2019 was the year I decided to step up my money game. Before, I had a vague notion of saving for a rainy day, but I saved without purpose. As you can imagine, the results were pretty mediocre. I was enamored with fancy restaurants and drinks and the lifestyle of constant traveling. There was always a reason to spend $25 on a nice meal because I loved food, and another $30 at the airport because it was convenient.
But then I discovered the notion of financial independence, which changed the way I viewed money. Now I firmly believe that money is a resource that shouldn’t be wasted. However, as a normal human being who makes mistakes and is also at the beginning of her financial journey, I was hesitant to try more extreme savings methods such as the cash diet, or quitting restaurants cold turkey. While I do believe in the importance of being good with money, I also don’t want to deprive my life completely of expenses that bring me joy.
So I shifted my focus to see if there were any methods I could use without necessarily drastically changing my lifestyle. I created a spreadsheet of every single line of expenses and looked into each line closely to see where I could trim without wincing. I switched to a credit card that offered better cash rewards and took the full benefit of the sign-up bonus. I switched my cash savings from my regular bank, which offered 0.01% interest, to an online high-yield savings account that offered 2%, but I also used some lesser-known savings methods that provided surprisingly positive results — and added up to a total of $1,400 in savings, year after year.
I negotiated my loan interest.
Because one of my biggest monthly expenses is my mortgage payment, I looked here first to find ways to save. I have a variable mortgage, which means that interest on my mortgage is equal to the prime rate minus the variance. As I scrutinized my contract, the math didn’t add up: The interest rate that I was paying was more than it should be. Should I just let it go? Nope. It was a golden opportunity for some negotiation to my advantage.
I booked an appointment with my mortgage specialist who handled the contract and showed her the document. She admitted there was a math error, but tried to explain it away. I persisted, and she finally acquiesced and honored the variance that was written on the contract. This small change now saves me around $400 per year from the overall interest that I have to pay. Not so bad!
This experience goes to show that while an interest rate seems small, even a tiny difference in percentage can add up to hundreds of dollars of savings. If you have a credit card, for example, you might try calling your credit card company and negotiating a lower rate or, in some cases, considering a balance transfer. The point is, if you have any kind of debt that carries interest, one small change can save you quite a bit year after year.
I switched to an independent Internet provider.
For years, I was with one of the largest Internet service providers, paying a premium thinking that their service would be more reliable. But after seeing my friends’ horrified faces when I told them how much I was paying (around $90/month), I knew it was time to switch.
Service, reliability, and quality are important to me, though. It’d be a disaster if my Internet got interrupted often, or if I couldn’t speak with an agent on the phone. So I spent a lot of time online researching for reviews. I ended up finding a local, independent service provider that seemed to have a good reputation online, and, to my surprise, they actually leverage the infrastructure of the large corporation that I was with, which meant that the quality of the internet wouldn’t be greatly impacted!
I switched in a heartbeat and haven’t looked back since. The service remains reliable, and because the provider is small, it is actually easier to speak to an agent when I need to. Although I had to pay an activation fee and a cancellation fee, the new monthly package, whose cost is just a fraction of what I was paying, made the fees totally worth it. Total savings? Around $600 a year.
I scrutinized my property tax bill and appealed it.
One of the unavoidable expenses as a homeowner is property tax, which is calculated as a percentage of the assessed property value. The higher the assessed property value, the higher the property tax you will have to pay.
Out of pure interest to understand how the process works, I stumbled upon the website of the property assessment corporation for my province (state). Upon logging in, I surprisingly found that I could actually look up the assessed values of any property. My curiosity led me to click on properties in my neighborhood, and I noticed that for some reason, my house was actually valued much higher than those of my neighbors that were similar in size.
That doesn’t seem right. I ended up giving the corporation a phone call and found out there’s a process for appealing your assessment. My philosophy is “it never hurts to try,” so I submitted an application just to see what could happen. Lo and behold, the corporation actually reduced my property value, which saves me around $300 a year on property tax!
The lesson here is twofold: Pay attention to where your money is going because no one else is going to do it for you. Second, it doesn’t hurt to ask. Even if you don’t pay property tax, these lessons are applicable to other expenses you have.
I took advantage of unadvertised discounts.
As I moved down the lines of expenses on my spreadsheet, I inevitably saw “auto insurance” staring right into my face. With the success I had with my mortgage lender and the property assessment corporation, I wanted to take on the challenge to see if I could somehow manage to reduce my monthly auto insurance premium as well.
After some wait on the call, I finally got through to an agent. It turned out that by simply having winter tires, which I always do in winter, I qualified for a Winter Tire Discount. On top of that, because I don’t drive as much as I used to since I moved closer to where I work, I could report a reduction in my annual mileage, which decreased my premium even further. Although this is just a small win of around $100 a year, I am still very pleased. It’s another $100 in my pocket. It’s worth calling your own provider and asking what specific discounts they have available that they might not explicitly advertise.
Although I did have to spend time researching online, going to appointments, and talking on the phone, overall, it was worth it to try these methods. Because of the recurring nature of these expenses, the money saved represented an extra $1,400 in my pocket every year, which, even if you just put it away into a high-yield savings account with 2% interest, can amount to more than $15,000 in 10 years. Not bad for a few phone calls.
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