Houses Illustration

Welcome to
Tenant Ideas

Lightbulb Logo

CUTTING COSTS



BUDGETING

A budget is a cross between a plan and an accounting of your income and expenses. First the accounting:Let’s start with your income. If you are an employee, taxes will be withheld from your paycheck by your employer. But wait a second, how much your employer withholds from each paycheck depends on what you tell your employer…how many jobs do you have? Does your spouse also work? Does he/she have money withheld from his/her paycheck? Do you have a side-gig as an independent contractor? Are you expecting any tax credits? The answers to these questions, and more, can affect the amount of taxes to be withheld from your paycheck. The bottom line is that the amount of tax to be withheld must meet a certain threshold, otherwise additional tax, penalties, and interest may be due. That threshold is 90% of the final amount of tax you will need to pay for the year. In other words, if your employer only withholds 80% of the tax you end up owing for the year, you could be penalized for missing the 90% threshold. The government form to be filled out is known as the W-4 form. For a sample of the form and instructions, see https://www.irs.gov/pub/irs-pdf/fw4.pdf.

If you are self-employed, you will need to pay your own taxes, probably on a quarterly estimated basis. Furthermore, you will need to pay the employee’s portion of Social Security and Medicare, as well as the employer’s portion. At this time, the combined total, amounts to 12.4% for Social Security and 2.9% for Medicare.

For budgeting purposes, let’s start with the amount of income you bring home after taxes are withheld. Let’s assume, for example, that your monthly take-home pay is $3,000. Next, we have to add up all your monthly expenses. I’m going to make up some numbers which will probably differ from yours, but you can supply your own numbers after some research. Rent = $600, Utilities = $200, Renter’s insurance = $20, Car insurance = $80, Car payment = $300, Food = $400, Clothing (on average) = $100, Gas = $100, Entertainment = $50, Phone = $50, Education = $25, Furniture = $80, and Miscellaneous = $50. Total expenses = $2,055. That leaves $945 for other. Some people would give 10% to charity, or $300. Others would save 10% for a rainy day or retirement…$300. Some people have student loan payments. That could be $300-$500 per month. Some people have all of the above. Without charity, and student loans, that still leaves $945 to save and invest. On the other hand, if you give $300 to charity and pay $400 on a student loan, that leaves $245 to save and invest.

When you know where your money is going each month (the accounting part of budgeting), you can reassess your priorities and determine where reductions in expense or increases in income can be made. This is the planning phase of budgeting. Once you have a plan for how to improve your finances, it is a matter of self-discipline to make it happen. “Self-discipline” means foregoing some spending now so you have a cushion in case of an emergency in the short run, and, if done wisely, a retirement fund in the long run. If you make a habit of saving part of each paycheck, then saving happens routinely.

Another tool that may help you streamline your bill paying is to set up automatic bill payments. For any regularly scheduled payments, such as rent, utilities, car payments, student loan payments, insurance, house payments, etc., having the payment automatically made on time can save you time and promote a good credit score. In general, some vendors may have an arrangement where they can take the required payment from your account (good for amounts that vary from month to month, such as utilities bills), while other vendors need to be paid by your bank transferring the funds. There are also cash transfer apps that can be used. See https://www.investopedia.com/search?q=money+transfer.

CREDIT SCORES

Speaking of credit scores, part of your plan could include improving your credit scores. See https://www.investopedia.com/search?q=credit+scores There are several organizations that calculate credit scores and each one has its own formula. The major credit reporting bureaus are Experian, TransUnion, and Equifax. And then there’s FICO, which draws information from multiple sources.

In general, the credit reporting bureaus consider the following factors:Payment history, amounts owed, credit history, mix of types of credit, and new credit with payment history being the most important. Payment history attempts to quantify how consistently you make on-time payments. Thus, any missing or late payments can significantly negatively affect your score.

Amounts owed are generally calculated as a percent of available credit. For example, if you have one credit card with a $1,000 credit limit, and you typically have a balance on that card of $700, the balance would be 70% of your available credit. Lower percentage usages contribute to a better credit score. This can be accomplished in one of three ways:reduce the charges on that card, or ask to have a higher credit limit. If you have a good payment history, the credit card company may actually raise your credit limit when you ask for it. Or, you can apply for an additional card. Even if the credit limit on the new card is low, it adds to your total available credit limit. Some years ago, when credit was easy, I applied for a credit card and asked for a credit limit of $500. I also stated that my income was $0. I received the card! You may not have the same results if you give the same information.

Your credit history is comprised of the different types of credit you have received and how long you have been borrowing money. Types of credit include credit cards, installment loans, mortgages, lines of credit, etc. A long credit history with a variety of different types of loans with prompt payments may increase your score.

When applying for a new credit account, the creditor will usually contact the credit bureau, resulting in what the bureau calls a “hard inquiry.” Too many hard inquiries may negatively impact your credit score. This impact is generally fairly small and the hard inquiry will be removed from your record in about two years.

In my experience, credit scores are important because they can determine whether you can borrow money, how much you can borrow, and the interest rate you pay when borrowing funds. In short, they act as an easy reference for creditors to see how likely you are to make timely payments and pay off a loan.

FINDING GOOD DEALS


Finding Value

Finding good deals requires a knowledge of values. That could be for clothes, cars, timber, land, houses, apartments, or internet service…you name it. What you’re really looking for is the best value; i.e., the best quality product for the price (within your price range). That means the product will either last longer, or you can make a profit by buying it low and selling it high. By finding/buying good deals, you are cutting costs up front.

Apartment Hunting

Let’s start with our search for an apartment. According to Nationwide Insurance Company, there are ten ways to find an apartment. See https://blog.nationwide.com/home/home-renting/how-to-find-a-rental-home/. In my experience, lots of tenants use Craigslist.com and Apartments.com. They might also see a sign in front of a building with an apartment for rent. And word of mouth still works. Friends, co-workers, employers, and relatives are all happy to offer suggestions or keep an eye out to help in your search for an apartment. Oft times, landlords may have their own web site or they may post pictures of their apartments on a web site. Of course, there’s no substitute for viewing an apartment. By viewing apartments, you get to see what is available for how much. In other words, you learn value. Are most of the affordable apartments dumps, or are there lots of nice reasonably-priced apartments in the neighborhood you want to rent in?

