Let’s get right to the tips this morning, but before we do so I wanted to highlight my recently posted, and highly relevant, article on Wisebread.com entitled 10 Life and Money Lessons Learned From Immigrant Parents:
1. Auto renewing products and services.
This can be a magazine subscription, Netflix service, cell phone with unlimited text messaging, emergency/repair service offered by a utilities company, cable, etc. I like to look at all my auto-renewing services every three months or so and eliminate what I am not using or can do without.
2. Eating out consistently / not bringing your lunch to work.
Do you eat out at least once a week? If so, you’re throwing money out the door and could be affecting your health, as well. Try to limit eating out to special occasions or 1x – 2x per month. Eating out used to be a privilege and something most folks did not do very often, now it’s seen as an entitlement (this is the wrong mentality if you care about your bottom line and waist size).
3. Going to the car wash.
If you have access to a hose, then you can easily wash your car. You’ll need a small upfront investment for car soap (yes, you need special car soap, dish soap will do bad things to your paint), microfiber clothe and sponge, a bucket, and a squeegee for the windows. Washing your own car in the winter can be difficult, but if the temp goes above freezing you can wash your vehicle provided you have a bucket of hot water.
4. Landscaping services or having someone else mow your lawn.
Unless your backyard resembles a botanical garden, then you can easily cut your own grass, trim trees and bushes, and re-seed dead portions of your lawn. You’ll need a good quality mower and a few garden tools, but you should be able to re-coop your costs quickly.
5. Luxury Vehicle / High End Clothes / Jewelry
Do you really need heated leather seats, navigation, satellite radio, and a V8 engine? Cars, in general, are money-losing propositions but most folks need a vehicle for everyday use. So, opt for a quality used vehicle that’s about three years old (let someone else pay for the depreciation) and make sure the vehicle has key safety features (stability control, ABS, side impact/front airbags, etc.) and good reliability (hint: Toyota and Honda), as opposed to fancy electronics and Napa leather. In terms of clothing and jewelry, buy high quality clothes without the designer label and a few pieces of jewelry (such as a good watch and a nice necklace for special occasions).
Don’t be a gear slut! Resist the temptation to get the latest mobile phone or flat screen TV. There will always be something “newer and better” on the market and trying to keep up with tech gadgets is a loosing proposition (especially for your wallet).
7. Babysitting / Day Care
Did you see the latest headline: Outrageous Day Care Fees are Killing American Families: The Two Income Trap (viz., because both mom and dad need to work to keep up with an inflated lifestyle)? OK, so I just made up the headline, but parents spending thousands of dollars a month on childcare is happening. What can you do? Do you live near your parents and, if so, can mom or dad help raise little Timmy? This is the European model where Nonna helps raise the kids and when Nonna becomes very old she’s taken care of by the family (not the nursing home). Sometimes it’s good to preserve old world traditions because they help preserve wealth.
8. Paying strangers, contractors, etc. for services and not using your social / family network.
This tip is similar to the babysitting item above. Do you have an uncle who lays tile or a cousin who knows carpentry? If so, don’t run to a local contractor and pay him/her to renovate your home, rather use your social network to see who has a certain skill set you need.
9. Premium Gasoline.
If your car manual says regular gas can be used (even with a slight performance penalty), then use it. Your engine will not be harmed and you’ll save money (unless of course you’ll be racing the minivan at the Daytona 500, then you may want your engine pushing out an extra 2-3 horsepower!).
10. A single family home.
Disclaimer: I live in a single family home. However, my advice to most young families looking to buy their first home is to purchase a two or three family home. A multi-family home provides income to off-set mortgage and property tax payments and the idea of earning money without “working” is one of the keys to building wealth. I wish I would have purchased a multi-family home, but am working towards owning a second home as an investment.
11. Warranties of any kind (appliances, cars, electronics, etc.).
Just say no to warranties. Instead, buy a high quality item with good reliability history and treat the product well and maintain it according to manufacturer specs (and you should be ok).