September 3, 2010

Money-Guy 09-03-2010

Today’s show is kind of unique. Due to all of your positive feedback, I decided to sit back and let Bo take the lead. I asked him to come up with a topic that he felt was timely and even related to his life. The topic he landed on (which is no surprise if you the know the guy), was Creative Ways to Save a Few Bucks.

As Bo and I did our pre-show prep, I felt that he came up with some very good money saving ideas. However, I couldn’t help but chuckle to myself at some of his more “creative” ideas. As you listen, pay attention to some of these specific ideas:

  • The first idea that Bo shares is to determine whether you actually need cable/satellite services. With the advances in off-air antennas and services such as Hulu and Netflix, it is quite possible you could be paying $50 – $100 for channels you don’t watch or for channels that you could get much cheaper.
  • Another idea that may be a worthwhile investment is a programmable thermostat. Logically speaking, if there is no one occupying your home during the day, it is probably unnecessary to keep the temperature especially warm or cool during those hours. A common rule of thumb is that for every 1 degree temperature change you can maintain for 8 hours, you can save 1% on your heating/cooling bills.
  • Shop your insurance. By doing just a little bit of research, Bo was able to save himself $70 a month in health insurance premiums by replacing his current policy with an almost identical, cheaper policy. We did a show back in March of 2008 titled $200 a Month with a Few Phone Calls, and explained in detail how you can target some of your “Ungrateful Service Providers” and lower your monthly expenses without a whole lot of effort.
  • Adjust your tax withholding. If you receive a substantial tax refund each year, you are in essence giving Uncle Sam an interest free loan! Ask your employer to provide you with a Form W-4 and you can alter how much money is withheld from your paycheck. You won’t receive that refund each year, but you will have some extra cash each pay period.
  • Lawn Maintenance. Obviously, the best way to save money here is to do it yourself. However, if that isn’t reasonable, negotiate with your lawn maintenance provider for those winter months where there is not as much upkeep necessary.

And now for some of the more “creative” ideas :). According to Bo…

  • Switch up your haircut routine. If everytime you go in for a trim, you get your hair cut just a little shorter and then let it grow a little longer before your next trip, you can essentially cut your hair cutting expenses in half.
  • Cancel that gym membership. Are you putting in $40 – $60 worth of time at the gym each month? Could you drop that membership and go for a run in the neighborhood each morning and subscribe to a push-up/sit-up routine in the evenings?
  • Brown bag and a coffee pot. Try bringing your lunch to work each day and making coffee at the office. Saving $5 on lunch and another $2 on coffee can save about $35 a week.
  • Coupons. This has become a skill set these days. There are great resources on the internet such a Groupon that you can use.
  • Consider dropping your land line or cutting back on your cell data plan or monthly minutes.
  • Have the talk. Let your significant other, spouse, kids, or friends know that times are tight and you are trying to cut back. Emphasize the fact that is a joint effort. In the words of Bo, under promise and over perform. (His poor girlfriend…)

Bo also shares some ways to increase your income. When times get tight, you have 2 options: 1) decrease expenses or 2) increase income.

To close out the show, I share an article from Morningtar titled Are Some Index Funds Ripping You Off. In my view, indexing is a valid and needed investment strategy. You do, however, need to make sure that you are getting the best deal out there, even when it comes to picking investments!



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