A word of caution…apparently some landlords post pictures of other peoples’ apartments because I’ve occasionally had a prospective tenant want to verify that my apartments look like the pictures on line. I even had one guy say that he would take the apartment if the apartment looked like the pictures I had posted on line. Unfortunately, that’s not an acceptance of my offer to rent to him and since he was out of town and wouldn’t be able to look at the apartment for another week, I rented it to someone else in the meantime. He snatched defeat out of the jaws of victory.

Products

What about products? Where else do we look for good deals? Traditionally, we looked in the used market for things that hadn’t been used up. More recently, we might find good deals among surplus goods; i.e., an overstock by a vendor (see Overstock.com), or goods that have an expired “best buy” date. My dad’s favorite store was the local Salvation Army Thrift store. They have used clothes, furniture, books, and more. See https://satruck.org/. Another possibility is businesses that are “going out of business.” For a list of eight sites that cater to “going out of business” sales, see https://www.makeuseof.com/tag/4-sites-to-find-stores-going-out-of-business-and-buy-up-surplus-for-cheap-nb/. Oft times, smaller businesses that are going out of business will post bandit signs around town prior to closing down. I once bought a very expensive camera for my print shop at 10 cents on the dollar at a “going out of business” sale. At the end of that sale, they were giving away stuff to anyone who would haul it away! I had to go back for a second truck load.

Used Items

Yard sales are also known for having good deals. I’ve seen towns where a whole neighborhood will designate a specific day or days on which to hold yard sales. Those are usually advertised in a local paper or with bandit signs around town. Craigslist is also a popular place to look for good deals. See Craigslist.org.

New Items

On the other hand, we don’t necessarily have to look for used items. We could find good deals on many new products. For example, Dollar General (to find a store near you, see https://www.dollargeneral.com/store-locator?s), Dollar Tree (for a store near you, see https://www.dollartree.com/store-locator), and Family Dollar (locate a store nearby at https://locations.familydollar.com/store-locator#) specialize in finding good deals and passing them along to consumers. Even Wal-Mart can have good deals at times. To locate a Wal-Mart store near you, see https://www.walmart.com/store-finder?location. Some service providers also have special promotions, sales, family plans, or budget plans. For example, plans and pricing for internet service, phone service, and streaming services change on an ongoing basis. A phone plan that was a bargain when you signed up may no longer be competitive. If you have had your internet, phone, or streaming service for a while, it may be a good idea to check out the competition. I know that for phone service, it may pay to call in annually to ask your current provider whether they can offer you a better rate or plan. For a list of cell phone providers, see https://www.whistleout.com/CellPhones. For internet service providers for your address, see https://www.allconnect.com/internet. To compare some streaming services, see https://www.moneygeek.com/financial-planning/resources/best-streaming-services-on-a-budget/.

Farmers’ Markets

Lastly, I would like to mention farmers’ markets. It may be possible to haggle over the price of certain items at such markets. I remember attending a farmers’ market that ended at 12:00 noon, and during the last ten minutes, the farmers were dropping prices so they wouldn’t have to take all that stuff back home. That’s another place to find good deals on food.

BUYING IN BULK

Of course, what all retail stores try to do is buy in bulk and sell items one or two at a time. On the other hand, just about any store will gladly sell you a large quantity at a discounted price. I’ve purchased large quantities at a discounted price from Ace Hardware (to find a store, see https://www.acehardware.com/store-locator) as well as Aldi (to find a store, see https://stores.aldi.us/). Lowe’s (to find a store, see https://www.lowes.com/store/), and Home Depot (to find a store, see https://www.homedepot.com/l/storeDirectory) even offer its bigger customers free money. That means that if you buy a large enough quantity of stuff, you can take 6, 12, 18, or even 24 months to pay it off with no interest charged. If you’re renovating an apartment, that gives you time to fix it up, rent it out, and pay off the bill with the help of the rental income you receive. Other items that can be purchased in bulk include: salt, sugar, plants, meat, cheese, coffee, printed items, clothing, building supplies, ammunition, and much more…just about everything. If you were to accumulate one particular item and your neighbor accumulates a different item, you could trade items. If you know twenty people who have accumulated items for trade, you might even have a self-sufficient club?

CLUBS

Club: An association of people for some common goal or purpose. Anywhere there are enough like-minded customers who band together to buy in bulk, you can have a club. Some stores require people to “join” their club to get discounted prices (their common goal).

Sam’s Club (to find a store, see https://www.samsclub.com/locator) and Costco (to find a store, see https://www.costco.com/warehouse-locations) are the first clubs that come to mind, but there are others (for others, see https://www.similarstores.com/like/Sams-Club). Even Ace Hardware has good deals for its bigger customers. A club of bigger customers? Farmer coops are a kind of club. See www.LocalHarvest.org for a farmer or farmers’ market near you. There are even investment clubs. When I was a kid, my dad formed an investment club among the professors at the college in which he taught. To learn more about investment clubs, see https://www.investopedia.com/terms/i/investmentclub.asp.

CHARITIES

Charities usually give things away for free. If you are on the receiving end of that gift, you will definitely cut your costs. United Way tries to cover the waterfront when it comes to helping people with a variety of problems. Alternately, for a list of food banks, see Food Banks by County.

Churches also fill a need when it comes to food and bereavement counseling. Consider a GriefShare group sponsored by a church near you. See GriefShare. To find a church near you, visit Church Finder.

AUCTIONS

When you participate in an auction, you are competing with other people who either don’t know what they’re doing, or who do know what they are doing. If they do know what they’re doing, they know the value of the things they are bidding for. Hopefully, you will too, and you’ll know when to stop bidding. There are still plenty of local auctions you can attend by auctioneers who advertise in the local newspaper or by posting signs around town.

