Welcome to a new weekly (or so) diary series on saving money and other personal finance issues! This is a place to ask for advice and to share your favorite money saving tip or financial advice. It all started with two diaries from the "Kossacks Under 35" series, the first that I wrote and a following one by kath25. Since there was so much interest in this topic, and it really doesn't apply to only under 35 folks, I decided to make it a weekly series. Thanks to willers for the title suggestion.
In order to be efficient about reducing your expenses, you need to first know where your money is going. I keep track of my checkbook, credit cards and most of my cash expenditures using Quicken. Then at the end of the year, I can summarize all of my spending by category and look at which ones I want to reduce. These are not just my biggest expenses, but rather the ones where I have the most ability to change.
At first in this series, I'd like to focus on one or two categories a week and share some of the ideas I've heard or used to reduce outflow and then hear what you have to suggest. I've got a poll below where I list most of the categories I use and I'd like to know where people would like to reduce their expenses. When you ask most people where in their budget they spend too much, the usual first answer is "food", so that's where I decided to start. I've collected the tips from the comments in kath25's diary I mentioned above and combined them with other ideas I've seen and summarized them here. Most suggestions fell naturally into into two groups with the rest tacked on at the bottom (can you tell I like categorizing stuff???). I'm sorry I'm not crediting everyone properly with their suggestions, let me just say there was a lot of really good advice given in those diaries:
Reduce/Eliminate Money Spent on Labor
- Cook at home instead of going out to restaurants. Cook large quantities at once and freeze the leftovers. Take leftovers to work for lunch. Here are some recipes folks posted or linked:
- Share the costs and work with others. If you don't live in a group situation, find friends who like to cook and get together once a month or so for a freezing party. Everybody cooks a big batch of something, and then you all share it out, freeze up the individual portions and voila, you have a varied menu for the next few weeks instead of eating the same dish over and over.
- Crockpots, rice cookers, and pressure cookers can all be easy ways to cook in bulk.
- Make coffee at home rather than buying it from the coffee shop. We drink Starbucks coffee that we make at home for 40 cents a (vente sized) cup. The rest that you pay in the store is all labor and convenience. Hot chocolate is easy to make in the microwave with milk and chocolate powder. For iced coffee, I like to make coffee ice cubes using freezer trays. They keep the coffee from getting too watery.
- Make your own bread in a bread machine. You can find one cheap in a thrift store or at a yard sale.
- Have happy hour or dinner parties at home with friends instead of going out.
- If your friends all like going to bars and restaurants, and you still want to socialize with them, limit your costs when you go by joining them just for happy hour (free food) and don't order alcohol (be the designated driver, they'll love you). If you want to join them for dinner, just come for the appetizer course. Let them know you are leaving early so you can just pay your portion of the bill and leave.
- if you really love fancy restaurants, go for lunch rather than dinner. They often have cheaper menu for lunch. Also, appetizers can be the best food value in fancy restaurants, you get a taste of the chef's skill but you don't get a huge portion you can't finish.
- If you do go out to eat, order a bigger sized dish and take half home. The incremental cost for the increased size is minimal. I have a friend who does this and actually asks for the "go box" when the food is served to her. By portioning out the part she is saving immediately, she reduces the likelihood of spoilage (no germs from her fork get into the dish) and she forces herself not to overeat.
- You can find some very cheap lunch deals which may be a lot easier than cooking at home: Taco Bell, Costco, and other pizza by the slice places can provide a filling lunch for a buck or so.
- Bring your own reusable cup when you buy coffee or soda. You can get a discount which can add up.
Reduce Cost of Supplies
- Buy in bulk. Costco has good quality at good prices, but you do have to have room to store the dry goods. But be careful of falling into the trap of "it's so cheap I must get it." It's a false economy to buy large quantities that you don't end up using before they spoil. For spices, if you buy large quantities, get together with your friends to share and trade.
- Buy from ethnic grocery stores. Shop where recent immigrants shop and you can often get produce, meat and bulk spices much cheaper than otherwise. You also may find great stuff you've never seen before. Don't expect to find many dairy products at most Asian markets.
