thrifty housewives in white lab coats?
I wish! How cool would that be? Crazy ass housewives in lab coats… I digress. No, it was nothing that weird/crazy/freaky, not even a bit – the real reason I’ve become obsessed in saving every single cent possible is a grounded far more in reality, and it’s simply this: I had the sudden and startling realization that if I didn’t get my act together, I’d still be paying off my mortgage until I was in my late 60’s, a prospect that scared the living shit out of me and caused me to break out in the hives that I originally mistook for radioactive spider bites! Here’s how it went down…
Flashback: When we bought our condo just over 6 years ago we made the bold decision not to dip into our savings for a down payment, but to keep that money tucked away in it’s safe mutual fund home and finance the whole $240,000 purchase price over 35 years instead, and why not? As we all know, interest rates were at record lows and we could get a mortgage with easy terms; even better, we knew that by paying bi-weekly instead of twice a month we would shave 7 years off the amortization right off the bat, so the 35 years was already whittled down to 28 years with nary a penny even spent yet! At the time it all seemed like a no brainer, and since we were eager to own our own little home, that’s exactly what we did.
Fiscally (Un) Educated
After a couple of years into home ownership, (and believing we were fiscally savvy mortgage destroying rock stars) interest rates continued to plummet so we decided to pay a $9,000 penalty to refinance at a considerably lower rate. In addition we juggled a couple of things around, upped our bi-weekly payments a hundred dollars and were pleased as punch with ourselves by ultimately reducing the mortgage down to (what we believed was) a 15 year amortization, which seemed worlds away from the 35 that we originally began with; so far so good, right? And so on we went for the next couple of years, aimlessly making our payments every two weeks, assuming we were crushing our debt and diminishing our mortgage in leaps and bounds… unfortunately, this wasn’t really the case, and on the 4th anniversary of our mortgage reality came crashing down in the form of our annual statement. It revealed 2 things that blew my mind; first, it turned out for all our fiscal wrangling and refinancing etc. after 4 years we still owed $200,000 of the original principle, and second, after 15 years we’d still owe something like $80,000! Holy Cow! Somewhere my math had gone horribly wrong…
Knowing we didn’t want to be stuck with a mortgage for the rest of our days, we decided to get serious about tackling this debt, and do whatever we had to so we could reduce as much of it, as fast as we could. Long story short, about 6 months later were able to sell a piece of land we owned, that, despite being an “investment property” we’d nurtured for 5 years, wound up losing us $30,000. However, liquidating it did produce $61,000 of badly needed cash and because we were fairly close to our anniversary date we were able to apply it all to our principle with no penalty. We added in our tax returns that year, and doubled up on a few payments, and before we knew it, (which was actually about 10 months) our mortgage had shrunk to $126,000! This number seemed far more manageable than before, and so we made the commitment to, double up on our mortgage payments (which we can do without penalty) whenever we could so as to keep driving that debt down as quickly as possible. But we also knew that in order to do this, sacrifices would need to be made in how we spend our household income.
In order to make my new quota, I focused with steely precision on any and all ways to cut my household costs to make up the extra 10K I figured we’d need (on top of our regular payments) that year (and without giving up RRSP’s) and this money could not include our tax returns. We had (and still have) our work cut out for us, but we are doing well; it’s been about a year and a half and our mortgage continues to shrink and is currently at $81,000, with the goal to have it totally done within 24 months.
So where did we cut? What are the things we did to really save money? The following list highlights the best strategies (both old and new) we used to cut costs, get the best value for our dollar, and to ultimately grow our cash to the point where we hit the targets we need to hit, and on a consistent basis. And while some of the strategies may seem a bit extreme, or that they really don’t save that much, remember that we have a massive debt to get rid of, and so for us, every bit counts – no matter how small – and we’ll attack it like a pit bull in a meat locker until it’s all gone… how’s that for a visual? Okay then! Here are my tips…
19 Frugal Habits that help us save a ton of money so we can crush our debt
We don’t have cable, satellite, or whatever pay as you go entertainment, and haven’t for years, which has saved us a small fortune. I know people who spend $200- a month (after tax dollars) on this stuff –it’s too much! If someone feels it’s vitally important to have a cable package, I suggest get the very best basic one, but stop paying for channels you don’t watch. Having none the best option, which brings me to # 2…
We only watch borrowed D.V.D.s – yep, we don’t buy or rent these, but always borrow them from the library or from friends. Spending $20+ to buy something that will only be watched a couple of times, or paying $5+ each to rent movies from a video store adds up fast, so we don’t do it. If I were to pay for the movies I watch I’d easily spend $100- a month, but I don’t. Go free! Or, if you must have movies available 24/7, you can always do Netflix.
I read books – they’re free from the library, or, if you’re like me and like to own your books, go to the thrift stores/second hand bookstores to buy them cheap. If you must have something brand new, get it from amazon.ca but make sure you get free shipping. $20- spent on a book provides 20 – 30 hours of entertainment, plus (depending on the book) you might learn something; even if it’s “50 Shades of Grey”…
I’m always on the lookout for coupons/deals that allow us to do activities or go to shows for half price or on deal; for example, our local hockey team has a deal that if they have a home game during the week, a set amount of tickets for that game (I think it’s 100) can be purchased first thing Monday morning for $5 – each, something that’s worth getting up a bit early and waiting in line for. Tuesdays at the movies is always cheap, but bring your own candy
We’ll often go to the park for a walk; on nice days we sometimes pack a lunch and make a day out of it
We rarely eat or drink out at restaurants or pubs – instead we buy quality ingredients and cook restaurant quality meals at home, whether it’s just us or if we have friends over and entertain; either way, I try to create a nice environment and make a bit of a date night out of it. If this sounds good to you and you want ideas on how to do this, just Google Jamie Oliver for the food, and random websites for inspiration and ideas. Board games are always a great addition
Substitute Food for Liquor; 10 beer at the pub plus tip = $75 – whereas 10 beer at home (no tip! Yippee!) = $22-… need I say any more?
