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Nomad Wallet

Travel More. You Can Afford It.

You are here: Home / Saving / 15 Easy Five-Minute Fixes to Save Thousands of Dollars This Year

15 Easy Five-Minute Fixes to Save Thousands of Dollars This Year

December 31, 2013 by Deia 13 Comments

This being the last blog post of the year, I feel it’s only appropriate that I write about something that often shows up in new year’s resolutions: saving money.

Save money quickly and easilyThese little tricks won’t take much time at all to implement and they can result in big savings with minimal effort. In fact, you can probably do some of these things before getting ready for the countdown party tonight.

 

Small expenses add up

Have you ever heard of the “latte factor”? It’s a term coined by David Bach, who wrote a best-selling personal finance book called The Automatic Millionaire: A Powerful One-Step Plan to Live and Finish Rich. The “latte factor” refers to a cup of latte, which doesn’t seem like a big purchase, but would add up to a large expense over time if you buy it every day. It’s a simple idea, but also a powerful one.

Benjamin Franklin's money-saving tip But if you’ve read my previous thoughts on saving money, you’d know that I hate having to think about it. I focus on my biggest expenses and have managed to save $20,000 in 1 year without a budget in the past that way. I don’t want to have to restrain myself from joining the line at Starbucks every morning. That would require a lot of self control and, even if I manage to do it, I’d be thinking about that latte all day. The next day, I might not be so strong.

I still save on little things. But instead of stressing out over lattes, I focus on other little expenses that won’t require me to put in much ongoing active effort.

 

Save money — the easy way

One awesome way to reduce spending is to save money on subscriptions and other recurring payments — the bills that come regularly like clockwork. Every little saving counts when you’re working with recurring payments. Even reducing one bill by $5 a week would save you $260 by the end of the year.

 

Entertainment and services

1. Cancel your landline phone

Money-saving tips for landline phoneBe honest: when was the last time you truly needed your landline phone?

I haven’t had one for 3 years now and I haven’t missed it yet. If I need to make or receive a call, a mobile phone or a VOIP service like Skype or Google Voice works perfectly. This way, I also won’t have to connect and disconnect the line every time I move or travel.

Just by getting rid of your landline phone, you could save $50 a month or $600 a year.

Savings = $600

 

2. Cancel your cable

save money cancel cable tvThanks to the Internet, you have unlimited amount of entertainment available at your fingertips, literally. And a lot of it is free, so why pay a fortune for cable? Even Netflix subscriptions only cost between $6.99 and $11.99 — and you’ll be able to watch thousands of videos on demand.

The average American pays $75 a month ($900 a year) for cable TV, according to research firm Centris. Canceling your cable would be a huge saving, but if you can’t quit cold-turkey, consider downgrading your subscription. Remember, though, that you’d still be paying at least $25 a month ($300 a year) with a basic cable subscription.

Savings = $900

 

3. Review your cell phone plan

Check your old phone bills to figure out your usage patterns. Do you use your phone for making calls or watching online videos? Adjust your phone plan to match your needs and consider removing premium services like call waiting or busy call return. If you travel so much you rarely use your local number, maybe you should switch to a pay-as-you-go plan.

If you reduce your monthly cell phone charges by just $10, that’s already $120 a year.

Savings = $120Mobile phone money-saving tips

 

4. Bundle your remaining services

Using one provider for landline, cell phone, Internet and cable could lead to big discounts. You could save $20 or more per month, or $240 per year.

Savings = $240

 

5. Cancel your magazine subscriptions

Quick money-saving tipsYou can find almost any information you need online for free, so why pay for it? If you cancel a magazine subscription early, you could sometimes get a refund for any future issues you’ve already paid for.

If you can’t bring yourself to cancel, consider switching to an online subscription instead. It’s often cheaper and won’t clutter up your home. Plus, you can easily bring multiple magazines to read on your tablet as you travel. (This goes for books too.)

Savings = $15 for every canceled subscription

 

6. Cancel your gym membership

Tips to save money on gym membershipYou don’t need a fancy gym to stay in shape. You can always jog in the neighborhood or your local park. If you prefer to stay indoors, there are free workout videos online that you can follow.

