Beating Broke

Personal Finance from the Broke Perspective

When the More Expensive Option Is the Frugal Choice

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I like to be frugal.  I like to get the most from my money, as I’m sure most of you do.  When it comes to handing over huge amounts of cash, I’d much prefer to go with the lowest price, but sometimes, the lowest price can cost you the most money.

Frugality Gone Wrong

When I was 16, I needed a car to get to my job, so my mom and I combed the ads for a cheap little car for me.  We found one with an unbelievably low price.

And then when I took it in for its first oil change, our family mechanic explained why the price had been so low.  The college student who owned the car before me had rarely ever had it serviced and had frequently run it without oil.  While he did okay running it this way, I had to pay for his mistake. . .and pay, and pay, and pay.  Even though the car had relatively low miles, it broke down constantly.  In the end, I paid more than if I had bought a nice car that had been better maintained.

Lesson learned.

When the More Expensive Option Is the Frugal Choice

When the Expensive option is the frugal one
Can the Expensive Option be the Frugal One?

Early in July, our central air conditioner broke.

We knew this was coming.  The A/C unit was original to the house and was 19 years old.  The realtor had told us when we bought the house two years ago that the A/C unit would need to be replaced relatively soon.

In anticipation of this expense, we called an air conditioning company to get a quote last summer.  The owner came out, peeked into the attic where part of our A/C unit is, and gave us a quote.  The whole process took less than 30 minutes.

When the air conditioner actually broke, the company that we talked to last year couldn’t come to see what was wrong until four days later.  When you live in Arizona and it’s 110 degrees out every day, waiting four days is not an option.

We called another company that, based on the reviews I read online, provided excellent customer service but was expensive.  They came out the same day that I called and confirmed that the A/C unit was dead and needed to be replaced.

Their “comfort specialist” as they called their sales rep, much to my amusement, came out less than an hour later.  Before he gave his quote, he did all sorts of tests—checking the vents for leaks, checking how well insulated our home is, and inputting the layout and size of our home into a computer program.  When he put in other details such as where the morning and evening sun hits, the program told him what tonnage we needed for our air conditioner.  Surprise!  We only needed a 3 ton air conditioner, not a 5 ton like the one original to the house.

The service and attention to detail between the two companies was night and day.  In addition, the company we went with gave us two years of free service checks for our air conditioner and heater and a 10 year warranty on parts and labor for the air conditioner.

Even though this company wasn’t the frugal choice when it comes to our bottom line, we feel sure that spending more money upfront will save us in the long run.

What have you purchased that wasn’t the cheapest available but will save you money in the long run?

5 Ways to Save Money When Your Schedule Is Very Busy

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Most of us have busy schedules, but for some of us, certain times of the year are busier than other times.  Maybe you’re a tax accountant and are swamped from January through April.  Maybe your kids play soccer in the fall and you’re busy with practices and games.  Whatever the reason, the busiest times of your life are also often the times when you spend the most money.  However, it doesn’t have to be that way.

Right now, I’m working from home part-time, teaching three classes at our two co-ops the kids are attending during the week, homeschooling the kids, and shuffling my children to extracurricular activities.  Life is C-R-A-Z-Y!, and it will be until mid-May.  However, my husband and I have put a plan in place to avoid spending extra money during this time.  Our strategies include the following:

Save money when you're busy
Save Money When You’re Busy

Utilize the Slow Cooker

Every year, I love my slow cooker more and more!  On busy days when I know we’ll be gone all day, I put something in the crockpot in the morning, and voila, when we return at night, we have dinner waiting for us.  With such an array of great recipes on the Internet and Pinterest, I always have yummy meals to try.  We are typically using the slow cooker at least three times a week.

Utilize Freezer Meals

In December, before the craziness began, my husband and I spent about four hours spread over two days making approximately 40 freezer meals.  Now, when I’m too tired after a busy day or at the end of the week, I simply pull out a freezer meal and reheat it.  Seriously, it can’t be any easier!

If you don’t want to have a big freezer cooking session, simply double a recipe you are making and put the other half in the freezer for another night.  Easy, and you’re future self will be so glad when you use that meal in a few weeks or months.

Let Some Standards Slide

You may want a clean house, homemade meals, and time to relax, but during a busy season in life you may not be able to have all three.  I refuse to compromise on homemade meals, and I need time to relax and read a book or I can’t sleep, so the clean house is sliding a bit the next few months.  We have more clutter than we usually do, and the kitchen doesn’t get swept and mopped as much as I would like right now, but as long as I’m keeping up with laundry, dishes, and minimal cleaning, I’m okay with it.

Find Cheaper Convenience Alternatives

If you don’t have time to cook, you may decide to go out to eat.  Rather than doing that several times a week, find cheaper alternatives.  Maybe instead spring for a frozen family meal from the grocery store.  Yes, you’re still spending more than you may have wanted to, but it’s less than you would have spent going out to eat.

Find Other Ways to Relax Than Shopping

During stressful times, many of us are susceptible to retail therapy.  Some people may feel that is the only way they can de-stress and unwind.  Instead, try to find other ways to pamper yourself when your schedule is hectic like reading a book, taking a bubble bath, going for a walk, or talking to a friend.

How do you save money when you’re in a stressful, busy season of life?

 

1 Simple Trick to Find More Money in Your Budget

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Do you have a budget that already feels tight?  Have you cut and cut but still have more month than money? Are you struggling to find more money in your budget?

I know how that goes.  Over the last few months, my husband and I have been working hard to cut our budget as much as possible.  We thought we’d cut all that we could, but I discovered one more secret, which, depending on your budget could help you “find” another $20 to over $100 a month.

So what’s the magic secret?

Make your payments on a semi-annual or annual basis rather than on a monthly basis.

Paying Annual Can Provide Big Discounts

1 Simple Trick to Find More Money in Your Budget
Find more money in your budget.

We have Ooma for our home phone line.  I pay $17.99 a month.  Recently I had to call Ooma because I was having an issue with the service.  After the customer service rep had finished helping me, she asked if I wanted to pay annually instead of monthly.  An annual payment would be $105, the equivalent of $8.75 a month.  In other words, I was paying an additional $110.88 a year for the convenience of monthly payments.

Our life insurance is the same.  When I checked into it, I realized that we would save $22 a month if we paid annually instead of monthly.

We already pay our car insurance semi-annually, but if we opted to pay monthly, we’d be charged a $2 per month fee.  Other car insurance companies charge as much as 5 to 10% more for a monthly payment.

Convenience is expensive.

Take a look through your monthly bills.  Are there any that you can choose to pay annually or semi-annually?  If so, how much will you save per month if you pay annually instead of monthly?  In our case, we “found” an extra $32 a month.  Sure, that doesn’t sound like a lot, but over a year, it adds up to an additional $384 we now have that we didn’t have before.

Two Caveats

Before you change your payment method, it’s important to consider two factors.  First, if your budget is already tight, you may need to wait to switch to an annual payment until you have a windfall like a bonus at work or an income tax return.  If you’re used to paying $80 a month for car insurance, even with a discount for paying annually, you may still be looking at paying $800 or $900 in one swoop, which can be difficult on a tight budget.

Second, only use this method if you know you’ll be disciplined enough to set aside money every month for the annual payment.  If your annual car insurance is $800, then set aside approximately $65 a month so you’ll have enough to pay the annual payment when it comes due.

Making payments annually or semi-annually can be a great way to find extra money in your budget, but before you change to this method, make sure that you have the discipline to set aside (and not spend) the money each month for the annual payment.

Do you pay bills like your insurance monthly or semi-annually or annually?  Which do you prefer?  Why?