By Mike DuBose
Previously, we focused on the largest family expenses—housing, transportation, and food. Let’s continue.
Automobile and Home Insurance zaps 20 percent of household costs. Rates are based on multiple variables, so independent agents can compare different companies’ deals. Scott Mosely of Irmo Insurance reported families often don’t communicate items that reduce premiums: monitored-security-systems, new roofs, youthful-drivers’ academic B-averages, driver-training-documentation, pleasure driving, retirements, and no mortgages. Your car’s VIN number generates safety discounts but double-check policies. Paying entire bills upfront and raising deductibles to $1,000 save money. High credit scores (750+) play into favorable-rate formulas. Visit www.AnnualCreditReport.com for free reports. Credit-bureaus provide ways to improve ratings and we strongly suggest locking accounts to prevent thieves’ access. Some insurers allocate lower rates if you install cellphone apps that track driving patterns. Use caution about joining since they may miscalculate good drivers. Our next article will share stunning information how our satellite-connected-cars transmit detailed-personal driving habits, like speeding, and are sold to insurance companies which can damage your ratings.
Health expenses consume 5-10 percent of families’ income. Maintain relationships with “lower-insurance-in-network” medical practices (preferably internists and multiple family practitioners), dentists, and specialists since your past is documented. Annual examinations can detect potential health threats. Our bodies talk to us through problem-symptoms that alert us troubles are brewing (which can result in saving money). For example, if your tooth hurts, $200 dental-fillings beats $3,000 root canals. If you have large medical bills, inquire if you pay entire bills to obtain 15 percent discounts. This often works if you wait for overdue-billings and most offer payment plans. Ask doctors and pharmacists for generic medications, discount coupons, samples, and saving-alternatives. Pharmaceutical companies offer name-brand lower-cost programs and free medicines for families with limited income. Type into your Internet browser “Discount programs for ‘Your Drug’s Name’ to identify legitimate sources. Medicare provides prescription low-income-assistance www.medicare.gov/basics/costs/help/medicare-savings-programs.
Clothing accounts for five percent of budgets. While selections dwindle, buying winter clothes off-season in February and summer items during the fall results in 50-65 percent off retail prices. When sales appear, buy items before needed to reduce stress. You’ll be surprised with consignment shop and Goodwill bargains, sometimes including original tags. Some families share children’s clothes.
Internet, Cellphones, and Streaming services devour $4,000+ per year from families. Review bills to assess reducing services and compare competitors’ pricing. Some unused streaming subscriptions sit idle with automatic billings after trials end. Educators and military often receive discounts.
Miscellaneous, Personal, and Entertainment gobble 20 percent of budgets—daily Starbucks’ coffee can total $1,200 annually. These little expenditures, when combined, skyrocket into BIG problems unless budgeted, tracked, and limited.
Travel and Vacations can “Wallop your wallet.” Disney four-day-family-vacations average $3,500. It’s important for families to get away and have fun, especially if relaxing, but escapes can throw households into debt. Broad suggestions are: (1) Schedule trips 6-12 months ahead since prices escalate as departure times near and travel off-season to lower costs; (2) Avoid exotic, stressful vacations with children and grandchildren that require expensive airplane tickets, hotels, and meals unless you have abundant resources; (3) Plan around your time zone. Vacations in tropical Key West, Florida are less expensive than visiting Hawaii; (4) If you’re planning overseas trips, Viking cruises, with free flights, are excellent; (4) Avoid economical, stressful bus tours with constant packing/unpacking, running from one hotel to another; (5) Join free travel programs (Delta Airlines, Marriott, Hyatt, and Hilton hotels). Surprisingly, Holiday Inns provide premier European lodging; (6) Enroll with AARP and AAA which provide 15 percent travel discounts. After traveling 2-million miles worldwide, we published many travel tips, fun-destination articles, and saving strategies. Select “Travel” on our non-profit website for details.
Paying with cash and being debt-free are sensible approaches to saving money. Before credit cards, if you lacked cash, you didn’t buy it. However, unless you secure credit lines, your FICO-credit-score declines which could increase automobile/home insurance. Thus, having low-no-fee credit cards makes sense if you promptly pay them off. Apply for those that match your lifestyles. Some companies offer 2 percent rebates on purchases plus no annual fees (Wells Fargo Active Cash). Delta Airlines, American Express, and hotel chains such as Marriott offer sign-up points, discounts, and free travel. Thus, invest your money to generate positive results. Use caution in cancelling credit cards which lower FICO-credit-scores—ask annual fees to be waived to keep cards.
Match-Pricing is not advertised but often provided by retailers and banks with competitors. If you’re taking project bids, ask quality-vendors to lower costs to align with competition. Employer-retirement-matching programs are excellent ways to save.
Meet with Certified Financial Planners (CFP) who analyze your spending and guide your financial decisions. Seek experienced-professionals who charge by the hour and aren’t commission-fee-based. Inquire with friends who utilize financial experts and interview consultants before engaging.
Saving can be difficult but is needed for unexpected expenses and retirement. Financial advisors recommend saving 15 percent of your net annual income. If invested in mutual funds, you could be millionaires in 20 years. A modest-saving-formula—depositing $500 monthly for 20 years generates $220,000. If you have extra cash, invest in flexible-high-interest savings (Discover, Ally, or American Express Banks offer 4.3 percent yields). Interest costs will decline later in 2024, so seek FDIC-insured 2-3-year CD’s with 4.75 percent rates soon.
Create budgets by downloading our free templates (www.mikedubose.com/budget) which include Excel spreadsheets, PDF file (if you don’t have Microsoft Excel), and Google Budget formats. Using these tools guide you on journeys towards creating solid, financial foundations.
The Bottom Line: Visit our website for a single-version of all three of our cost-saving articles. Saving money is fun while creating benefits like financial security, comfortable retirements, and peace of mind. Remember—small savings add up.
Visit Mike’s nonprofit website www.mikedubose.com to register for his monthly publications and free access to his books, including “The Art of Building Great Businesses.” The website contains 100+ published articles he has written on business, travel, and personal topics, in addition to health research with Surb Guram, MD and David Hurst, DVM.