There are auction websites for just about everything these days. For example, Heritage Auctions boasts that they are the world’s largest collectibles auctioneer. See https://www.ha.com/. Auction Zip lists auctioneers by state and some auctions in those states. You can also search by category. See https://www.auctionzip.com/. The U.S. government, through the General Services Administration, also auctions things off. These are presumably items that are no longer needed or things that were seized by the government. See https://gsaauctions.gov/auctions/home. And then there’s Copart.com that specializes in selling used cars, with an inventory of almost 200,000 cars and 200 locations worldwide. See https://www.copart.com/. There’s even an auction site that works through other auction sites and specializes in “one of a kind art, antiques, and luxury goods.” See https://www.liveauctioneers.com/. If you’re willing to buy in bulk, that means at least a pallet or maybe a truckload of stuff, see https://bstock.com/all-auctions/. The last auction site I’m going to mention claims to be the nation’s leading online investment property marketplace. You can find them at www.Auction.com. If you don’t find an auction site that offers what you are looking for, search for “Auctions” in your browser. There are plenty more than the handful listed above.

UTILITIES

How can you cut your utilities bill? To me, that means 1. heat, 2. water, 3. electricity, 4. garbage, 5. cable, and 6. sewer.

Heat

1. HEAT: Obviously the answer is different for everyone. Some people turn their thermostat down during the day while they are at work. Others turn their thermostat down during the night while they sleep with an extra blanket over them (assuming a cold climate). And other people leave their thermostat down all the time. On the other hand, some people work from home and need heat while they work. Some people heat with natural gas. Some people use electricity. And other people use heating oil or propane. Furthermore, most landlords limit what you may do to an apartment to make it warmer or cooler and you need to run any ideas by your landlord before you get carried away. This makes it difficult to recommend any one course of action, however, one universal truth is that heat rises. So, if you live in an upstairs apartment in a northern (read cold) climate, you may benefit from the heat from a lower apartment during the winter. Also, if you live in an apartment complex with multiple side-by-side apartments, you can gain heat from the neighboring apartments. When I have a vacant apartment that is next to another apartment, I can generally turn the heat down to 50 degrees and have the neighboring apartments keep my bill to a minimum. If you are in an older building with leaky windows, a sheet of plastic can work wonders. Your landlord will have an opinion on how to attach the plastic. Draft stoppers under doors, behind light switches, and receptacle covers can help if there’s a draft coming in there. Weather stripping around doors and windows may also make a difference…caulking too. Carpets or throw rugs can help keep the floor warmer. If you live in a more southerly climate, where heating isn’t as important, and cooling is, you still need to do a better job of sealing your apartment to keep the heat out during the summer instead of keeping the cold out during the winter. Something else I’ve noticed after a tenant moves out is that frequently the windows are not closed and locked. Closing them and locking them can make a big difference in one’s heating bill. I know it sounds simple, but it’s amazing how often I find this phenomenon after someone moves out. Go ahead, see if your windows are closed and locked.

Water

2. WATER: In my experience, the biggest waste of water occurs when there’s something wrong with the toilet and it keeps running. This problem can easily double your water bill. Other leaks can also be devastating…even minor ones. And as strange as it sounds, I have had water pipes break for no apparent reason. A periodic check to make sure there aren’t any leaks can’t hurt. With the invention of PEX and shark bites, plumbing problems are so much easier and faster to repair. I’ve also had the water company replace water meters because they were faulty. Something else to consider is the use of water saving faucets and shower heads. That may be something your landlord would install or that he may let you install. You can ask. There’s also the remote possibility that if you don’t have a modern remote meter reader, there could be an error in reading the meter. Something you can do is read your own water meter regularly and compare your readings with those of the water company to make sure they are getting accurate readings.

Electricity

3. ELECTRICITY: Unless you are Amish, you’ll be using electricity to run your lights, many appliances, computers, air conditioners, and maybe even some electric baseboard heaters or heat exchangers. Your electric bill can add up to a substantial amount if you aren’t careful. If your heat is electric, see the section on Heat above.

Something you should be aware of is that most electric utilities companies give tenants the option of using their “budget plan.” In my area, the way that works is that the electric company calculates the average monthly usage for your apartment based on the prior year’s usage (which could vary widely from what you will use) and have you pay that average amount for a number of months until they can get a better idea of your usage. Then they may adjust your amount, but the idea is to average out your monthly bill so that you’re paying roughly the same amount every month rather than paying a higher amount in the winter and a nominal amount in the summer or a higher amount in the summer (because of more air conditioning) and a lower amount during the winter, depending on your climate.

Nowadays, there are more efficient light bulbs (LED) available from some electric companies and definitely from your local hardware store. They may be worth a little more in the short run to save some money in the long run.

One last thought about electricity usage is that you might turn all your appliances, lights, and anything else that draws electricity off and see whether your meter still registers some usage. Don’t forget about your refrigerator. And don’t forget to turn everything back on after you’ve verified that the meter is working properly and that no one else is tapped into your meter and using your electricity. If someone else is using your electricity, you should notify your landlord. If he/she doesn’t do anything about it, you might contact your electric supplier (utility company).

Garbage

4. GARBAGE: Many landlords supply dumpsters for their tenants. Other places require their tenants to get a garbage can and pay for their own garbage service. On the one hand, I’ve seen dumpsters regularly filled to over-flowing. (Some people don’t know how to cut boxes down.) On the other hand, I’ve seen municipalities require their residents to use a garbage collection service and have the collection company more than double their government-granted monopolistic collection rates. In other words, there are pros and cons for each scenario.

Sewer

6. SEWER: Sewer services are oft times supplied by municipalities or sewer authorities because of the large cost associated with building a sewer plant to purify the sewage. This means that the local government often is the entity that bills the customers. Furthermore, they generally bill the landlords and not the tenants. Your landlord may or may not have you reimburse them for the cost of the sewer bill. Your rental agreement will probably clarify how that is handled. I don’t know of any way to reduce your sewer bills, except to use less water.

RENTER’S INSURANCE

Some landlords require their tenants to purchase renters’ insurance. Some don’t. I didn’t, until I had a tenant who had a stove fire. The lady of the house started cooking something on the stove and went outside to talk with a neighbor. At some point, she noticed the smoke billowing out of the open door, ran inside, woke up her husband, grabbed the baby and went outside to call the fire company. Meanwhile, he grabbed a fire extinguisher and put out the fire. Shortly thereafter, the fire company showed up. They were concerned that there could be some embers in the ceiling above the stove and proceeded to chop a hole in the ceiling. Between the smoke damage throughout the apartment and the fire company’s handiwork, there was $13,000 worth of damage. The tenant did not have renter’s insurance. Consequently, the tenant ended up buying me a new stove, covering my $250 insurance policy deductible, and they were still on the hook for the $13,000 worth of damage to my insurance company (that covered the damage) when they moved out shortly thereafter. If they had had renter’s insurance, most of that would have been covered by their insurance company. Shortly thereafter, I mentioned to another tenant of mine what had happened and he went to his car insurance company and asked for renter’s insurance. Because he already had insurance with that company, they gave him a discount on his car insurance…that was enough to cover the cost of the renter’s insurance. Ever since then, I’ve required my tenants to obtain renter’s insurance. Not only does renter’s insurance cover the tenant’s property, but, under certain circumstances, it can also cover the landlord’s property, as well. Naturally, you need to talk with your insurance agent/broker to make sure you get the kind of coverage/deductible you want.

In my opinion, the potential problem with insurance companies is that some companies try to get out of paying for certain things. In other words, they fight you and your claim, while other companies pay without asking many questions. The difference could be how straight forward your claim is. If it’s a simple claim, they may pay promptly. If it’s more complicated, they may have objections or reservations about paying for everything up front. Unfortunately, I’m not an insurance expert, so you might want to ask around and see what experiences your friends, etc. have had with their insurance companies before you decide where to buy your insurance. In any event, it would be a good idea to take pictures of your apartment after you’ve moved in. That way, if there is a loss, it will be a lot easier to prove to the insurance company what you lost.

PLANT A GARDEN/GROW YOUR OWN FOOD

If you think you’re going to plant a garden next Spring to cut your food bill and you’ve never planted a garden before, you need to start sooner rather than later…with planning. That means you need to think about what you’re going to plant (will it grow in your climate), when to plant your plants (depending on weather), where you’re going to plant your plants (will they get adequate sunshine), do you need to improve your soil (with compost or a cover crop), and where is your water coming from (well, river, rain, or a municipal source), to name a few things to consider.

While planting a garden can seem overwhelming, you don’t have to start out with a large garden. You can start with a plant or two to see what it takes. If you don’t know how to start, there are plenty of YouTube videos that can help you get started. Here’s gardener Scott to tell you what I just told you:https://www.youtube.com/watch?v=02ABs-4znQ0.

In small town USA, many houses have a yard where you can grow a garden. Okay, so you don’t know anything about growing a garden. Once again, there are lots of people offering how-to videos or text material on YouTube to show you how to plant a garden. Here are three samples:https://www.youtube.com/watch?v=KLtsTuc2Tuk, https://www.almanac.com/vegetable-gardening-for-beginners, https://www.youtube.com/watch?v=6MwLumQEFeo.

If you don’t have room for a garden, there are still some possibilities.

I heard of a lady who wanted a garden, but didn’t own any land. She went to her neighbors and made a deal with them. She would plant a garden on their land and give them half of what she grew if she could have the other half of what she grew. In other words, she traded her labor and know-how for the use of someone else’s land. After while, she had people coming to her asking her to use their land.

Garden starter kits are also available. Many of them are suitable for indoors. See https://www.etsy.com/market/garden_starter_kit and/or https://www.gardengatemagazine.com/review/garden-starter-kit/.

Hydroponics—the use of water to feed plants the nutrients they need to grow, without the use of soil. Hydroponics can be used on a small scale, or on a large scale. There are even kits available for home use. For a list of 50 possible set ups, see https://www.amazon.com/Best-Sellers-Hydroponic-Growing-Kits-Systems/zgbs/lawn-garden/23539046011.

Cost of Commuting vs. Rent

With the advent of the COVID scare, many people tried to distance themselves from the larger cities. This worked if you could work from home, but what if you had to commute a greater distance to and from work? Then you had to calculate the added cost of going the additional miles. Ok, so the rents are generally lower the further away from the cities you move, however, there’s obviously a trade-off there…in both time and money. And then there’s the added risk of being on the road more.

If I have to drive an extra 40 miles per day by moving out of the city and my vehicle gets 20 miles per gallon, I’ll have to pay an additional $35 per week (or $140 per month), assuming gas costs $3.50/gallon. So, the question becomes, will I save $140 per month in rent by moving 20 miles further out of the city? That depends on the city and the cost of rent and gas over the period of time that we’re talking about.

Addictions

Addictions can be costly and even ruin your life. I had one tenant who became addicted to drugs and stopped paying her rent. Fortunately for me, she moved out of her own accord, and her mother (who had co-signed the rental agreement) covered the rent. For more information about overcoming an addiction, see HelpGuide: Addictions.

Bankruptcy

Bankruptcy is a very complicated area of the law, and if you are contemplating filing for bankruptcy, you would be well advised to seek the counsel of an attorney who specializes in bankruptcy law. How does one find a bankruptcy attorney, you ask? See Debt.org: Find a Bankruptcy Attorney for some ideas.

Bankruptcy matters are generally brought before a U.S. bankruptcy court, which is a unit within a U.S. district court. There are 94 federal districts in the United States. According to the U.S. bankruptcy court, bankruptcy helps people who can no longer pay their debts get a fresh start by liquidating assets to pay their debts or by creating a repayment plan. To see what else the bankruptcy court has to say about bankruptcy, visit U.S. Bankruptcy Court.


