Sharon Marchisello's Blog, page 3
April 12, 2021
Countdown to Financial Fitness: Absolutely Necessary Expenses
April 5, 2021
Trimming Necessary Expenses, Part II
In preparation for the release of the audiobook version of Live Well, Grow Wealth, I'll be sharing excerpts each week on this blog.
This excerpt is from Chapter One, Live Within Your Means. I suggest categorizing your expenses as absolutely necessary, necessary but reducible, discretionary but important, and totally unnecessary. This post discusses necessary expenses such as groceries and household services.
Are you paying someone else to perform tasks you could do yourself? For example, mowing or fertilizing the lawn, cleaning the house, walking your dog? If so, perhaps you can realize some savings there. And speaking of a lawn, you can save money on water and fertilizer by letting some of the manicured green area go natural, planting drought-tolerant ground cover, or even paving it over.
Groceries, too, may seem like an uncontrollable expense. What can you do about the price of milk? My mother used to peruse the grocery ads, circling the best sale prices at each store, and then make the rounds. She was a housewife living in a small town where distances were not great between businesses; most people do not have time for this. Compare the regular prices of the items you purchase most often, and then choose the store with the best overall prices and service for your main shopping. By frequenting one establishment, you'll be more in tune to sales and thus be able to take full advantage when they happen. If your grocery store has a free frequent shopper program that offers discounts, sign up. But keep an eye on sales offered by competitors so you can pick up bargains when that store is on or near your route.
Menu planning and organization are essential to saving money on groceries. If chicken is on special this week, prepare your family's favorite chicken dish; why buy hamburger at full price? If you're planning to cook a perishable item right away, consider a "manager's special" that has been "reduced for quick sale" because it's nearing its expiration date. But if you have no immediate plans for that item in your menu, forgo the bargain, because chances are, it will rot and stink up your refrigerator.
Work in some meatless meals if you can convince your family to try vegetarian cuisine. Lower-cost meat substitutes can anchor a balanced meal.
Avoid purchasing junk food which often consists of expensive empty calories. And if you have the time and ability to cook from scratch, stay away from pre-packaged convenience foods as much as possible.
Stock up on items you use regularly when they are on sale, especially non-perishables like canned goods, dried pasta, and paper products. With proper timing around specials, you can avoid ever having to pay full price. Buy fresh fruits and vegetables when they're in season and incorporate them into your menus. Freeze extra packages of meat, and make note of the date. Don't waste food by buying more than you can use or store safely, or by stashing it where you can't find it until it has spoiled. Label leftovers and serve or recycle them promptly. If your family is averse to eating leftovers, avoid them by learning to prepare less food at mealtime.
Know what is in your refrigerator and on your shelves to keep from re-purchasing items you already have, and to ensure everything gets eaten while still fresh. When you stock up on items you already have, group them together and store the new behind the old, so you'll use the item with the oldest date first. Keep a grocery list in a convenient location—and take it with you when you go shopping—so you don't have to dash out to purchase a needed staple in order to finish cooking dinner.
Shopping on a full stomach and sticking to your list will help you avoid the temptation to buy unneeded items, especially those placed strategically beside the cash register. Accepting a tasty sample and a coupon from a salesperson does not obligate you to buy the product. If your spouse or children have a habit of succumbing to temptation, leave them at home when you shop.
Pay attention to package size to ensure you're comparing prices accurately. One brand may appear cheaper, but the package may contain less product. Some store labels include a price per ounce, or per unit, to help with these decisions. A calculator can be a useful tool if, like me, you have trouble doing the arithmetic in your head. And try to remember what price your items were marked when you arrive at the register. Write them down if necessary. Some stores will give you an item free if it scans incorrectly. That scenario rarely happens, but you may miss an opportunity if you're not paying attention.
Coupons play a role in saving money on groceries. Some stores will even double manufacturer's coupons up to a certain amount. But before using a coupon, compare the price of competing brands, particularly the store brand. Sometimes the coupon provides the better deal, especially if it can be doubled, but often the store brand is still cheaper. If the food tastes just as good, why not buy the lower-priced item instead? Some store brands have a satisfaction guarantee; if you buy it and don't like it as well as the name brand, the store will refund your money or replace it with the name-brand product. Only use coupons for items you really want to try, or were planning to buy anyway. Otherwise, you're spending more money instead of saving it. (Why do you think manufacturers offer coupons in the first place?)
