The Beginner’s Guide to Savings: Week Three

Part 3: Save on the Big Things

After spending the last week sorting out your budget and then recording all your purchases, you hopefully now have a fairly clear idea of where your money is going. Over the next 6 weeks be sure to keep those worksheets handy–you will need to adjust your amounts as we work to lower expenses in the various categories. Be sure to also continue recording all your purchases in the expense tracking worksheet too!

This week we are going to tackle lowering the BIG 3:  housing, transportation, & insurance. I will readily admit that this is not my area of expertise. Not even close. From this point forward it should be known that you are taking financial advice from a girl who thinks a cute pair of designer shoes is a perfectly reasonable investment, not just an impulse buy.

In other words, some of this stuff is a little over my head. That’s why this is called the Beginner’s Guide to Savings, not the Girl Who Knows Everything About Everything’s Guide to Savings.

But I am learning. And since this kind-of stuff overwhelms me, I’m guessing that it probably overwhelms many of you too. So let’s figure it out together and be better for it. Luckily for us, the internet is a vast pool of knowledge. This week, we’re going swimming.

I think the most important thing to keep in mind when it comes to your finances and the money you’re spending is this premise:

Everything is negotiable.

The great thing about NOT being socialists is that we live in a country where companies have to compete for your business. This is something they don’t really want you to figure out. Most companies would rather have you believe that they are doing you a favor by financing your home or car, or providing insurance, because if you believe that, you’ll pay whatever they tell you to. The truth is that they NEED your business, and that if they are not willing to negotiate, there is probably someone else out there who will.

Knowledge is power; use it to your advantage!

When it comes to saving money on your housing costs there are a lot of factors that will come in to play, far too many to get into specifics here. Do you rent or own? Do you owe more on your house than it’s worth? Are you looking to buy? Are you in an apartment? Is your lease coming due soon? Your individual circumstances will determine your course of action, or even whether there is a course of action possible.

As far as transportation costs go, unless your vehicle is constantly in need of repair or way more expensive than you can afford, it is almost always more cost effective to stick with the car you have than get a different vehicle. Thus, your current car payment is probably not going to change much. That said, if you need a new car, it is almost always better to buy used than to lease or buy something brand new. Your auto insurance, on the other hand, can definitely be negotiated!

Likewise, health, life, & home insurance prices can also be negotiated and shopping around pays. When Husband and I needed health insurance last year, we took a lot of time to price things out. When we took into consideration how little we actually go to the doctor, we discovered that it made a lot more sense financially to buy only catastrophic coverage with a high deductible, then to pay a huge premium each month for medical coverage we weren’t using. As with most things, it is very important to do the math!

Here is your assignment:

1. Research options for lowering your mortgage payment or rent

Once you’ve done your homework, decide if making some changes or re-negotiating your rent or mortgage would be the right solution for your family. I found some awesome, super informative, and, most importantly, short articles to start with:

How to Lower Your Mortgage Payment Without Refinancing (homeowners)

4 Ways to Lower Your Mortgage Rate (homeowners)

How to Negotiate Low Mortgage Rates (Video) (homeowners)

“I Owe More Than My House is Worth”  (homeowners underwater)

Why Not Just Walk Away from a Home? (homeowners underwater)

How to Negotiate Your Rent (renters)

2. Research options for lowering your insurance rates

If you haven’t shopped around for auto, homeowners, health, or life insurance lately (or ever) then you need to. Do some due diligence to find out what options are available, then make some phone calls (or send some emails) and get new quotes. You might be surprised at how much money you can save.

It’s only two tasks, but this should be plenty to keep you busy this week! If it seems daunting, just remember that every dollar saved on your mortgage, rent, vehicle, or insurance is a dollar that can be spent on shoes! Now doesn’t that make you want to just run out and hit the Nordstrom Anniversary Sale contact your bank or insurance company right this second?

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Stay tuned for another next week’s saving challenge next week and don’t forget to let me know how you’re doing! What big things do you want to save money on? Do you think it will be possible? What is something you know you can’t save on?