CUTTING COSTS



BUDGETING

A budget is a cross between a plan and an accounting of your income and expenses. First the accounting:Let’s start with your income. If you are an employee, taxes will be withheld from your paycheck by your employer. But wait a second, how much your employer withholds from each paycheck depends on what you tell your employer…how many jobs do you have? Does your spouse also work? Does he/she have money withheld from his/her paycheck? Do you have a side-gig as an independent contractor? Are you expecting any tax credits? The answers to these questions, and more, can affect the amount of taxes to be withheld from your paycheck. The bottom line is that the amount of tax to be withheld must meet a certain threshold, otherwise additional tax, penalties, and interest may be due. That threshold is 90% of the final amount of tax you will need to pay for the year. In other words, if your employer only withholds 80% of the tax you end up owing for the year, you could be penalized for missing the 90% threshold. The government form to be filled out is known as the W-4 form. For a sample of the form and instructions, see https://www.irs.gov/pub/irs-pdf/fw4.pdf.

If you are self-employed, you will need to pay your own taxes, probably on a quarterly estimated basis. Furthermore, you will need to pay the employee’s portion of Social Security and Medicare, as well as the employer’s portion. At this time, the combined total, amounts to 12.4% for Social Security and 2.9% for Medicare.

For budgeting purposes, let’s start with the amount of income you bring home after taxes are withheld. Let’s assume, for example, that your monthly take-home pay is $3,000. Next, we have to add up all your monthly expenses. I’m going to make up some numbers which will probably differ from yours, but you can supply your own numbers after some research. Rent = $600, Utilities = $200, Renter’s insurance = $20, Car insurance = $80, Car payment = $300, Food = $400, Clothing (on average) = $100, Gas = $100, Entertainment = $50, Phone = $50, Education = $25, Furniture = $80, and Miscellaneous = $50. Total expenses = $2,055. That leaves $945 for other. Some people would give 10% to charity, or $300. Others would save 10% for a rainy day or retirement…$300. Some people have student loan payments. That could be $300-$500 per month. Some people have all of the above. Without charity, and student loans, that still leaves $945 to save and invest. On the other hand, if you give $300 to charity and pay $400 on a student loan, that leaves $245 to save and invest.

When you know where your money is going each month (the accounting part of budgeting), you can reassess your priorities and determine where reductions in expense or increases in income can be made. This is the planning phase of budgeting. Once you have a plan for how to improve your finances, it is a matter of self-discipline to make it happen. “Self-discipline” means foregoing some spending now so you have a cushion in case of an emergency in the short run, and, if done wisely, a retirement fund in the long run. If you make a habit of saving part of each paycheck, then saving happens routinely.

Another tool that may help you streamline your bill paying is to set up automatic bill payments. For any regularly scheduled payments, such as rent, utilities, car payments, student loan payments, insurance, house payments, etc., having the payment automatically made on time can save you time and promote a good credit score. In general, some vendors may have an arrangement where they can take the required payment from your account (good for amounts that vary from month to month, such as utilities bills), while other vendors need to be paid by your bank transferring the funds. There are also cash transfer apps that can be used. See https://www.investopedia.com/search?q=money+transfer.

CREDIT SCORES

Speaking of credit scores, part of your plan could include improving your credit scores. See https://www.investopedia.com/search?q=credit+scores There are several organizations that calculate credit scores and each one has its own formula. The major credit reporting bureaus are Experian, TransUnion, and Equifax. And then there’s FICO, which draws information from multiple sources.

In general, the credit reporting bureaus consider the following factors:Payment history, amounts owed, credit history, mix of types of credit, and new credit with payment history being the most important. Payment history attempts to quantify how consistently you make on-time payments. Thus, any missing or late payments can significantly negatively affect your score.

Amounts owed are generally calculated as a percent of available credit. For example, if you have one credit card with a $1,000 credit limit, and you typically have a balance on that card of $700, the balance would be 70% of your available credit. Lower percentage usages contribute to a better credit score. This can be accomplished in one of three ways:reduce the charges on that card, or ask to have a higher credit limit. If you have a good payment history, the credit card company may actually raise your credit limit when you ask for it. Or, you can apply for an additional card. Even if the credit limit on the new card is low, it adds to your total available credit limit. Some years ago, when credit was easy, I applied for a credit card and asked for a credit limit of $500. I also stated that my income was $0. I received the card! You may not have the same results if you give the same information.

Your credit history is comprised of the different types of credit you have received and how long you have been borrowing money. Types of credit include credit cards, installment loans, mortgages, lines of credit, etc. A long credit history with a variety of different types of loans with prompt payments may increase your score.

When applying for a new credit account, the creditor will usually contact the credit bureau, resulting in what the bureau calls a “hard inquiry.” Too many hard inquiries may negatively impact your credit score. This impact is generally fairly small and the hard inquiry will be removed from your record in about two years.

In my experience, credit scores are important because they can determine whether you can borrow money, how much you can borrow, and the interest rate you pay when borrowing funds. In short, they act as an easy reference for creditors to see how likely you are to make timely payments and pay off a loan.

FINDING GOOD DEALS


Finding Value

Finding good deals requires a knowledge of values. That could be for clothes, cars, timber, land, houses, apartments, or internet service…you name it. What you’re really looking for is the best value; i.e., the best quality product for the price (within your price range). That means the product will either last longer, or you can make a profit by buying it low and selling it high. By finding/buying good deals, you are cutting costs up front.

Apartment Hunting

Let’s start with our search for an apartment. According to Nationwide Insurance Company, there are ten ways to find an apartment. See https://blog.nationwide.com/home/home-renting/how-to-find-a-rental-home/. In my experience, lots of tenants use Craigslist.com and Apartments.com. They might also see a sign in front of a building with an apartment for rent. And word of mouth still works. Friends, co-workers, employers, and relatives are all happy to offer suggestions or keep an eye out to help in your search for an apartment. Oft times, landlords may have their own web site or they may post pictures of their apartments on a web site. Of course, there’s no substitute for viewing an apartment. By viewing apartments, you get to see what is available for how much. In other words, you learn value. Are most of the affordable apartments dumps, or are there lots of nice reasonably-priced apartments in the neighborhood you want to rent in?