Rebates are another way to save money on groceries, as well as on other household goods, but sometimes, they are more trouble than they are worth. With a coupon, you know at the point of sale whether it will be honored; with a rebate you have to trust there is nothing in the fine print to disqualify your application after you've jumped through all the hoops, used the product, cut out or soaked off the UPC label, mailed in the original cash register receipt, and waited six to eight weeks. Some companies allow you to submit rebate applications online, which takes pain and guesswork out of the process.
Another way to save on groceries and other items is to belong to a discount warehouse store, such as Costco, Sam's, or B.J.'s. Contrary to popular belief, you don't have to buy everything there in mass quantities. I remember telling a neighbor we'd joined Costco and he remarked, "You don't seem like the type to buy fifty pounds of potato chips." While some products are sold in bulk, or in larger quantities than you'll find in a grocery store, some can be bought individually—furniture, name-brand clothing and accessories, jewelry, appliances, electronics, tools, household goods, pharmaceuticals, alcohol, many grocery items—and the quality is often quite high.
But don't assume because a product is sold in a warehouse—or outlet mall, or other "discount" store—that it's the best deal. Sometimes an item can be purchased at your local grocery store for less, especially on sale and/or with a coupon. It's always important to compare prices. Also, warehouse stores charge annual membership fees, so if you join, make sure you'll shop there enough to offset the cost. Before joining, visit with a member or ask a store employee if you can come in and have a look around, to determine whether a membership will really benefit you.
Plan your purchases for items such as clothing, school supplies, and bedding to take advantage of seasonal sales or sales tax holidays. Consider shopping online if free shipping is offered. (But don't buy something you don't need just to bring the total order amount high enough to qualify for free shipping.)
Dry cleaning is another area where you may be able to reduce expenses. My mother refused to buy a garment if it wasn't washable. Her advice is not practical for everyone, but do consider the cost of cleaning and maintaining your clothing when you purchase it. I bundle my dry cleaning to take in a couple times a year, and look for coupons that offer a percentage discount if the total is over a certain amount, or a set price for ten items, thus lowering the average cost per item. If you wear a uniform or other work-related garment that must be dry-cleaned regularly, check around for special pricing. Many dry cleaners offer discounts for military personnel, law enforcement, or airline staff.
Ask the price when you drop off your items, and let the dry cleaner know about any coupons you possess or discounts you are requesting, to ensure they will be honored. I have friends who routinely drop off their dry-cleaning without asking what it will cost, and then just pay whatever bill is presented without question. I always ask for a quote up front, even though some dry cleaners don't like to give it. One place I went to charged extra for silk, extra for wool, extra for pleats, extra for each color in a garment. I never did find out what type of fabric would qualify for standard pricing; everything I ever brought them incurred a surcharge. It's best to know about those hidden costs before you agree to the cleaning, so you can negotiate or shop around.
Whether you're dealing with a dry cleaner, a cell phone company, a cable or internet provider, a grocer, an airline, an insurance company, you can save money by asking the right questions and insisting on an accounting of what you're paying for, preferably before you agree to buy. Take advantage of the fact that there is competition in most of those industries. Don't be afraid to take your business elsewhere if you're not treated fairly.
To learn more, read Live Well, Grow Wealth by Sharon Marchisello.
Countdown to Financial Fitness: Trimming Necessary Expenses, Part II
March 29, 2021
Trimming Necessary Expenses, Part I
In preparation for the release of the audiobook version of Live Well, Grow Wealth, I'll be sharing excerpts each week on this blog.
This excerpt is from Chapter One, Live Within Your Means. I suggest categorizing your expenses as absolutely necessary, necessary but reducible, discretionary but important, and totally unnecessary. This post discusses necessary expenses such as utilities and gasoline.
At first glance, the category labeled necessary but reducible may contain expenses that are fixed; indeed, once you receive a utility bill, you usually cannot negotiate a reduction in the amount unless there's been an anomaly. But look for ways to reduce these bills in the future. Tiny changes in your energy consumption behavior can make a difference over time. Shrinking your carbon footprint and preserving the environment go hand in hand with saving money on utility bills and thus reducing your financial footprint as well. Take shorter showers, and if you belong to a gym, take some of your showers there.
