The Top Ten List

Lately I’ve been focusing on providing recipes or small crafts that promote frugality, but today I thought I’d focus on the really big money savers: The Top Ten things you can do that will reduce your expenses - fast. 

1. Sell your car.  Instead, rely on public transportation, car-pool, use a bicycle and when you need to, rent a car.  Calculate the annual cost of your car payment, insurance, repairs, parking, and parking tickets (we often forget that one!) Surprised with the amount you come up with?  Ask yourself, is it really worth it?  If you choose not to get rid of your car completely, simply cut back.  For example, two of my colleagues at work live relatively close to each other, so they take turns each week driving each other to work.  This literally cuts in half the cost of parking, gas, not to mention the miles they put on the car commuting each day.

2.  Avoid eating out in restaurants and take your lunch to work.  Since “$10 is the new $5 lunch” you could be spending nearly $3200 a year on lunch (after tax).  Compare that to the cost of eating up leftovers or preparing sandwiches, and you’re looking at serious savings.  And that’s just lunch - if you eat out twice a week at an average of $25 a dinner, you’re spending an additional $3200, (again after factoring in taxes).  That’s savings of $6400 a year!  Stock your desk with snacks, bring your lunch, and eat at home.

3. Avoid buying some of the most highly marked up products around - coffee, water, pop, and beer. Take your own coffee to work in a travel mug, buy a reusable, good quality water bottle, buy pop by the case when it’s on sale and bring it to work with you (or go without) and avoid buying beer whenever you can. Sound trivial?  If you buy a coffee in the morning, a pop with your lunch, and another coffee in the afternoon, you could be spending about $850 a year - and that’s a modest figure, assuming each beverage is costing you $1.50 each, including tax. If you buy a pop at a restaurant, or visit a higher end cafe like Starbucks, you could potentially double that amount.

4. Avoid stores, avoid spending.  We are incredibly affected by the power of suggestion.  I personally have noticed a substantial drop in my own spending ever since I moved to the Beaches, which means that instead of walking down Queen Street West or through the Eaton Centre to get home after work, I get straight on the streetcar and get dropped off practically at my doorstep.  If you avoid the stores, you won’t be tempted. 

5. Switch grocery stores. If you live in Ontario, shop at No Frills, Price Chopper or Food Basics and avoid the higher priced stores, especially Dominion and IGA.  You’ll notice a substantial drop in your grocery bill.

6. Shop wisely and consciously.  Plan your meals (and other purchases) using flyers, sales, coupons and in-season-items.  Buy generic brands and always look at the unit cost before making a purchase.  Don’t wait until you’re in the grocery store to figure out what you need.  Plan ahead, and make strategic shopping decisions. And if you sign up with President’s Choice no-fee-banking, you earn points that give you oodles of free groceries.

7. Cancel your cable, phone, and internet.  Yes, you really can do that.  We cancelled our cable and subscribed to a newsgroup.  Now we download our favourite shows (or watch them for free on websites such as Slice and HGTV online.) You can also rent movies for $4 from itunes (and no late charges!) We also cancelled our landline since we use our cell phones. Using Skype is another option for those of you making long-distance phone calls. Finally, you can split the cost of the internet with a neighbour, if you live in an apartment.  If you’re spending $175 a month on these purchases you could save $2100 over the course of a year.  If you don’t want to cancel completely, call and ask for a bargain.  Threaten to change companies if you must.  I’ve seen my bills significantly reduced through effective bargaining methods.  And don’t let that early cancellation fee frighten you - the savings might still be worth it.  You’ll have to do the math to find out.

8.  Consider moving. It might sound extreme, but we saved $500 a month by moving from downtown to the Beaches (the east end) - and we get to enjoy the pleasures of the beach!  We have slightly higher expenses (increased transportation costs, for instance) but we are also less tempted to eat out and go shopping, and more inclined to take a moonlight run by the lake, and we are saving $6000 a year.

9. Pay less tax. Many deductible expenses are hidden in the CRA’s Tax and Benefit Guide.  Did you know, for example, that you can deduct moving expenses (when you move to be closer to work or to a new job or school), the interest on your student loans, the cost of your tuition, education and textbooks, public transit passes, medical and dental expenses, donations and gifts (this includes gifts in kind such as canned goods).  If you haven’t done this in the past, you can carry over at least some of these benefits.

10. Avoid Bank Fees and Interest. Overdraft, credit card interest, cash-advances, visiting ATMs that are not your home branch, and simply paying regular bank fees - this is all money “down the toilet” as Gail Vax-Oxlade would say!  If you carry a monthly balance, reduce your interest rate.  Call the credit card company and ask them to reduce your rate, or switch to a lower interest card and make a balance transfer, and switch to a no-fee-banking account like President’s Choice or ING.