These days everyone is trying to save money.
As a business major in college, I learned about opportunity costs – the cost of pursuing one choice over another.
The term is usually used to determine which investment choice is the best. However, often the most relevant opportunity costs in my life involve the use of my time.
When I look to save money, I try to look at saving from a financial standpoint as well as a time consumption standpoint. Therefore, I look at cost savings on a per hour basis, and consider saving as earning money.
Your Time is Valuable
Let’s face it, whether we are teens or senior citizens, our time on Earth is limited. If we are working as fast food workers or doctors, our time is worth something. For the purposes of this discussion, let’s say the average person’s time is worth $20/hour.
“If I’m not working, I’m not making money, so my time is free” you may say.
Not so, because if you had the opportunity to work more hours for the same pay, most probably wouldn’t work the extra hours. This actually makes your time off work – time spent with family, friends, exercising, vacation, etc. – even more valuable. I’ve recently found I’m penny wise and pound foolish in several ways.
6 Tips to Earn Hundreds
1. Coupon clipping: Is it an efficient use of my time? Depends. I used to spend at least a half hour every Sunday clipping coupons only to find them at the bottom of my purse, expired or I would save a couple dollars off my grocery bill every week. When you give your time a value, you can determine whether or not the activity is worthwhile.
For example, let’s say I spend twenty minutes clipping coupons and save $4 on my groceries. If I calculate this activity on an hourly basis, 1/3 hour x $4, I have earned $12/hour, pretax. If I say my time is worth $20/hour, I’ve actually LOST $8/hour by clipping coupons. However, if I spent ten minutes clipping coupons, I’ve earned ¼ hour x $4 = $24/hour-$20/hour = $4/hour. I have found downloading my coupons via the website www.shortcuts.com to my Kroger loyalty card takes a fraction of the time, there’s no scissors or paper involved, and I end up buying products I want and save more.
Another trick I’ve used at Costco, for example, it to ask the checkout clerk whether I’ve missed any store coupon specials, and she does the work for me. That one minute question has saved me up to $7 at Costco, or the equivalent of earning $420/hour, tax free.
2. Gift Certificates: For Christmas last year, my husband gave gift certificates to his colleagues from the local steakhouse. To get the best deal, I called the steakhouse, asked to speak to the manager, and told him I was interested in purchasing ten gift certificates if he would cut me a deal and give me the eleventh one free. No problem, he said. That question took me all of thirty seconds to ask, and I received a “free” $100 gift certificate from the deal, or the equivalent of earning $1200/hour, if you use my above formula.
If you find yourself visiting a restaurant frequently, try to negotiate a deal on gift certificates (who says you can’t use them), and buy in bulk. Alternatively, sites like certificateswap.com offer great deals on dining out (and other items).
3. Hiring professional help when needed: another factor to consider when saving money is calculating the risk involved. We hired a moving company to move our furniture and personal items to our house, but thought we’d save money by doing about half of it ourselves. My husband hit his head while transporting a box from the car to the house, ending up with a detached retina that required two surgeries, and three weeks unpaid off work.
Three years and tens of thousands of dollars later, we still have unpacked boxes. While hindsight is 20/20, we realize the risk involved in doing certain activities and have learned to hire professionals when necessary.
Need to hire online help? I recommend you check out the services of oDesk.
4. Medical bills if you don’t have health insurance, have a high deductible insurance, or your health insurance doesn’t cover you for a specific procedure, requiring cash pay. Call several clinics (and as always, speak to the manager) prior to the procedure and ask for their cheapest cash pay price. It’s often very negotiable. I’ve saved hundreds of dollars by letting my fingers do the walking, and negotiating a cash price on medical procedures not covered by my insurance.
For instance, I get allergy shots weekly which my insurance doesn’t cover, and have received a $4/week discount by calling and negotiating a better rate. That two-minute phone call has saved me over $200/year, or the equivalent of earning $6000/hour.
Realize that cash doesn’t typically include credit cards, which charge the doctor 2-6% of your payment, so use checks to optimize your discounts. If the money is tight and you need a $1,000 test performed, for instance, you can often negotiate three cash payments, or even use a credit card.
Are you taking full use of the tax-advantaged health savings available to you?
5. Consolidate errands so that you only drive when necessary. Now that gas is so expensive, I take careful notes of how much it costs to drive. My car gets approximately 20 miles to the gallon in town, and I live in a town where my nearest grocery store is 5 miles away. That’s 10 miles roundtrip, or a cost of about $2 every time I want to go to the grocery store.
Not only does consolidating trips save money, but it saves time as well. Alternatively, a website www.dividetheride.com helps find others in your area looking to carpool to activities.
6. Use the foods in your pantry and freezer before buying more. I often find myself buying something I think I need but really don’t, then the food ends up going to waste. This summer I’ve made a decision to use everything in my pantry before I buy more.
To do this, I’ve found the website www.supercook.com useful. You type in the ingredients you have on hand and the website figures out what recipes to make with the ingredients. This also solves the problem of trying to figure out what to make for dinner every night. Normally I spend between $50-100/week on groceries, and I have found by using the ingredients I already have, I have been able to reduce my grocery bills by 30% in the last couple weeks I’ve tried this technique. Also, if you have a plastic bag or food sealer, toss in your leftovers and freeze for a future meal or lunch at work.
Hope these ideas help you. Happy Earning!