Fix leaks promptly. Don't use the toilet as a trashcan. Don't leave the water running while you brush your teeth. Unplug or turn off appliances and lights not in use (including cords and chargers plugged into an outlet but not connected to a device). Install timers and thermostats. When the weather is mild, open a window instead of turning on the air conditioner. My husband and I halved our electric bills (compared with what they had been for the previous owner of our house) by adding screens and installing an attic fan, so we don't have to run the air conditioner in the shoulder seasons.
Don't leave windows and doors open when the furnace or air conditioner is running. As my father used to say, while I was letting the cat hover in the doorway deciding whether she wanted to stay in or go out, "Shut that door! We're not heating the whole neighborhood!"
When heating your house in winter, don't keep it so toasty you can wear shorts. Put on a sweater and some warm socks and turn that thermostat down. Every degree you can stand to push it down will shave dollars from your bill. Same thing goes for air conditioning in the summer. It's hot outside. Wear your summer clothes inside; why turn your house into a deep freeze? Not only will you save energy, but you'll stay healthier, as your body won't have to cope with extreme temperature changes.
In some areas, certain utilities have been deregulated—gas, telephone, cable, internet—and thus there are multiple providers competing for your business. Keep your eye on promotions offered by competitors, and ask your provider to match them. If you're not happy with your service or the response to your request for a lower rate, consider switching if the competition offers a better deal. But beware of limited-time promotions where the savings are short-lived; the new provider's regular rate may not be any better than what you currently pay, and the service could be inferior.
Gasoline may seem like an uncontrollable expense, especially if you have to commute a long distance to work. Prices shoot up and down at the whim of the oil companies. Pay attention to gas prices; while I don't recommend driving out of your way to fill up at a cheaper station, try to find the one with the best price along your usual route. Applications such as Gas Buddy can compare prices in an area and direct you to the best option. Can your car run as well on regular as on premium? Many cars do. If so, you’ll save ten or even twenty cents a gallon. Some stations offer discounts for paying with cash instead of credit; some locations, such as Kroger, offer discounts at the pump with affinity cards. If you belong to a warehouse club such as Costco or Sam's, that store may offer lower prices on gasoline, so plan to fill up when you do your shopping there.
Avoid unnecessary trips by combining errands. Some errands can be eliminated altogether with a phone call or an email. Carpool, bicycle, walk, or take public transportation when it makes sense. Does your employer allow telecommuting?
Drive conservatively: you consume more gas at excessive speeds. Charging up to a traffic light and then slamming on your brakes wastes fuel. Clean out your car; no use hauling around that bag of fertilizer for weeks after you bought it because you were too lazy to take it out of the trunk.
To learn more, read Live Well, Grow Wealth by Sharon Marchisello.
Countdown to Financial Fitness: Trimming Necessary Expenses, Part I
March 22, 2021
How to Reduce Discretionary Expenses
In preparation for the release of the audiobook version of Live Well, Grow Wealth, I'll be sharing excerpts each week on this blog.
This excerpt is from Chapter One, Live Within Your Means. I suggest categorizing your expenses as absolutely necessary, necessary but reducible, discretionary but important, and totally unnecessary. This post discusses discretionary expenses.
Chapter Two will delve into deriving the most value from your money and deciding what discretionaryexpenditures bring you the most happiness. But if you're spending more than you earn, this category is a logical place to look for reduction. Do you subscribe to magazines or newspapers you never read? If so, cancel them.
When you plan to leave town, do you fail to place a vacation stop on your deliveries and ask that your subscription be extended? Do you buy books or movies you could have checked out of the library? Do you watch all those premium cable channels you're paying for?
Does your calling plan require you to pay extra for features you don't need or use? Contact your provider or check out a different one to see if there's a less expensive plan that suits your needs. Are you paying dues to a country club or gym you rarely visit? If so, be honest with yourself and drop out.
When you travel, do you buy souvenirs that end up in the next garage sale? Do you exchange gifts with people just because it's expected? (And then later re-gift what you received, knowing your friends will do the same?)