Bonus: Once you get used to working out on your own, it’ll be easier for you to maintain a workout schedule when you travel.

The average gym membership costs between $40 and $50 per month. But CNBC reports that the true cost is closer to $800 a year after taking fees into account.

Savings = $800

 

7. Switch to cheaper classes

Why spend money on a premium course when your community center or YMCA offers similar courses? You could learn pottery, philosophy, music, dancing and many more at cheaper prices.

Community center courses could easily be cheaper by $50 a month,  which would make you $600 richer by the end of the year.

Savings = $600

 

Insurance

8. Bundle your insurance

If you currently have multiple insurance products from different companies, ask each company to how much your premium would be if you combine all those products. Bundling all three main insurance lines (home, auto and life) and travel insurance with one insurance company can save you as much as 15 percent of your insurance premium. If you currently pay $3,000 a year for insurance, you would save $450 a year.

Savings = $450

 

9. Increase your deductibles

Get cheaper insurance Deductible refers to the amount of money you pay out of pocket when you make an insurance claim. For example, if someone breaks into your home and you suffer $5,000 of damage, your insurance provider would only pay you $5,000 minus your deductible.

If you increase your home insurance deductible from $250 to $500, you could get a rate cut of 10 percent. Pushing it up to $1,000 removes another 10 percent from your bill. If you spend $1,000 on home insurance each year, this 20 percent translates into $200.

In the same way, increasing your car insurance deductible from $500 to $1,000 could save you 15 percent or $150 on a $1,000 annual insurance premium. (You’ll save a lot more if you get rid of the car altogether, but that’s not always practical.)

Savings = $350

 

10. Get insurance discounts

Check with your insurance provider if you’re eligible for any discount. Depending on the type of insurance and company policies, you could slash your rates for being a student, taking driving lessons, working at a certain company, using the same insurer for a certain number of years, etc.

Savings = depends

 

Bills

11. Automate bill payments

Save money by automating billsAutomate as many bills as you possibly can. This way, you’ll have fewer things to remember and you won’t have to pay late fees. Depending on the bill, you can directly set this up with the biller or with your bank.

For credit cards alone, late fees average at $35. By paying your credit card bills on time, you could avoid $420 in fees in 1 year.

Bonus: By paying your bills on time, you’ll improve your credit score, which will help you qualify for lower interest rates on loans and credit cards, which will save you even more money in the long run.

Savings = $420

 

12. Pay off credit cards

It’s not enough to just make your credit card payments on time; you should also pay them off every month.

The average American adult with a credit card carries a balance of $5,047, according to the Federal Reserve. At 18 percent interest, you would be paying $860 a year in interest alone if you only make the minimum payments.

By paying off your balance each month (preferably with automatic payments), you could be saving $860 throughout the year.

Savings = $860

 

13. Lower your interest rate

If you can’t pay off your debts right now, make a payment plan and work toward your freedom. In the meantime, talk to your bank about consolidating them to get a lower interest rate. For example, you could apply for a low-interest credit card, which charges as low as 10 percent interest. You could often get even lower rates with a personal line of credit or a home equity line of credit.

On a balance of $5,407, the 10-percent interest rate means you’ll be paying $490 in interest if you were to only pay the minimum payments. This is $370 lower than what you would pay with an 18-percent interest rate.

Savings = $370

 

Savings and Investments

14. Move your money into a fee-free high-yield savings account

savings account with high interest rateWhat do you do with all the money you’re saving? You want to get the most out of it, obviously. Instead of a regular savings account, go with a high-yield savings account. And make sure there are no monthly fees — with so many banks offering free checking accounts, there’s no reason to be stuck with bank fees.

I’ll be the first one to say that even these so-called “high-yield” accounts don’t pay out much these days, but they’re still better than regular savings accounts. You’ll enjoy higher returns when interest rates go up.

 

15. Cut down on investment fees

Stop paying high transaction and management fees to invest your hard-earned dollars. Instead, go with low-cost index funds. Warren Buffett says they perform better than most other funds anyway.

 

Looking for more ideas to save money?

