I am getting ahead by cutting costs

betty ming liu Money, Travel 12 Comments

Soooo, I’m about to walk into 2011 with nearly $9,000 less in annual expenses. And even though I’m happy about this development, it also makes me feel rather pathetic. Since when is $9k a big deal??! There was a time when saving or spending a few grand didn’t matter. But that was then. These days, cutting costs is the new getting ahead.

After my divorce in 2000, downsizing was the new getting ahead. The square footage of the houses that I’ve owned shrunk from 6,400 to 2,400  to 2,000. I drove out of my marriage in a silver Lexus, traded it in for a Suburu and currently own a Toyota. It’s been ages since I shopped at Saks; I’m a Kohl’s and Target girl now!

Walking into 2011, I can see that downsizing is no longer enough. The cash flow is more like a trickle. It’s steady, though. For that, I’m thankful. But to stretch my dollars, I’ve had to make a few new, strategic moves:

  • I just refinanced my fixed rate mortgage, saving me $239.56 every month. I was lucky to lock into an interest rate of 4.25 percent . My annual savings: $2,874.72.
  • My health insurance bill is down by $373 per month. Two of the colleges that I teach at offer health insurance. After some research, I discovered that they were providing the exact same monthly HMO plan at shockingly different costs: $796 at one school and $423 at the other.  Why? It’s a question of usage. The college with the higher charges has more employees who require more care. Annual savings: $4,476.
  • I’ll taking my all-day Friday painting classes for free. The tuition is $160 a month. But my teacher just asked me to be her class monitor, which means that I can attend at no cost if I: set up the easels, tables and lights; make sure students pay up at the start of each month; shush anyone who is chatting so that we can paint in peaceful silence. Annual savings: $1,600.

I want to enter 2011 feeling as financially secure as possible. Even though the nation is supposed to be in recovery mood, things still look pretty shaky to me. So looking forward to next year, my key words are “safe” and “stable.”

Here are a few more things I’m doing to save money:

  • I just got a new Blackberry for free. My daughter wanted the new, $200 Blackberry Bold for Christmas. Our Verizon account was eligible for a deal that got us the phone for $100 (after a $100 rebate). Not only that — we lucked into a two-for-one special that got us the second phone for free.
  • All my fitness classes are online. About two years ago, I discovered the joys of online exercise videos. Yes, I pay for them, but it amounts to nothing compared to the $20-per-session charge for live classes. I highly recommend Yogaglo.com, which, for $18 a month, lets me take unlimited yogo classes of all types on its gorgeous website. I also like the unlimited salsa lessons on BailaSociety and the $49.95 that I pay every three months to subscribe. Both sites offer free trials, if you’re interested.
  • We eat more vegetarian meals at home. It’s amazing how much money I’ve saved by shopping less often for meat. I hardly buy it at all anymore. At most, I purchase fish once a week. Going semi-vegetarian was a lifestyle decision rather than a financial issue. But it’s turned out to be a win-win situation on all fronts.
  • Tap water has become my beverage of choice at home. H2O is the best thing for my body and my complexion. It also happens to be free (I have a filter installed on the kitchen faucet). Even though my daughter and her friends love Trader Joe’s Organic Apple Grape Juice, water is their second choice at our house.

I hope  writing about my search for savings isn’t too boring. I just have a hunch that in 2011, the issue of trying to make money is going to be more of a concern than ever. Maybe I should just end this post by saying, happy holidays and….see you next year! xoxox.

P.S. — Don’t you just love the caption on the cartoon? It’s from The New Yorker, the only print magazine that I still subscribe to. I like getting it in the mail and ripping out cartoons that make me laugh. Of course, sometimes I read the articles and save them too.   ;-)

Update on Dec. 31: I just remembered something important I learned earlier this year. This lesson deals specifically with those darned fixed costs — like insurance and utility bills. The revelation was that it’s possible to reduce these too. Just call the company and ask customer service if there’s anything you can do to cut down on your bill.

When I asked my home insurance carrier that question, it knocked my annual bill down by a few hundred dollars. I was entitled to the discount for good behavior — there haven’t been any claims against my house or property.

And over the summer, I eliminated my $90 Cablevision cable TV bill by signing up for Verizon’s competing FIOS service. As the new player, Verizon is offering all kinds of package deals. Now, I get Verizon landline service, high speed Internet service and cable — all for a little over $100 per month. On a separate occasion, I called to to complain about my bill and I was given some kind of “courtesy discount.” It means that an additional $15 was taken off of my bill every month for a full year!

Comments 12

  1. You are amazingly organized! It demonstrates your left brain is as active as your right brain.

    It’s an inspirational article to me, who dislike financial management.

    I also enjoy very much your cartoon and snow flakes animation.

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      lina, thanks for the encouragement. i hate dealing with financial crap too. but divorce forced me to learn how to take care of this stuff….there was no one else to do it anymore! no husband to yell at! so i guess divorce helped me to grow up and take financial responsibility.

  2. Hey Betty,

    Keep ’em coming! I loved hearing about your cleaning house financially and it’s definitely inspired me to see where we can cut some corners. Hope this New Year rings in much prosperity and light for you and Gabi.

    Christina

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      ok, will do, christine. i probably will write more about money soon. the thing for me is that i want more money. but since i am a slacker by nature, i really don’t want to take on more work! (unless it’s a gig that i love.) so the most effective, practical solution is to cut costs. now i just need more ideas on where to wield my scalpel next…..

  3. I was wondering if there was an online exercise video thing, as exercise classes are tough to come by in India, esp here in Kashmir.The cartoon made me howl — I used to love ripping out the best ones and putting them on my corkboard at the office. Though I can’t draw, I always wanted to submit a cartoon for the New Yorker.
    Happy 2011, Betty (and fellow readers) <3

  4. OMG … (I can’t believe I just wrote that!) … but, yes, OMG, I LOVE your post. What an inspirational post that speaks so directly to me and what I need to take ownership of in my own life. Even the small things can add up to $9,000 … and yes, it’s not really a lot in our typical/usual lives, but right now (when I’ve been out of my typical career position making six-figures), it IS a lot.

    Have a great 2011 … to all of us! Why not … i’m in a Dickens mood … “God bless, us every one.”

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    laura, i had the same experience in india — had a hard time find yoga classes. indians and westerners have such different attitude towards this. i think you’ll really like yogaglo. i also think you need a good internet connection (which is true for playing videos online, in general).

    and jgregg, bless you for making me feel less like a pauper. you’re right — this whole penny-pinching process was about dealing with reality like a grown-up. btw, you reminded me of another thing that i’ve done to save money. that info has been added at the bottom of the post now, as an update. xox

  6. Betty, you never cease to amaze me! Whether we’re in good or bad economic times, there is nothing wrong with learning how to save. It’s actually a very good habit to pick-up! Thanks & Happy 2011!

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      thanks, ivan. i’m actually surprised that people are responding to this post…saving $9k is actually a lot of money for a lot of us. i really appreciate the feedback!

  7. Just discovered your blog and love it.

    I was in a budget cutting mode over the holidays. I recently quit my job and felt the need to be more frugal. I realized that I enjoy saving money far more than spending it.

    Check out Envaulted.com, which may further your budget cutting. (I have no relation with it and don’t benefit from any referrals).

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