A word of caution…apparently some landlords post pictures of other peoples’ apartments because I’ve occasionally had a prospective tenant want to verify that my apartments look like the pictures on line. I even had one guy say that he would take the apartment if the apartment looked like the pictures I had posted on line. Unfortunately, that’s not an acceptance of my offer to rent to him and since he was out of town and wouldn’t be able to look at the apartment for another week, I rented it to someone else in the meantime. He snatched defeat out of the jaws of victory.

Products

What about products? Where else do we look for good deals? Traditionally, we looked in the used market for things that hadn’t been used up. More recently, we might find good deals among surplus goods; i.e., an overstock by a vendor (see Overstock.com), or goods that have an expired “best buy” date. My dad’s favorite store was the local Salvation Army Thrift store. They have used clothes, furniture, books, and more. See https://satruck.org/. Another possibility is businesses that are “going out of business.” For a list of eight sites that cater to “going out of business” sales, see https://www.makeuseof.com/tag/4-sites-to-find-stores-going-out-of-business-and-buy-up-surplus-for-cheap-nb/. Oft times, smaller businesses that are going out of business will post bandit signs around town prior to closing down. I once bought a very expensive camera for my print shop at 10 cents on the dollar at a “going out of business” sale. At the end of that sale, they were giving away stuff to anyone who would haul it away! I had to go back for a second truck load.

Used Items

Yard sales are also known for having good deals. I’ve seen towns where a whole neighborhood will designate a specific day or days on which to hold yard sales. Those are usually advertised in a local paper or with bandit signs around town. Craigslist is also a popular place to look for good deals. See Craigslist.org.

New Items

On the other hand, we don’t necessarily have to look for used items. We could find good deals on many new products. For example, Dollar General (to find a store near you, see https://www.dollargeneral.com/store-locator?s), Dollar Tree (for a store near you, see https://www.dollartree.com/store-locator), and Family Dollar (locate a store nearby at https://locations.familydollar.com/store-locator#) specialize in finding good deals and passing them along to consumers. Even Wal-Mart can have good deals at times. To locate a Wal-Mart store near you, see https://www.walmart.com/store-finder?location. Some service providers also have special promotions, sales, family plans, or budget plans. For example, plans and pricing for internet service, phone service, and streaming services change on an ongoing basis. A phone plan that was a bargain when you signed up may no longer be competitive. If you have had your internet, phone, or streaming service for a while, it may be a good idea to check out the competition. I know that for phone service, it may pay to call in annually to ask your current provider whether they can offer you a better rate or plan. For a list of cell phone providers, see https://www.whistleout.com/CellPhones. For internet service providers for your address, see https://www.allconnect.com/internet. To compare some streaming services, see https://www.moneygeek.com/financial-planning/resources/best-streaming-services-on-a-budget/.

Farmers’ Markets

Lastly, I would like to mention farmers’ markets. It may be possible to haggle over the price of certain items at such markets. I remember attending a farmers’ market that ended at 12:00 noon, and during the last ten minutes, the farmers were dropping prices so they wouldn’t have to take all that stuff back home. That’s another place to find good deals on food.

BUYING IN BULK

Of course, what all retail stores try to do is buy in bulk and sell items one or two at a time. On the other hand, just about any store will gladly sell you a large quantity at a discounted price. I’ve purchased large quantities at a discounted price from Ace Hardware (to find a store, see https://www.acehardware.com/store-locator) as well as Aldi (to find a store, see https://stores.aldi.us/). Lowe’s (to find a store, see https://www.lowes.com/store/), and Home Depot (to find a store, see https://www.homedepot.com/l/storeDirectory) even offer its bigger customers free money. That means that if you buy a large enough quantity of stuff, you can take 6, 12, 18, or even 24 months to pay it off with no interest charged. If you’re renovating an apartment, that gives you time to fix it up, rent it out, and pay off the bill with the help of the rental income you receive. Other items that can be purchased in bulk include: salt, sugar, plants, meat, cheese, coffee, printed items, clothing, building supplies, ammunition, and much more…just about everything. If you were to accumulate one particular item and your neighbor accumulates a different item, you could trade items. If you know twenty people who have accumulated items for trade, you might even have a self-sufficient club?

CLUBS

Club: An association of people for some common goal or purpose. Anywhere there are enough like-minded customers who band together to buy in bulk, you can have a club. Some stores require people to “join” their club to get discounted prices (their common goal).

Sam’s Club (to find a store, see https://www.samsclub.com/locator) and Costco (to find a store, see https://www.costco.com/warehouse-locations) are the first clubs that come to mind, but there are others (for others, see https://www.similarstores.com/like/Sams-Club). Even Ace Hardware has good deals for its bigger customers. A club of bigger customers? Farmer coops are a kind of club. See www.LocalHarvest.org for a farmer or farmers’ market near you. There are even investment clubs. When I was a kid, my dad formed an investment club among the professors at the college in which he taught. To learn more about investment clubs, see https://www.investopedia.com/terms/i/investmentclub.asp.

CHARITIES

Charities usually give things away for free. If you are on the receiving end of that gift, you will definitely cut your costs. United Way tries to cover the waterfront when it comes to helping people with a variety of problems. Alternately, for a list of food banks, see Food Banks by County.

Churches also fill a need when it comes to food and bereavement counseling. Consider a GriefShare group sponsored by a church near you. See GriefShare. To find a church near you, visit Church Finder.

AUCTIONS

When you participate in an auction, you are competing with other people who either don’t know what they’re doing, or who do know what they are doing. If they do know what they’re doing, they know the value of the things they are bidding for. Hopefully, you will too, and you’ll know when to stop bidding. There are still plenty of local auctions you can attend by auctioneers who advertise in the local newspaper or by posting signs around town.

