How to earn an extra $500 a month: Part 4

OLYMPUS DIGITAL CAMERAPart 4 wraps up the series on earning an extra $500 per month.  The focus this time is not increasing income, but instead decreasing expenses.  After exhausting all of the previous options, there always remains the option of cutting expenses.  Below are three examples designed to save an average of $500 per month.  It is unlikely that a specific example may fit you perfectly, so the best option is to pick from each example those options that do work for you.

Example #1  ($150+$80+$270)

  1. A newly created cost is the smartphone data plan.  With many 2 phone plans pushing past $200, perhaps a simpler approach is needed.  Here’s the action… drop the phone plans and get a prepaid plan and free internet at your local library.  The savings here can be as high as $150, which still leaves an allowance for going prepaid.
  2. Cut out the $20 per week for office lunches, coffee, etc.  Home cooked food gets better with time and experience.
  3. Downsize your car payment.  If you have a car payment, try trading it in for something older that will reduce of your payment.  A New $24000 car will have a payment of $450 per month with good credit.  Cutting down to a $10000 car will save $270 per month.

Example #2 ($300+$100+$25+$75)

  1. Refinance that car.  Extend the term if needed.  It will be good to free up the cash flow, and car debt for those with good credit it is not that expensive.  If you had three years left and a balance of $24000 at 5%, refinancing to five years at 2%, would save $300 per month.
  2. Cut the cable TV.  With good quality programming on Netflix and Amazon Prime, cutting the high end cable and movie packages will save upwards of $100 per month.
  3. Ask for a reduction in rent.  This applies to good tenants who pay on time.  A vacancy costs a landlord a good amount of money.  On top of that, they are paying 10% management fees and taxes on top of every gain.  Asking for a modest $25 per month (or hopefully more) off of your month should be reasonable to many landlords who wish to keep a good tenant.
  4. Make sure not to buy more insurance than needed.  Insurance is mainly designed to protect personal assets.  If you don’t have much in the assets category, cutting insurance and raising deductibles can free up some cash.  $75 per month alone on health insurance is achievable.

Example #3 ($260+$40+$200)

  1. Carpool, walk, or take public transportation.  This really applies to your second car.  Get rid of that $15000 new car you just bought on a 5 year loan and save $260 per month.
  2. Ditch the home phone.  The home phone and long distance is now becoming more expensive than a prepaid cell phone with unlimited talk.  Since most have the cell phone, this will save about $40 per month.
  3. Refinance the house.  There are many options for no-cost refinancing.  Refinancing a house that you bought three years ago for $165,000 at 5% can now be refinanced at 3.25% for 30 years, freeing up $200 per month.

The FPO series on earning an extra $500 per month has provided multiple methods for achieving that goal of bringing in some extra income.  Combine that with some of the savings methods above, and the result should be a complete transformation of your personal finances.

Software Savings

CatPCSoftware doesn’t have to be expensive. In fact, in can be free. No strings attached; no spyware, shareware, or adware. Linux, for years has been an alternative offering to Windows. While trailing Windows for many years in user friendliness, Linux has gained ground against Windows in ease of use. Ubuntu Linux is a common choice, and just about runs itself.If changing operating systems is a bit much, and it will be for computer games; Windows can at least be used to run open source (free) programs. Open Office is an office suite that closely mirrors Microsoft office, but doesn’t cost anything. The GIMP is a GNU image manipulation program. Again, free.Free accounting software: GnuCash.  This can be used for small business accounting or personal finances.

Those three programs combined can save around $1000 when compared to retail “pay” products.

Hacking the Grocery Store

Anything that thrives in business is built that way for a reason.  A grocery store is no different.  Whether it be Albertson’s, Safeway, Kroger, or any other, the main design is the same.  The store is composed of two sections, an outside “perishables” loop and an inner grouping of “canned and boxed” goods in the form of aisles.  This design has held for a long time due to its success.  The outer loop of perishables consists of items that offer a considerably lower margin to the grocer.  These items are commodity level items; meats, cheeses, fruits, and veggies.  There is nothing particular to the branding here.  This outer loop is continuous and is meant by the grocer to be able to be traversed quickly.

Why is that?  It’s so you, the shopper can move onto their more lucrative offerings within the aisles.  This is the referred to inner loop.  Due the arrangement of food items within aisles, it takes considerably longer to browse for items.  This method is an excellent advertising opportunity for the grocer as the shopper is essentially a captive audience within these aisles.

In addition, the shopping journey ends with similar methods of advertisement on the way towards the register.  In some instances, there may be a maze of aisles in order to get the checkout portion.

A local grocery store and it's maze towards the register.

A local grocery store and it’s maze towards the register hidden in the upper right portion

The impact of a grocery store layout may now be apparent to your control over your pocketbook, but how about your diet?  This standard layout design is also detrimental to healthy eating habits.  The reasoning is that all of the healthy whole foods are on that outer loop, the loop that is built to be only shortly visited on the way to the aisles.  Again, the aisles are focused on boxed, canned, and processed foods, which should take a second seat to traditional whole foods.

Here’s the grocery store hack:  It takes discipline to overcome conditioning.  Sticking to a list helps, but adopting a new approach will prove its effectiveness shortly.  Try this:  Only shop the outer sections of a store.  Try your best to build a complete meal plan off of this alone.  If you find that there are other items that you need from the inner aisles, get them from the other store in town, only after you have exhausted your options as prescribed above.  This changes your conditioning patterns.  Most prices are close enough anyways.  The savings in adjusting behavior patterns will be greater than a slight difference in prices.

Blockchain and robotic automated systems

Evolution in Investment world

Carlisle Mitchell - Real Estate

Carlisle Mitchell - Insider Tips for Real Estate Investors. Expert investment & market analysis for real estate investors world-wide.

Writing in Color

Because Life is More than Black and White

Finance Gateway

Finance Plan Makes Your Future

politicsandreason

Discuss politics with civility and reason

LilyPetal

Either write something worth reading or do something worth writing

My Mom Thoughts

Thoughts and Recipes by Marie

%d bloggers like this: