When you are on constrained budgets, you really need to focus on what you spend. I found that I could save quite a bit of money by cutting back on some of the following:
1. Coffee: especially trips to 85C and Starbucks which must have saved about $3-5 dollars almost every day.
2. Cell phone plan: I cut it to the minimum without breaking my contract. This way I saved about $3 per month.
3. Replacing Old Equipment: Fuel and water bills aren’t a problem in a warmer climate such as ours so there were few options for that. We did purchase a new A/C which was quite expensive, but it did result in lower electricity bills.
4. Newspapers: I used to buy newspapers daily. Apart from creating extra garbage, local papers here aren’t really worth a daily expense. So now, I buy newspapers on a Friday (the best editions), plus if I’m in town I buy the weekend edition of either the Financial Times, or the Herald Tribune. While neither of these newspapers is cheap compared to the local ones, it’s money well-spent because I usually spend 2 or 3 days reading them, whereas the local newspapers are barely worth a subway ride’s reading.
5. Carry Less Money: I actually cut my own pocket money by about 50%. Since I don’t go to Starbucks, I usually have money left at the end of the month now. Perhaps also, because I am now more careful with my out of pocket expenses.
6. Avoid shopping: Don’t go shopping in the city or in the malls, you’ll find that it is much easier to keep your cash in your wallet. When you do go shopping, do not carry credit cards, just cash. You can limit your spending to the actual cash you have. That works well.
7. Credit Cards: They are expensive to use, even the best deal ones, if you don’t pay off your balance at the end of the month, and/or you incur charges for late payments. In addition, using a credit card removes the paying for something feeling, because it is delayed by upto six weeks or more. I was too busy to pay attention to the charges on my credit card, until one day I added up the total I had paid for the year. Now I don’t run big balances due, but I was surprised that the amount nearly equalled the amount outstanding.
8. Bank Charges: In a similar vein, you need to keep a close eye on your bank charges. They can creep in in a number of ways. I have an HSBC account that charged about $15 per month if my balance fell below a set amount. That happened a lot when I was too busy. However, I noted another way that banks can penalize you: low interest rates. I kept the account for a number of years, but the interest rate is barely 1/4 of the CD rate, and the balance requirement is high. Therefore, I’m losing the opportunity to earn 4 times that amount. In addition, HSBC interest rates are less than many other banks here. So, choose your bank account wisely. I didn’t.
Happy 2007 Year of the Pig.