There are auction websites for just about everything these days. For example, Heritage Auctions boasts that they are the world’s largest collectibles auctioneer. See https://www.ha.com/. Auction Zip lists auctioneers by state and some auctions in those states. You can also search by category. See https://www.auctionzip.com/. The U.S. government, through the General Services Administration, also auctions things off. These are presumably items that are no longer needed or things that were seized by the government. See https://gsaauctions.gov/auctions/home. And then there’s Copart.com that specializes in selling used cars, with an inventory of almost 200,000 cars and 200 locations worldwide. See https://www.copart.com/. There’s even an auction site that works through other auction sites and specializes in “one of a kind art, antiques, and luxury goods.” See https://www.liveauctioneers.com/. If you’re willing to buy in bulk, that means at least a pallet or maybe a truckload of stuff, see https://bstock.com/all-auctions/. The last auction site I’m going to mention claims to be the nation’s leading online investment property marketplace. You can find them at www.Auction.com. If you don’t find an auction site that offers what you are looking for, search for “Auctions” in your browser. There are plenty more than the handful listed above.

UTILITIES

How can you cut your utilities bill? To me, that means 1. heat, 2. water, 3. electricity, 4. garbage, 5. cable, and 6. sewer.

Heat

1. HEAT: Obviously the answer is different for everyone. Some people turn their thermostat down during the day while they are at work. Others turn their thermostat down during the night while they sleep with an extra blanket over them (assuming a cold climate). And other people leave their thermostat down all the time. On the other hand, some people work from home and need heat while they work. Some people heat with natural gas. Some people use electricity. And other people use heating oil or propane. Furthermore, most landlords limit what you may do to an apartment to make it warmer or cooler and you need to run any ideas by your landlord before you get carried away. This makes it difficult to recommend any one course of action, however, one universal truth is that heat rises. So, if you live in an upstairs apartment in a northern (read cold) climate, you may benefit from the heat from a lower apartment during the winter. Also, if you live in an apartment complex with multiple side-by-side apartments, you can gain heat from the neighboring apartments. When I have a vacant apartment that is next to another apartment, I can generally turn the heat down to 50 degrees and have the neighboring apartments keep my bill to a minimum. If you are in an older building with leaky windows, a sheet of plastic can work wonders. Your landlord will have an opinion on how to attach the plastic. Draft stoppers under doors, behind light switches, and receptacle covers can help if there’s a draft coming in there. Weather stripping around doors and windows may also make a difference…caulking too. Carpets or throw rugs can help keep the floor warmer. If you live in a more southerly climate, where heating isn’t as important, and cooling is, you still need to do a better job of sealing your apartment to keep the heat out during the summer instead of keeping the cold out during the winter. Something else I’ve noticed after a tenant moves out is that frequently the windows are not closed and locked. Closing them and locking them can make a big difference in one’s heating bill. I know it sounds simple, but it’s amazing how often I find this phenomenon after someone moves out. Go ahead, see if your windows are closed and locked.

Water

2. WATER: In my experience, the biggest waste of water occurs when there’s something wrong with the toilet and it keeps running. This problem can easily double your water bill. Other leaks can also be devastating…even minor ones. And as strange as it sounds, I have had water pipes break for no apparent reason. A periodic check to make sure there aren’t any leaks can’t hurt. With the invention of PEX and shark bites, plumbing problems are so much easier and faster to repair. I’ve also had the water company replace water meters because they were faulty. Something else to consider is the use of water saving faucets and shower heads. That may be something your landlord would install or that he may let you install. You can ask. There’s also the remote possibility that if you don’t have a modern remote meter reader, there could be an error in reading the meter. Something you can do is read your own water meter regularly and compare your readings with those of the water company to make sure they are getting accurate readings.

Electricity

3. ELECTRICITY: Unless you are Amish, you’ll be using electricity to run your lights, many appliances, computers, air conditioners, and maybe even some electric baseboard heaters or heat exchangers. Your electric bill can add up to a substantial amount if you aren’t careful. If your heat is electric, see the section on Heat above.

Something you should be aware of is that most electric utilities companies give tenants the option of using their “budget plan.” In my area, the way that works is that the electric company calculates the average monthly usage for your apartment based on the prior year’s usage (which could vary widely from what you will use) and have you pay that average amount for a number of months until they can get a better idea of your usage. Then they may adjust your amount, but the idea is to average out your monthly bill so that you’re paying roughly the same amount every month rather than paying a higher amount in the winter and a nominal amount in the summer or a higher amount in the summer (because of more air conditioning) and a lower amount during the winter, depending on your climate.

Nowadays, there are more efficient light bulbs (LED) available from some electric companies and definitely from your local hardware store. They may be worth a little more in the short run to save some money in the long run.

One last thought about electricity usage is that you might turn all your appliances, lights, and anything else that draws electricity off and see whether your meter still registers some usage. Don’t forget about your refrigerator. And don’t forget to turn everything back on after you’ve verified that the meter is working properly and that no one else is tapped into your meter and using your electricity. If someone else is using your electricity, you should notify your landlord. If he/she doesn’t do anything about it, you might contact your electric supplier (utility company).

Garbage

4. GARBAGE: Many landlords supply dumpsters for their tenants. Other places require their tenants to get a garbage can and pay for their own garbage service. On the one hand, I’ve seen dumpsters regularly filled to over-flowing. (Some people don’t know how to cut boxes down.) On the other hand, I’ve seen municipalities require their residents to use a garbage collection service and have the collection company more than double their government-granted monopolistic collection rates. In other words, there are pros and cons for each scenario.

Sewer

6. SEWER: Sewer services are oft times supplied by municipalities or sewer authorities because of the large cost associated with building a sewer plant to purify the sewage. This means that the local government often is the entity that bills the customers. Furthermore, they generally bill the landlords and not the tenants. Your landlord may or may not have you reimburse them for the cost of the sewer bill. Your rental agreement will probably clarify how that is handled. I don’t know of any way to reduce your sewer bills, except to use less water.

