4 Ways to Save Money in a Pandemic
2020 has been unbelievably bad for almost each and every one of us. The pandemic has touched our lives in unforgiving ways; socially, economically, financially, and every other angle possible.
If you find yourself sitting on the couch with your head in your hands wondering how you are going to pull through, we hear you. Brighter days are ahead and we will all get through this.
If your woes are financial in nature, we hope that this topic can bring you a bit of quick relief.
Whether you are unemployed or just looking to cut some spending to allow a bit more breathing room in your monthly budget, we’ve identified four areas that you can focus on to put a few extra dollars in your wallet.
1. Do you have insurance of any kind? You’re probably paying too much.
Most people have different combinations of insurance products. Health insurance, car insurance, homeowners insurance, renters insurance, etc. With all of these you are most likely overpaying.
Maybe your car insurance company labels you as a triple diamond platinum member on your renewal invoices. Maybe you are the best driver in the nation, with no accidents or incidents.
Guess what? That company that “values you so much” is not going to re-run your current auto insurance rate to see if you can get a lower rate. That is 100% on you. They have you locked in and they try to keep you loyal by showering nonsensical reward level terms on you.
You also may still be paying for full coverage on a car that might not be worth much, for which simple liability coverage is a better option. The company will not bring this to your attention.
Here’s the reality – you can probably get a better deal (like right now) with a simple phone call.
You may be saying, “But what if I like my car insurance company?” Great question, you don’t have to switch but if you aren’t calling 1-2 other companies (and here’s the kicker) EVERY YEAR to check on prices for the same coverage you have and asking your company to match or beat it, you are probably leaving a lot of money on the table.
Your triple diamond platinum car insurance company could be charging you $50 or $100 more a month than other companies. A cold hard fact: these companies do not have your best interest in mind, regardless of their sentimental commercials. No, they have their own concern top of mind, which is making money. Insurance companies, for most industries, bank on your buying the product and sticking with them for a long time.
The common misconception is that it is hard or stressful to switch companies (it is not) and most people just leave their policies in place for years without checking. Insurance companies love this. They will almost never lower your policy payment in any substantial way because of loyalty or a change in the market rates.
Do you have homeowners insurance? Most people just buy a policy when they get a house and leave it for 10, 20, 30 years and never get another quote. I am guilty of this myself. I had Allstate homeowners insurance I purchased when I got my house. It was paid out of the escrow part of my mortgage payment so it was a leave it and forget it type thing. I thought it would be too complex and time consuming to switch out companies. Maybe I thought too that they would adjust it in my benefit if circumstances went that way since I was a long-term customer.
I was 100% wrong. I got a quote with a competitor and ended up paying nearly half of what I had paid Allstate for the same exact policy. Same coverage levels and everything. This saved me over a hundred a month on my mortgage/escrow payment immediately. All I did was print off my insurance documents showing the coverage levels I currently had and called two competing companies and simply asked them to get me quotes for those coverage levels.
Talking to insurance agents off the record, the best ones and the worst ones say (maybe not publicly) that you need to evaluate your car and homeowners insurance yearly to see if you can get a better deal elsewhere. You owe the company no loyalty if you can get the same coverage for significantly less dollars.
I don’t know about you but an extra couple hundred a month for a few phone calls sounds pretty awesome. Checking in and making sure you are getting the best insurance levels is the most dramatic way that you can cut your monthly spending.
If you have health insurance, that typically is not as negotiable, however, if your health plan has an option for a Flexible Spending Account or FSA, there are several ways for you to save additional dollars and not leave money on the table.
Remember, most people buy a policy and leave it forever and think the insurance company will take care of them because of their loyalty. If this sounds like you, that could be costing you thousands of dollars a year. You need to be your own advocate and find the best deal. The process is much easier than you think and can impact your bottom line almost immediately.
Term life insurance is an exception. In the vast majority of cases you’ll want to leave that as is if you already own it. However, in a good majority of insurance situations we think it is worth your time to call a few competitors and see if you are overpaying.
2. Meal plan like it’s your job (aka trim restaurant spending)
The average American family spends $3,000 per year on restaurants. We love convenience and many of us out there do not like to cook (me included) but if you are struggling to cut costs this is a very tangible impact area. That $3,000 per year works out to $250 per month, so trimming that even a little bit is going to give you more breathing room.
Meal planning is not sexy and it may not even be even fun, but it can certainly leave you with some extra dollars in your account.
Are you an awful/inexperienced cook? If so, you are not alone as there are over a million Americans today who are part of the Instant Pot Community, a place of like minded people striving for home cooked meals with the least amount of effort possible!
Restaurants are enjoyable for us all. Eliminating them completely from your budget shouldn’t be the goal (especially given how many restaurants and their workers are up against the wall financially these days) but getting that expenditure to a more manageable level for you is a noble feat worth pursuing.
3. Cut Unused Subscriptions
Subscriptions are the hottest thing in business. Whether its streaming services, produce delivered to your door, shaving kits, fresh meat delivery, newspapers/newsletters, magazines or designer clothing, companies love charging you monthly fees.
If you are like many Americans, you don’t even realize the total amount each month you spend on subscriptions. In case you were wondering, that figure is $237 per month.
Most people when asked in that survey thought they spent $79 per month. Write out and list each subscription, the cost, and put a checkmark next to it if you used it (or the product) in the last 30 days. If not, you can get rid of it.
I recently cut the cord with our cable and our steaming services now are as follows: Apple TV, YouTube TV, Disney+, CBS, HBO Max, Netflix, Amazon Prime. That is a tremendous number of entertainment options for a person who watches maybe five hours of TV a week. You can slice and dice any of these as well if they are unused.
Here is another interesting point, similar to insurance companies. We, as consumers, usually rationalize not getting rid of a service with statements like “I’ve been with them a long time” or “maybe next month.”
These companies will let you stop your membership and restart it whenever you want, sometimes the very next month. You get no rewards or gold stars for being the longest serving member or most consecutive months paid. If times are tight, cancel that subscription and restart it if you’d like when times are better.
4. Make your own booze
This is our favorite money saving tip by far. It does take a bit more work and practice but we felt like including it because, hey it’s awesome, and it actually can save you a lot of money if you are a wine/beer/seltzer/cider drinker or you have friends that are.
If you are buying bottles of wine at $10-30+ a pop, it isn’t too hard to see the value in having a good quality tasting wine at under $2 a bottle without having to leave your home. Sound too good to be true? It isn’t and it is a pretty fun hobby. You can find out a more detailed how to guide with our blog on making booze.
If you are looking to shave some spending during these unprecedented times, we hope you found this information helpful. Getting the best deals on all insurance products, meal planning, and cutting subscriptions will definitely get you to a more manageable place. And if you like alcohol and want a new hobby, making your own beer and wine will also save you money over time and make everyone want to be your friend.
We may be just a bit over the halfway mark of 2020 but the end is in sight and we hope that we can all turn the page of this frustrating year and hit the reset button in 2021. Cheers!