Check out these posts:

  • 100+ Easy Ways to Save Money
  • How to Save Money to Travel the World
  • Your 3 Biggest Household Expenses and Why You Should Focus Your Travel Savings on Them
  • How I Saved $20,000 in 1 Year Without a Budget
  • 3 Studies Reveal Why Budgets Fail

 

Images: 1. William Warby (CC BY 2.0 License); 2. EAnderson88 (CC BY-SA 3.0 License); 3. Billy Brown (CC BY 2.0 License); 4. Anthony Kelly (CC BY 2.0 License); 5. Sham Hardy (CC BY-SA 2.0 License); 6. Rodrigo Galindez (CC BY 2.0 License); 7. Ed Yourdon (CC BY-SA 2.0 License); 8. רנדום (CC BY-SA 3.0 License); 9. Brendan Wood (CC BY-SA License); 10. Images Money (CC BY 2.0 License)

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Comments

  1. RobRob says

    December 28, 2014 at 9:55 PM

    Great tips! An additional note on #10 – don’t just ask what discounts you qualify for from your insurance agent, ask about affiliate discounts. Sometimes, you can get a discount through a group or association you belong to. If you don’t belong – apply! You might be able to save on that bill by joining one of the associations that do have a discount. Be sure to also ask your cell phone provider about these savings too. Plus, often military, government employees (and sometimes employees of government contractors), and educators get discount savings!

    Reply
    • Deia says

      January 7, 2015 at 4:14 PM

      Thanks, RobRob! That’s a great tip. :D

      Reply
  2. Chris A Sharpe says

    July 31, 2014 at 2:04 AM

    Some awesome money saving tips here, would find it hard to give up the gym but if you really want to save money for travel sacrifices must be made! Great post

    Reply
    • Deia B says

      August 1, 2014 at 7:54 AM

      Unfortunately it’s “no pain, no gain” when it comes to savings, Chris. ;)

      Reply
  3. Sofie says

    January 5, 2014 at 4:51 PM

    $75 on cable?
    WOW!
    We pay about €40 a month for cable and internet.
    Boyfriend wouldn’t agree with cutting cable, though.
    As for the rest, I’m on track:)

    Reply
    • Deia B says

      January 5, 2014 at 6:19 PM

      Lol I’m house-sitting now and I’m really enjoying the cable. I can see how easy it is to get used to this!

      Reply
      • Sofie says

        January 6, 2014 at 1:23 AM

        Lol:-) I don’t really watch television that much, but it’s Boyfriend’s way of relaxing (among others). He has a physically heavy job, so I can understand if he just wants to kick back and relax at night.

        Reply
  4. Ruthie Turner says

    January 4, 2014 at 8:39 PM

    Thank you so much for sharing these tips, they are very helpful. Some of those do not pertain to me as I don’t have those bills, but there are two of them that I’m working on as I write to you. It’s important to me to save as much as I can this year to travel more. I enjoy reading your website because you always have great tips and posts!!

    Best,

    Ruthie

    Reply
    • Deia B says

      January 5, 2014 at 12:47 AM

      Thank you Ruthie, I’m really glad you found it useful. I was beginning to think everybody’s already doing this, based on the previous comments. ;)

      Reply
  5. Sharon says

    January 1, 2014 at 5:06 PM

    Damn it, I already do all those things!!! lol but I guess we are perfect examples of why you should. We still manage to go on great trips as a family of four with one income – that’s because we don’t spend money when we don’t need to and rent an apartment. My biggest tip would just be to not buy stuff. I think that’s also the bonus of living in a small place, there just isn’t room for it anyway.

    Reply
    • Deia B says

      January 1, 2014 at 9:36 PM

      Haha based on the comments so far, the people who travel a lot seem to already be quite frugal in other things! I love your tip about not buying stuff. I move often and have to edit my stuff every single time. Having to sell things for a fraction of what they cost me really made me realize how little value they have.

      Reply
  6. Lunaguava says

    December 31, 2013 at 7:38 PM

    Great roundup! We’ve pretty much followed all of your fixes, which might explain how we managed to save enough for a year of travel in 6 months. Still, wish we were as good at making money as we are at saving it :) Happy New Year, Deia! Good luck!

    Reply
    • Deia B says

      January 1, 2014 at 9:44 AM

      That’s awesome! At least you got one side of the equation down pat. Happy new year! :D

      Reply

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