Are you paying for a storage facility to keep "stuff" you'll probably never use or might have even forgotten about? Why not de-clutter and have a garage sale, or make a donation to charity, saving yourself the monthly facility rental bill?
Do you over-pack when you travel? Years of working for an airline and flying standby taught me to pack lightly, rarely taking more than will fit into a small roll-aboard suitcase. (And this includes packing for a cruise.) Pack light-weight, washable outfits that can be mixed and matched and worn with the same pair of shoes, and wear your bulkiest items on the plane. Not only will you save checked luggage fees and tips to porters and bellmen, but packing lightly will enable you to maneuver the public transportation system at your destination, instead of hopping into an expensive taxi. (And some taxi services even charge an additional fee for each bag.)
Can you let more time lapse between haircuts, coloring, manicures, pedicures, massages, car washes, professional cleanings? Instead of taking the kids to a movie every weekend, can you rent a video and serve microwave popcorn once in a while? Do you have to go out for lunch every day, or can you brown bag it, at least sometimes? Can you make coffee at home instead of buying a latte at the drive-through? The point is to find areas you can cut without compromising the quality of your life to an unsustainable level.
To learn more, read Live Well, Grow Wealth by Sharon Marchisello.
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Countdown to Financial Fitness: How to Reduce Discretionary Expenses
March 15, 2021
Countdown to Financial Fitness: Totally Unnecessary Expenses
Totally Unnecessary Expenses
In preparation for the release of the audiobook version of Live Well, Grow Wealth, I'll be sharing excerpts each week on this blog.
Today's excerpt is from Chapter One, Live Within Your Means. I suggest categorizing your expenses as absolutely necessary, necessary but reducible, discretionary but important, and totally unnecessary. This post defines totally unnecessary expenses.
To build your confidence and produce instant results, start with the low-hanging fruit. If you're paying late fees or excess interest because you didn't make a payment on time, you need a better system for managing your bills. Not only does it hurt your credit rating, making it more expensive or more difficult for you to borrow money in the future or even find employment, you're wasting money that could be better spent on something you need or enjoy.
Most creditors allow you to set up automatic payment arrangements, to deduct the balance you owe from a checking account or charge it to a credit card on the due date, so you'll never have to worry about late payments. If you do enroll in auto-pay, make sure you keep enough money in the specified account to cover these payments so you won't be assessed a returned check fee or other penalty—another unnecessary expense. Perhaps an email reminder from the creditor will work better for you. Or maybe you set up a special folder, kept in a prominent place, for organizing bills. Be familiar with the due dates, so if a bill gets lost or misplaced, or an email reminder is accidentally deleted or ignored, you can contact the company or go online and make your payment on time. If you're planning to be out of town when your statement is scheduled to arrive, contact the creditor, have someone handle the payment for you, or set up an online payment to occur just before the due date. Whatever your system, just make sure you use one that works, so your bills are always paid on time, your checking account is never overdrawn, and you never charge over your limit. If your outgo numbers are so skewed that you have to negotiate with your financial institution to balance your budget, then do it.
Traffic tickets, parking violations, library fines, etc., are all categorized as unnecessary expenses that add no value to your life. Not much you can do about them once incurred, but you can learn from your mistakes and try not to repeat them. If the traffic ticket is a first offense, investigate the possibility of attending traffic school or doing community service to have it removed from your driving record; otherwise, you'll keep paying for it through higher insurance rates.
My husband takes issue with my listing "library fines" as an unnecessary expense. If he's unable to renew a book he has not yet finished, he'll keep it a few extra days and pay the fine. He considers it renting a book he wants to read but doesn't want to buy. University students have been known to check out textbooks and keep them for an entire semester; the overdue fine is most likely much less than purchasing the book, even used.
A similar case could be made for incurring a parking ticket to keep from being late to an important job interview. It's your list; if you're honest with yourself, you'll be able to identify expenses that can be trimmed or avoided without compromising your values.
Some people put vices, such as smoking or gambling, in this "unnecessary expense" category. If you did that, maybe the habit doesn't give you enough pleasure to justify the cost. Think of the money you can save by giving it up, and work toward that goal. Motivate yourself by setting aside the money you would have spent (for example, for a pack of cigarettes or a lottery ticket) and watching it grow.
To learn more, read Live Well, Grow Wealth by Sharon Marchisello.
