Tuesday, 22 October 2013
Elder Money Part 2 – Cutting Costs
Yesterday, I failed to explain the topic well enough that readers could figure out what it was. I'm trying to do better today.
The topic of this post is cutting costs - that is, finding ways to reduce what we spend on expenses we're stuck with. These include household utilities, taxes, insurance, transportation and communications that tend to be fixed without much wiggle room.
Today, we'll try to locate some wiggle room.
(Tomorrow we'll get to shopping, sales, coupons, discounts, saving money, food, etc. Please save those ideas for Wednesday.)
These expenses seem to increase year by year so it's important to keep them in check as much as possible. Below are suggestions I've culled from around the web and from my own experience. Please jump in with your own ideas.
•In winter, turn down the thermostat. Sixty-eight degrees works for me these days along with fuzzy slippers and a sweater. I like sleeping in a cold room with lots of quilts so I set the nighttime bedroom temperature at 64.
A few years ago, I had to re-learn what my mother had taught me as a kid: When I complained I was cold, she didn't turn up the heat; she said, “Put on a sweater.”
•In summer, turn the thermostat up. You can probably feel fine at 76 or 77 degrees as at 70 or 72.
•Don't heat or cool rooms that you are not using. I turn on heat in the guest room only when I'm expecting a guest and both bathrooms have wall heaters I turn only while I'm showering or bathing.
•Check the temperature setting on your hot water heater. It can probably be lower than it is. Another money-saving tip is to attach a timer so that water heats only when you regularly use it.
•You can save on water bills by using low flow faucets. Many communities give these away to homeowners for free. Check with your city government but even if they don't, they are a good investment over time.
•Unplug small appliances when you're not using them. Some time ago, I was surprised to learn that even when they are off, they leech electricity. Obviously, you shouldn't unplug refrigerators and other big appliances.
There has always been the techie argument between whether it is good for your hard drive or not to turn off your computer when you're not using it. I turn mine off because computers draw a lot of electricity.
Besides lowering your utility costs, some of these changes also help the environment.
TAXES AND INSURANCE
When I looked into this a few years, I found that there is more money to be saved than I would have guessed.
•Many states have discounts on or deferrals of property taxes for people older than 60 or 62 or 65. Check with your state insurance commissioners office.
If you have equity in your home, intend to remain there and need some additional income, a reverse mortgage can be useful. They are not the fly-by-night operations those awful TV commercials make them seem but you do need to be certain you understand how they work.
A few years ago, I wrote a detailed series about how reverse mortgages. You can read it here.
•As I mentioned yesterday, if at all possible pay your homeowners and auto insurance premiums annually to save carrying charges.
•Comparison shop for auto and homeowners insurance every year. It is not uncommon to find the coverage you have at a lower price. You can also reduce premiums by purchasing homeowners (or renters) and auto insurance from the same company.
•Depending on your personal emergency fund, you can also increase deductibles to lower your premiums.
There is not an elder driver alive who isn't terrified of losing that license. It's good to think ahead in case that day arrives.
•You can save a lot of money by using public transportation when it makes sense. Of course, it helps if you live in such cities as New York and Portland, Oregon that both have excellent systems. Many cities and most suburbs do not.
•When a lived in Manhattan, I never owned a car. When I wanted to drive out of the city, I rented. A friend here is Portland got rid of his car and now uses public transportation exclusively.
When there is an occasional reason for a car in the city, he picks up a Zipcar and he rents, as I did in Manhattan, when he wants to go out of town. Are these ideas possible in your community?
MEDIA AND COMMUNICATIONS
We are in the middle of a lengthy transition in communications so telephones, internet and cable TV are more complicated than they ought to be.
•Telephone landlines are gradually going away but many people still keep one along with a cell phone. You can save money by dropping the landline but, as some of you have noted in the past, it may be needed for emergency services.
•Mobile phones themselves can be expensive or cheap and come in several flavors: prepaid vs. contract vs. pay-as-you-go. Some good news is that the major carriers are dropping the dreaded two-year contract lately so it may be easier to switch – but read the details carefully before you sign on.
•Figure out how much time you need for talking, data and texting and then do your homework online. I'm not going to pretend this is easy.
•The internet – the broadband version – is much more expensive in the United States than in other developed countries and there is not much you can do about it.
Most broadband is available only through monopoly communications companies – one per city – such as Time-Warner, Comcast, Verizon – so unless you are willing to get by with slower speeds, you're stuck with whatever they charge.
•Cable TV is a notoriously expensive. You can cut the chord entirely and rely on the internet (if you've opted for high-speed) for TV shows or buy just the “tiers” you want.
Please be assured that if you like TV, don't be put off by the holier-than-thou who will tell you how how virtuous they are to never watch. There is some excellent entertainment on television these days and no one should be held to another person's smug, no-TV standard. (But it sure saves money)
•That said, you probably don't need a premium channel. In my experience they are way too expensive for a small return.
Not long ago, my cable company gave me HBO for free for six months. I'll cancel it when they start to charge me because there is only one series I was interested in that turned out to not be so good, and I've watched two or three movies in five months. Not worth the cost at all.
•All the major cable companies “bundle” landline telephone, cable and internet. Supposedly, this saves money.
I get a mailing once or twice a month from my cable company trying to get me to add a landline for the bundle price which is always $20 more than I pay now so I don't get the point.
It may be different with your provider.
Now it's your turn. What's worked for you to save money in the areas above?
At The Elder Storytelling Place today, Janet Thompson: Ghosts of Peter Pan