I remember when I was learning to drive, my father always taught me to find the least expensive gas. He mentioned how it really adds up over time to just stop wherever and overpay on a commodity like fuel. From that moment forward I felt anxious if I didn't know where to find the inexpensive gas. Then I thought about it and did what I always do when I have anxiety - math.
I looked up the difference in prices at different stations in the area, and it was generally around 5 cents. I knew my average fill-up was around 15 gallons. That's around $0.75 per fill-up. Even if I filled up weekly (nowadays I live a mile from my office so it's more like monthly) I would save about $3. Maybe $39 over the year. I realized there was no point in having this information occupying my mind. If I need gas, I'll pay an extra $0.05 per gallon to get it at my convenience. That said, I have a Costco membership and Costco is right next to my gym so I almost always fill up there because the difference is a little more and it's not out of the way... but I no longer let that fuel anxiety live rent-free in my head.
I was thinking about this recently and thought I'd share a few more frugal habits that don't necessarily save money.
- Buying in Bulk. I know I mentioned my Costco membership, and I am a big fan. That said, we've got a couple of kids in my house and the savings is worth it on some items. Buy as I learned from an early experience my wife will never let me live down, we don't necessarily need a 3-pack of 44 oz. ketchup bottles (in case you were wondering, the ketchup bottles moved with us twice before we finished all of that).
- Driving to Different Stores for Sales. Don't get me wrong, I love buying things on sale. I also never skip shopping around for bigger-ticket items (we've been in the refrigerator market for months). But if you're driving to different stores and spending an entire Saturday getting things that could have been acquired in one store to save $13, do a little math on the gas and vehicle wear and tear to find out how much you're saving. Then ask yourself, "is my time worth that much?" Maybe sometimes it's worth it, but don't get caught up racing around to save a few bucks without getting any value for your efforts!
- Buying Something Because It's On Sale. Chances are, if you didn't go to a store specifically to buy an item, it's not 60% off. It's 100% a waste of money. This is impulse buying masquerading as smart shopping. Set this rule: only buy what you came for. If you leave the item, wait a couple of weeks and realize you do need it... Go back and get it. I'd bet most of the time, you forget about the item altogether.
- Changing Your Own Oil. If you don't know how I have good news: you don't have to learn. It costs me about $80 for an oil change and $75 for the supplies to do it myself. $5 to not have to get under my car and take away what little time I have to enjoy with my family is pretty easy to spend.
- Saving Stuff to Sell. I think also in this category is savings recycling to return for $0.05. I do agree that you should recycle!! We all saw the Seinfeld episode, the math just doesn't work. The same goes for storing stuff you don't need in your house to sell later. Either sell it right now online or get rid of it.
- Buying Cheap Clothing. I'd recommend checking out our friend at Bards Clothing for more on this. I'm not recommending everyone buy custom clothing for every occasion, but it's amazing what fast fashion has done to our mindset. We are destroying our environment from waste in this industry. For example: I used to bargain shop for shoes. I'd go to big box stores at the mall and find dress shoes for $50-$80. They'd be destroyed in a year. These days, I generally spend $250 or so on dress shoes. I bought a few pairs 4 years ago that are still in great shape and I get compliments on them all the time. As a bonus, when the shoes wear out, they can likely be repaired or re-soled. Buy quality, take care of it. Your grandfather would likely be proud.
Now what about good money savings habits? Yes, of course, there are some things that you can consistently to save money that do work well.
- Buying Cars Used. I am 38 years old and I've never bought a new car in my life. Why? Because most cars last 150,000 to 200,000 miles. Why would I pay $40,000 for a new car when I can get a car with 10,000 miles on it for $30,000? That's 25% savings for only 6% of the car's usable life. Used cars often come with good warranties and are generally as safe and full of features as their brand-new counterparts.
- Always Pack Lunch. Our office is right in West Hartford Center. We are surrounded by great restaurants. That said, an average lunch at these restaurants is $15 or more. Even ordering less expensive options for delivery costs upwards of that much (have you looked at all the fees on delivery apps?). That could run $300 monthly, or $3,600 per year using a low estimate. For $300 per month, I can easily eat 3 very high-quality meals every day without skimping if I do all my shopping at the grocery store and cook my meals.
- Use a Sinking Fund. A sinking fund is a fund set up to pay future expenses you are planning to incur. It helps with budgeting because it keeps money from building up in your checking account giving the illusion you have more than you need when in reality that surplus is accounted for with future expenses. I often say to use one for regular, non-monthly bills like insurance or car taxes. Figure out the monthly amount and make that one monthly payment. Use another for discretionary expenses like vacations, concerts, gifts, and other things that you plan on spending money on. There's a bonus benefit of never overspending on wants because you know how much you have put aside. If you use a credit card for these purchases, make sure your credit card balance never exceeds your sinking fund balance and you'll never pay interest.
- Mind Your Utilities. Yes, I am a dad. No, I'm not just finding another excuse to complain about the thermostat. Utilities are not optional bills. So long as you have to pay a bill, explore ways to save. I find it astonishing that more people haven't explored solar for their roofs (shout out to West Hartford Solar). Even if you don't want to go solar, in CT you can choose your energy supplier and price shop for the same electricity you're already using. Making sure you have no running water, leaky toilets, uninsulated windows and doors, etc can save a lot of money and it takes very little time to stay on top of these things.
- Buy For Life. Similar to buying cheap clothing, try to avoid buying things that will likely be thrown out soon. Take time to shop for quality items that will last forever. You won't be going back to buy the same things as often.
I hope this is helpful. There are a ton of exceptions to all of these, as all buying decisions are personal. If you have ideas that should be shared, send them our way!