A friend recently started a discussion among a group of us about ways to save money. She is retired and would like to stay that way. I feel the same way I would do a lot of cutting if it meant I can keep from having to go back to work. Like most of us her nest egg and thus her income has shrunk. The discussion that ensued came up with some good ideas both big and small. Some of these ideas are mine and some are from friends.
- Track your expenses. I've used both Quicken and now I just use a spreadsheet. One friend described what happened after she looked at her spending: "An
immediate Ah-Ha moment came at the end of the first month when we
looked at our food-related expenses. We were spending more on the
– because neither one of us is in the mood to cook" than we were on
groceries and "Eating out – social" combined. We did a quick
adjustment to our grocery planning and made sure we always had
something tasty in the freezer that could be cooked in a hurry."
- Health insurance – I got this book from the library and found it invaluable.
The New Health Insurance Solution: How to Get Cheaper, Better Coverage Without a Traditional Employer Plan by Paul Zane Pilzer. The approach in this book can potentially save a lot of
approach is not just for people who are retired or unemployed – you can
get health insurance on your own instead of through your employer at a
big savings, assuming you don't have a health condition that would put
you into the uninsurable category.
Expenses versus Discretionary Expenses. Putting expenses into one
of these two categories led to some really good discussions and
decisions. Some expenses are obviously essential – food, property taxes, insurance, utilities, car registration,
etc. Others are not so clear. Maintenance of my hair, for example, cost me more than $1000 per year. Is this an essential expense or not? I decided to let my hair go gray and Duke agreed to cut my hair for me. I love the result.
- The biggest money saver for Duke and me has been moving out of the Bay Area. We figure it saves us more than $30,000 a year. We just bought a house as
nice or nicer than our house in Union City for half the price. We
have less money tied up and our insurance and property taxes are lower.
There is no income tax in Nevada
either. The icing on the cake is that I love Reno. The hiking,
snowshoeing and four seasons are just a few reasons that I am beginning
to sound like the Reno chamber of commerce!
- Another MUCH smaller money saver is that I make my
own bread. I have a bread maker that I use at least once a week and I
have a great recipe. I think every loaf I make is about $2 cheaper than
a loaf in the stores. Of course I probably eat more bread than I would
otherwise so maybe that is a down side.
- Here is an idea from a great friend, "I used to buy fresh squeezed orange or grapefruit juice. But now I mix
juice that costs a fraction of the cost of a quart of Odwalla and
tastes pretty damn good. 4 oz RealLemon (really cheap at Costco,
1 oz sugar, 4-8 oz 100% pomegranate juice (pretty cheap in the
half-gallon size at Costco), and 24 oz water. Costco prices for
RealLemon and Pomegranate juice are such that a quart of this juice is quite cheap."
- And here is another idea that I haven't taken advantage of but it makes a lot of sense again it is an idea from a friend in her own words.
a more substantive note, there is one money-saving thing that I didn't
figure out early enough. I'm going to share it in case the rest of you
haven't thought it through. One of the biggest chunks of my annual
budget was donations. What you should do, if at all possible, is to
fund a charitable trust
while you are working, so that you can get the tax deduction for the
contributions when it matters most. Then, when you stop working, you
can make your donations out of that trust account. By creating the
trust while working you get the tax deduction when it matters most. But
you maintain control of the distribution of the account assets so you
can still make contributions from it during your
So what other money saving ideas to people have? I'd love to hear some from some of you.