8. I go to the grocery store Sunday morning between 8a.m. – 9a.m. and buy the “red sticker” (re: discounted) meat with 2 or 3 days left. I save a ton doing this, and freeze it all immediately. This is a great way to have good cuts of meat (including lamb shanks, boneless skinless chicken thighs, pork loins) at 20% -30% off. I try to get enough protein to last 2 – 3 weeks at a time.
9. Do as much of your vegetable shopping at farmers markets, but ensure you don’t just buy anything; buy only what’s on special and you can make out like a bandit. If they have discounted produce, check it out and see if it’s something you can get home and use quickly, or cook and freeze for later
10. I make soup from scratch once a week in the winter; it costs about $5- a pot (and uses up left overs) and we usually get about 10 good hearty meals out of it.
11. This is a new one I just learned; put your grocery receipt on your fridge to remind you of what you bought, and how much you paid. This is to stop you from letting food you buy sour and go to waste – by seeing that you paid for it is an incentive to use it up in a timely fashion… did I mention it will go in the soup?
12. Do I even have to mention this? Brown bag lunches and restrict your Starbucks to once a week… if you have to at all! And remember, a drip coffee will cost you $2.25, while a “triple non-fat-low-soy-double-pump-caramel-180-degree-chai-latte-no-foam-etc.” will always, always be over $5- and be gone twice as fast, every time!
13. Shop at Costco for the big items but ALWAYS, and I mean ALWAYS go in with a list, know exactly what you want, and don’t buy anything else; even when that sample person tries to temp you with their little paper cups full of hummus or pot stickers… STICK TO THE LIST, then RUN LIKE HELL!
14. I do: Buy greeting cards, napkins and other such sundries at the dollar stores. I don’t: Buy any of the other crap they have there (like key chains, anything that sparkles or kitchen utensils) because, well, it’s crap from the dollar store!
15. I know this isn’t for everybody but I have no problem taking returnable bottles out of the recycling bins in our condo, and returning them to the bottle depot. I won’t say I exactly “dumpster dive” (but I have from time to time) but I will say I’m absolutely stunned how many returnable bottles people throw out all the time and figure, hey, if they don’t want the cash, I’ll have it! I average between $40- and $50- each month this way, which, by the way, is around $500- a year tax free! I use this cash to fund the little things I need each week like bus fare, milk or, on the odd occasion (and if the haul was good) a nice bottle of wine.
16. I don’t usually get magazines, but when I used to, I always bought the yearly subscriptions. For years we got National Geographic at 80% off the cover price for years by doing this.
17. I never buy something new if my old one is still in good working order; my last car lasted me 13 years, my 42” big screen T.V. is 8 years old, my clock radio is the same one I had 15 years ago… if it ain’t broke, don’t waste money on a new one.
18. Having said that, when we do buy something we want, we never sacrifice quality, because quality will last, where cheap crap never does, and it actually saves us money in the long run. Sure, I can get a shiny new 42” big screen T.V. at Costco for $500- but why when mine still has lots of life in it? That $500 is way better used when paying down our debt.
19. My last tip is not so much about spending, but monitoring. The very first thing I do every morning (after I get my coffee, of course!) is look at all my bank accounts online to see how much I have, where my visa is at, when it’s due, figure out how much I can afford on this and that, etc. This is a critical snapshot that keeps me living within my means, and ensures I have the money I need to put towards my bills, and my debt. I can’t stress enough how important this daily step is as part of my financial plan.
20. I never, ever, ever impulse buy; instead, whenever I suddenly see something that I “have to have” I remind myself that I didn’t even know it existed 5 minutes ago, and then remove myself from it’s presence. And yes, the “removing” part is the hardest, but it can be done! So what do I do instead?
21. If I know I want to buy something, (clothes, an appliance, a toy, etc.) I give myself no less than 3 weeks to look for it in order to get the very best price. Case in point: I recently needed a new pair of jeans, so I’ve been poking around checking out where the sales are, when yesterday, POOF! The Bay had a “One Day Sale” on Calvin Klein Jeans for $29, instead of the regular $95… that’s $61- in savings! This strategy always ensures I get the best price on everything I buy. Speaking of which…
22. I only buy things when they are on sale. Period. Okay, not my Macs, because they actually don’t go on sale… do they? I did however get my I Pad accessories at half price!
23. I also buy lots of stuff at the end of a season for the following year; I load up on sunscreen in September, and Christmas wrap, cards and stocking stuffers after December 25th every year when it’s all half off regular price
24. And finally here’s the best tip of all for saving money: Ask the sales clerk for a deal, even if there isn’t one being advertised – you won’t believe how many times you can get an extra 10% or more off… just for asking for it!
Whew, it’s been a long post, and thanks to those of you who have stuck it through to the end; I truly hope you’ll find some value in these tips, they are what helped me sheer 120 K off my mortgage in just over a year and a half; if they can do that for me, just imagine what they can do for you! Thanks again, and happy frugality!
Readers; what are the very best money saving tips you’ve found that work for you? We’d love to hear about them!