Expenses, Expenses, Expenses
Groceries; clothing; electric, water, phone, and cable bills; tolls; and gas for the car. Daily expenses add up alarmingly fast and seem to increase continuously. And, if you're like many people, you're not even sure where your money goes.
Walk around with $100 in your pocket sometime, and try to account for where you spent it when it's gone. Chances are you'll be amazed at how fast the money disappeared, and not all that sure about how you actually spent it. If you're trying to control or cut back on daily expenses, however, it's imperative you know exactly where your money is going.
The topic of budgets is covered in Do You Need a Budget?, so we won't go into too much detail here. Know that in order to control expenses, however, you first must set financial goals. Once you've done that, you can determine how much money you have to spend, and then decide where you'll make cuts, if necessary.
Some expenses are unavoidable. You've got to pay your mortgage, meet your car payment if you have one and take care of household expenses such as water and electricity. Keep the following tips in mind, however, for saving dollars on everyday expenses.
Limit your visits to restaurants. Even the cost of dinner at the local diner adds up if you eat there four nights a week. You really can eat at home for much less than you'll pay in a restaurant.
Purchase prepared meals at the grocery store rather than eating in a restaurant. You still won't have to cook, but the meal will cost less than in a restaurant.
Use gas cards that give you a discount or a rebate. An Exxon-Mobil card gives you a 3 percent rebate on all gas at Exxon or Mobil stations. The Shell MasterCard takes 5 percent off your gas purchase.
Don't use a higher-grade gasoline than your car requires. Check your owner's manual to verify the lowest grade of octane your car can handle.
Drop or reduce the comprehensive and collision coverage on an older car. Some insurance experts suggest scaling back as soon as the premiums climb higher than 10 percent of the car's market value.
Shop around for your homeowner's, auto, and liability insurance. The cost of identical policies vary from company to company. Also, raising the deductible on your policies can result in significant savings over time.
Cut back on cable. How often do you really watch the golf channel? Or TV at all, for that matter? Cable bills are expensive, so if you're not using all that you're paying for, consider scaling back.
Compare alternative utility providers. Consumers in some states are free to choose their own suppliers, and prices vary. Check out www.lowermybills.com to assess your current electric and gas bills and find out if there's a better deal.
Comparison shop your phone bills. You can do this at www.ABTolls.com, an alternative rate-comparison site that compares long distance by factoring in all those fees and basic charges to calculate your true rate per minute.
- Get rid of telephone extras such as caller ID. Depending on your rates, you may be able to save at least $10 a month by eliminating services such as caller ID and call waiting.
Install a programmable thermostat, and go on a budget and/or prepayment plan to lower your monthly heating bills.
Call your long-distance phone carrier and comparison-shop. Ask a representative to review your current usage and tell you if there's a better plan available for your needs.
Use frequent buyer cards if you shop at the same stores all the time. These cards offer discounts after you spend a specified amount of money.
Bargain shop for major purchases. No one likes going to six stores to comparison shop for a refrigerator, but your savings could be significant.
These are just a few suggestions for saving money on everyday expenses. Just remember that every penny you save can be put aside for more significant costs, such as college, weddings, and retirement.
And Then There's Your Ex
Divorce can be devastating to your financial situation, there's no question about it. (Read Changes in Your Marital Status on the financial implications of divorce.) Know, however, that there are ways to make divorce less financially detrimental for both parties. The catch is that you've both got to be willing to cooperate to make it happen.
If you've had an ugly divorce, it might be difficult to work with your ex on anything—including your financial situation. If you keep in mind, though, that you may benefit from cooperating, you'll probably find it easier to do so.
We probably can think of divorce situations that ended in financial hardship for one or both partners. The husband and wife may have fought bitterly throughout the process, hiring lawyers, private investigators, and other professionals without any regard to the cost. Or, perhaps they couldn't agree on any financial, custody, or property matter, dragging out the proceedings and running up huge bills in the process.
Divorce proceedings can occur in an orderly manner, and much of the need for professionals can be eliminated if both partners are willing to cooperate. If you're in a divorce situation, it's important to understand that the cost of legal proceedings can chew up a big chunk of your financial assets.
And once divorced, you could end up paying alimony and child support that will further impact upon your financial situation. Divorce often is inevitable, and we'd never urge you to stay in a bad marriage for the sake of your finances. Resolving to settle a divorce as amicably and cleanly as possible, however, can impact positively on your net worth—and that of your ex.
Once you've determined all your assets, along with your liabilities, you can start getting a handle on your net worth. Your net worth is the indicator of your overall financial situation.
Excerpted from The Complete Idiot's Guide to Personal Finance in Your 40s and 50s © 2002 by Sarah Young Fisher and Susan Shelly. All rights reserved including the right of reproduction in whole or in part in any form. Used by arrangement with Alpha Books, a member of Penguin Group (USA) Inc.
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