RENTER’S INSURANCE

Some landlords require their tenants to purchase renters’ insurance. Some don’t. I didn’t, until I had a tenant who had a stove fire. The lady of the house started cooking something on the stove and went outside to talk with a neighbor. At some point, she noticed the smoke billowing out of the open door, ran inside, woke up her husband, grabbed the baby and went outside to call the fire company. Meanwhile, he grabbed a fire extinguisher and put out the fire. Shortly thereafter, the fire company showed up. They were concerned that there could be some embers in the ceiling above the stove and proceeded to chop a hole in the ceiling. Between the smoke damage throughout the apartment and the fire company’s handiwork, there was $13,000 worth of damage. The tenant did not have renter’s insurance. Consequently, the tenant ended up buying me a new stove, covering my $250 insurance policy deductible, and they were still on the hook for the $13,000 worth of damage to my insurance company (that covered the damage) when they moved out shortly thereafter. If they had had renter’s insurance, most of that would have been covered by their insurance company. Shortly thereafter, I mentioned to another tenant of mine what had happened and he went to his car insurance company and asked for renter’s insurance. Because he already had insurance with that company, they gave him a discount on his car insurance…that was enough to cover the cost of the renter’s insurance. Ever since then, I’ve required my tenants to obtain renter’s insurance. Not only does renter’s insurance cover the tenant’s property, but, under certain circumstances, it can also cover the landlord’s property, as well. Naturally, you need to talk with your insurance agent/broker to make sure you get the kind of coverage/deductible you want.

In my opinion, the potential problem with insurance companies is that some companies try to get out of paying for certain things. In other words, they fight you and your claim, while other companies pay without asking many questions. The difference could be how straight forward your claim is. If it’s a simple claim, they may pay promptly. If it’s more complicated, they may have objections or reservations about paying for everything up front. Unfortunately, I’m not an insurance expert, so you might want to ask around and see what experiences your friends, etc. have had with their insurance companies before you decide where to buy your insurance. In any event, it would be a good idea to take pictures of your apartment after you’ve moved in. That way, if there is a loss, it will be a lot easier to prove to the insurance company what you lost.

PLANT A GARDEN/GROW YOUR OWN FOOD

If you think you’re going to plant a garden next Spring to cut your food bill and you’ve never planted a garden before, you need to start sooner rather than later…with planning. That means you need to think about what you’re going to plant (will it grow in your climate), when to plant your plants (depending on weather), where you’re going to plant your plants (will they get adequate sunshine), do you need to improve your soil (with compost or a cover crop), and where is your water coming from (well, river, rain, or a municipal source), to name a few things to consider.

While planting a garden can seem overwhelming, you don’t have to start out with a large garden. You can start with a plant or two to see what it takes. If you don’t know how to start, there are plenty of YouTube videos that can help you get started. Here’s gardener Scott to tell you what I just told you:https://www.youtube.com/watch?v=02ABs-4znQ0.

In small town USA, many houses have a yard where you can grow a garden. Okay, so you don’t know anything about growing a garden. Once again, there are lots of people offering how-to videos or text material on YouTube to show you how to plant a garden. Here are three samples:https://www.youtube.com/watch?v=KLtsTuc2Tuk, https://www.almanac.com/vegetable-gardening-for-beginners, https://www.youtube.com/watch?v=6MwLumQEFeo.

If you don’t have room for a garden, there are still some possibilities.

I heard of a lady who wanted a garden, but didn’t own any land. She went to her neighbors and made a deal with them. She would plant a garden on their land and give them half of what she grew if she could have the other half of what she grew. In other words, she traded her labor and know-how for the use of someone else’s land. After while, she had people coming to her asking her to use their land.

Garden starter kits are also available. Many of them are suitable for indoors. See https://www.etsy.com/market/garden_starter_kit and/or https://www.gardengatemagazine.com/review/garden-starter-kit/.

Hydroponics—the use of water to feed plants the nutrients they need to grow, without the use of soil. Hydroponics can be used on a small scale, or on a large scale. There are even kits available for home use. For a list of 50 possible set ups, see https://www.amazon.com/Best-Sellers-Hydroponic-Growing-Kits-Systems/zgbs/lawn-garden/23539046011.

Cost of Commuting vs. Rent

With the advent of the COVID scare, many people tried to distance themselves from the larger cities. This worked if you could work from home, but what if you had to commute a greater distance to and from work? Then you had to calculate the added cost of going the additional miles. Ok, so the rents are generally lower the further away from the cities you move, however, there’s obviously a trade-off there…in both time and money. And then there’s the added risk of being on the road more.

If I have to drive an extra 40 miles per day by moving out of the city and my vehicle gets 20 miles per gallon, I’ll have to pay an additional $35 per week (or $140 per month), assuming gas costs $3.50/gallon. So, the question becomes, will I save $140 per month in rent by moving 20 miles further out of the city? That depends on the city and the cost of rent and gas over the period of time that we’re talking about.

Addictions

Addictions can be costly and even ruin your life. I had one tenant who became addicted to drugs and stopped paying her rent. Fortunately for me, she moved out of her own accord, and her mother (who had co-signed the rental agreement) covered the rent. For more information about overcoming an addiction, see HelpGuide: Addictions.

Bankruptcy

Bankruptcy is a very complicated area of the law, and if you are contemplating filing for bankruptcy, you would be well advised to seek the counsel of an attorney who specializes in bankruptcy law. How does one find a bankruptcy attorney, you ask? See Debt.org: Find a Bankruptcy Attorney for some ideas.

Bankruptcy matters are generally brought before a U.S. bankruptcy court, which is a unit within a U.S. district court. There are 94 federal districts in the United States. According to the U.S. bankruptcy court, bankruptcy helps people who can no longer pay their debts get a fresh start by liquidating assets to pay their debts or by creating a repayment plan. To see what else the bankruptcy court has to say about bankruptcy, visit U.S. Bankruptcy Court.