With inflation hovering almost at 10%, a lot of us are not able or willing to move slowly into a more financially efficient way of living. We want solutions now. Many of us may not survive economically for long.
And simple living really is about living efficiently, not living without.
There are steps we can take right now to change our financial picture. In this segment, I outline ten basic actions that most of us can take to improve our finances, within days, or, at most, a month.
- Marital status
- Co-shopping
- Credit card kiting, legally
- Gas efficiency
- Car pooling
- Home utilities
- Cleaning supplies
- Duplication
- Creative get-togethers and vacations
- Barter
Marital status. Many of you may be single parents. Your employer may have had you complete a tax declaration when you started work, declaring whether you were single or married. However, that situation may have changed.
At the time that the tax declaration was completed, you may have opted to declare “single,” even if you were in a cohabiting, married or single parent situation. The idea was, “I will get a larger tax refund at the end of the year.” However, this is false economy. In effect, you are giving the government your money to use, for a year, interest-free.
If you have a child and are single, you can claim an equivalent-to-spouse deduction. If your partner earns only a modest amount, you can claim the amount between the basic single exemption and that person’s actual income.
Co-shopping. Co-shopping is not a new idea. It is an old idea, worthy of repurposing. In some ways, co-shopping is like cooperative buying, but, instead of involving large numbers of members, it my include only you and a friend or neighbour, or a handful of acquaintances, such as fellow workers.
Co-shopping is easy to set up and operate. There are many wholesalers who embrace small buying groups. For a multitude of items, buying in bulk in retail outlets works well.
In Winnipeg, for example, there are three primary food wholesalers who sell to the public: Sobey’s Cash-and-Carry on Dufferin Avenue, Real Canadian Wholesale on Century and Ellice, and Pratt’s Distributors on Bentall St. Additionally, Costco and DeLuca’s sell bulk. These are just a few of the outlets where small groups can benefit from bulk buying.
Co-shoppers pick a store that they frequent and check out the deals. They then let their Facebook or social media co-buyer group know about the specials and when they are planning to shop. Each member orders what he wants. Similarly, each other member does the same thing at different stores.
The concept works because, first, buying sale or in bulk provides lower per-unit prices, and most of us do not want to buy a full case to get a deal. Second, we do not have to waste time travelling from store to store, incurring fuel costs along the way. Third, we get to take advantage of deals we may not have been able to access otherwise. Fourth, in clubs where membership is required, buying one membership and sharing that cost among the group saves money.
Legal credit card kiting. A couple of decades ago, it was illegal to kite cheques to cover other debts, and lending agencies frowned on using their cards to pay off other cards. Today, credit card issuers compete to draw business from each other’s clients.
For instance, Canadian Tire Mastercard and other Mastercard marketers offer an interest-free period if you transfer balances from another card to their card. While the grace period is short, (3 months or so) that often saves ¼ of the annual interest of another card. If you have withdrawn cash on that card, interest may be 30% per year, or 21% for purchases. Savings may amount to 7.5%.
There are specific strategies for moving that money around that will we will discuss in a later presentation.
Gas Efficiency. You may have noticed that many drivers are driving much slower in the city than was the case a few years ago. In part, that is due to people being energy-conscious, and striving to save gas.
However, the amount saved by starting slowly may be nominal. Certainly, stomping hard on the gas pedal at every light gulps fuel, but a lot of the city lights are synchronized for driving at a certain speed and low starts create a form of gridlock behind the drivers that forces them to miss subsequent green lights. This costs more fuel than the one or two drivers who start slowly.
Starting slowly from a light is only one option for gas efficiency. Things like uniform and proper tire pressure, reduced speed overall, clean air filters (not necessarily new ones), use of air conditioning, wheel balance, size and type of tires, cargo carried, transmission shifting ratios, planned trips and outings, idling, and a multitude of other ideas can trim 15% from your fuel bill.
Car Pooling. This method of travel was popular for years in rural, bedroom communities as the people travelled to the city for work. However, it has merit today, not just for work, but for other activities.
Like co-shopping, car pooling is an excellent way to save the number of trips that you must make to stores, work, etc. By planning your trips to coincide with those of friends and colleagues, using either your or their vehicle, you save the cost of fuel and upkeep on your car.
A second emerging way to carpool is to join a car cooperative, where you rent by the hour for planned trips. This allows you to give up your own vehicle completely, or move from multiple vehicles in your garage to a single car, using the cooperative as backup.
Home Utilities. You may be paying electric, heating fuel, water & sewer, telephone cable, fibre-optic Internet, cell phone and data plan, yard maintenance, Netflix, Amazon Prime and others every month. While each may seem insignificant, the combined “hit” to your wallet is not. Often, we either are using these services inefficiently or do not need them at all.
Additionally, we may even be paying them the wrong way! If you have credit cards on which you pay the entire balance each month, by paying the utilities on those cards, you are able to defer payment of the utilities by one month, saving the interest on that amount. At the same time, most cards offer loyalty rewards, where you receive cash back or points (e.g. PC Mastercard or WestJet Visa Rewards) toward in-store purchases.
Cleaning Supplies. We almost always overpay for the cleaning supplies that we use. That is because we opt for name-brand cleaners, or use cleaners that have a cheaper home-made alternative that is just as effective as the brand name purchase. We also tend to use more of the cleaning supplies than we need to do the job. For instance, laundry detergent and dish soap require about half what the typical person uses.
Duplication. Vinegar and lemon juice or vinegar and Windex. Netflix and Amazon Prime. Land line and cell phone. Data plan and High-speed Home Internet. Two vehicles registered as “all-purpose.” Food processor and juicer/blender. Toaster oven and air fryer. The list is extensive of the things that often duplicate the purpose of another, and can be eliminated or used more effectively.
For instance, an oven-style air fryer usually is sufficient for any small family oven cooking, replacing the main oven and toaster oven. It uses less energy and cooks more quickly. An instant pot is a general cooker, slow cooker and broiler all in one.
Duplicating services are the primary sources of extraneous costs. These expenses should be examined to determine the utile, or value for cost, that they generate.
Creative get-togethers and vacations. Bar scene? Frequent dinners out? All-inclusive 1-week vacations? Extended tropical vacations every year? These are major expenses and often are the source of great savings. Instead of dinners out, change a few to potluck gatherings at a friend’s place. Gather for a few hours before heading to the bar. A drink or two at your place saves as much as $15 at the bar. Plan interesting gatherings to replace regular outings. Vacations of less than two weeks are not only cost-inefficient, but waste two days of your vacation on travel. Renting a larger place and travelling with friends, then ordering in for several meals is a better option than all-inclusive.
Barter. A time-proven method of saving money, bartering peaked in the 1980s then, due to tax laws, declined in popularity. However, informal barter systems can be structured to overcome the taxation issue and are a convenient way to use resources effectively, either as a peer-to-peer network or a more expansive, informal network of exchange.
In addition to these ten strategies for reducing monthly expenses, there are dozens more opportunities. We would be glad to assist you in designing your own personal money-saving approach. Visit our Contact web page to reach out to us.