- Shop the periphery of grocery stores: the outside aisles for produce, dairy, meat and bread and the tops and bottoms of shelf space less costly food items. Generic brands can vary wildly in quality. Try a small package before you buy the 10 lb box of pasta and find out it's inedible.
- Watch for sales on items you use regularly (cleaning supplies, pasta, etc.) and stock up when they go on sale. A really good rule of thumb is the more urgently you need an item, the more you will end up paying for it. Plan ahead so you don't run out of stuff that routinely goes on sale.
- Try different cuts of meat than you usually buy. Turkey legs can be very cheap and you can make soup stock from the bones. Some butchers will give soup bones for free (or practically free). Buy the fattiest ground beef and after you brown the meat, drain off the excess fat. You'll still come out ahead.
- Check out Big Lots and the dollar stores routinely. Their stock varies and you can get good quality stuff sometimes. Approach unknown brands with caution, however.
- You can grow your own herbs in a pot on a windowsill. A tomato plant or two can fit on the tiniest balcony. If you have room for a full garden, it can be a great source for fresh vegetables all summer. If you have even more room (and local zoning ordinances allow), you can keep chickens for eggs. You can find hints on freezing and canning lots of places on the web.
- Shop farmers markets for produce. Be aware these are not always the cheapest venues, but sometimes they are. The fresher the produce, the longer it will last in your frig, so the less you will lose to spoilage.
- Look for local fruit and nut trees on public lands that no one harvests. Make sure they really are yours for the taking before you start doing so, however. If you're in an urban setting, you also want to check with the grounds keepers to find out what chemicals they may have sprayed on the trees before you start scarfing down the fruits. Fennel, dandelions and other greens also grow wild. Be very careful about mushroom hunting, especially if you are a recent immigrant. There are very poisonous mushrooms here that look almost exactly like benign and tasty mushrooms in other parts of the world. At least once a year I read in the paper about a whole family being poisoned from eating wild mushrooms.
- Plan your weekly menu and then shop just for that stuff all at once. If you have lots of perishable ingredients on hand "just in case" you want to make some dish, you will end up losing a lot to spoilage.
- Check out the Sunday newspaper or this site for coupons and sales. Use these to plan your weekly menu. Clip out the coupons for items you know you'll use. Don't buy stuff just cause you "may" use it unless you are prepared to throw out old food.
- Drink water from fountains rather than buying bottled water (carry your own water bottle, but make sure it is washable and clean it often, bacteria can grow).
- easong had a great tip for buying pinot noir direct from the winery. Grocery Outlet, Trader Joes and Cost Plus can also be good sources for reasonably priced wine. In the bay area, we have a store called The Wine Club that has outstanding selection and prices, but this is not low end wine. Beverages and More can have good deals sometimes, but not everything there is a bargain.
- Snag sauce packets (ketchup, mustard, soy sauce, hot sauce, honey, etc.) from restaurants and use them at home. This is especially handy for stuff you use very rarely, but when you need it you don't want to buy a whole bottle.
Miscellaneous Suggestions
- Avoid junk food it's expensive and nutritionally vacant.
- Get a part time job where they feed you: working in the kitchen, hosting or waiting tables at restaurants, hotels or catering businesses. Starbucks has good benefits for even part time workers and if you can't give up your latte, this is a good way to reduce the cost.
- Graze on the free samples at Trader Joes, Whole Foods or Costco. The weekends are the best days for these.
- Hotels, car repair shops and other businesses often have donuts or cookies out for customers. You may be able to pick up breakfast on your way to work this way, especially if you charm the receptionist into not recognizing you day after day.
- Try to get a press pass to events where they are serving food. You can even dress up and try to crash large banquets or parties or weddings (even funerals) but that takes more guts than I have.
Don't forget good nutrition. When I was growing up, we had the rule that every meal had to have a protein source, a starch and a green vegetable. I try to follow the rule still. kath25 has some more good advice:
Make sure each meal contains protein and fat. Carbs are cheap, but they don’t fill you up. As a rule, each human needs about a half a gram of protein per pound of body weight, more if you are actively exercising. Fat helps you feel full, and is also important for absorbing vitamins and certain biological processes. Splash some olive oil on that pasta!
And check out shpilk's advice on adding a multi vitamin to your diet if you are skimping on food.