Saving On The Major Things

[ericmedem]

While I see many of the people in this forum are great at finding ways to be frugal, do most of you also do your best to save on the large expenses which are often overlooked. Things such as shopping insurance companies, shopping for mortgage rates, looking for the highest returns on money that may be in your savings accounts, blanketing your hot water heater, insulating your attic, etc.

Eric Medemar

[LuxLiving]

Surely, we try to.

Why do so many people compartmentalize their money? They think twice about overspending on clothing but don't bother to check around for price comparisons when buying cars or refrigerators???

[Ima saver]

I am always on the outlook for places to make more interest on my money. I just talked to the president of a local bank and asked why his bank does not offer higher C.D. rates. He then offered me a higher rate if I would deal directly with him.
I saved $1700 on my car by using the GM points I had accumulated. I also saved on the sales tax by buyin that car in a different state. (I happened to own a house and land in that state at the time.)

[tinapbeana]

i love the car insurance one, b/c anytime i 'shop around' i realize i'm getting a better price than is available anywhere else for me (about 40% lower). add to that my recent multiline discount for having homeowner's with the same company, and i'm pleased as punch.

[Aleta]

This was a large point highlighted in All Your Worth by Elizabeth Warren. In the beginning, she said that she wanted the readers to save the big money, not the small money. By small money, she meant that most people think that by couponing and savings rolled up pennies can save us big bucks. Although she was not against that, she wanted people to comparison shop with insurance of all types that could include taking off unnecessary coverage. Any large outlay done on a regular basis can take the majority of your money.

I am one who coupons and rolls coins, but I also see the importance of saving in other areas as well. Of course, it depends on where you live. If you live in or about the gulf or East Atlantic coasts, you'll find your homeowners insurance to be one of your largest bills. One of the reasons we could not get down to her 50%must-haves, 30% wants, and 20%savings was because of our property insurance and health insurance (private - husband is self-employed).

[Joan.of.the.Arch]

Yes, of course, we are always on the lookout to save on the major expenses. There are endless ways to save on the endless small things, so we probably end up chatting about those more.

[disneysteve]

Great topic. Somedays, I get so tired of hearing about the "latte factor" or clipping coupons. Yes, those things can save you money, but when the woman in front of me at the grocery store is using coupons she pulls out of her $300 handbag and then loads her groceries into a $60,000 SUV (that is probably leased), you've got to wonder if she isn't missing the point.

We try and look at the big things and the small things, because all of it adds up over time. The little things matter because they tend to be things you do frequently so little savings can multiply. The big things matter because even though you might not do them often, the large savings can be significant.

I was actually just thinking about shopping our auto insurance rates as I haven't done it lately. I also need to make an appointment with our life insurance agent as I know rates have dropped and I think I'm carrying more coverage than I need. And just recently, I moved more cash form a low yield account to my high yield MMF.

Thanks for the reminder.

[LivingAlmostLarge]

The easiest big things that cause hardship are cars and homes. You over buy on either and clipping coupons, picking up change is not going to solve the issue.

[disneysteve]

Originally Posted by LivingAlmostLarge

The easiest big things that cause hardship are cars and homes. You over buy on either and clipping coupons, picking up change is not going to solve the issue.

Very true. There is a good article on the housing situation in Money this month. One thing they mention is that the median home size has increased 16% in the past decade. Not only does that mean more expensive homes, it also means higher operating costs - heating and cooling, taxes, insurance, furnishings, etc.

[MonkeyMama]

Agreed. We don't compartmentalize our expenses, but obviously it is far easier to save on bigger things/reap bigger rewards. For smaller things, the cost and benefit of spending a lot of time to save a few dollars comes into play. As such, a lot of the smaller things we don't bother with. Though there are many small things that don't take a lot of time and effort that I will do to save a few bucks. But the bigger items are the reason we have been able to save so much money. Simply by buying used cars and paying cash I figure we save on average a few thousand a year.

[Aleta]

How does the saying go? PENNY WISE AND POUND FOOLISH. This is the mentality of most. I couldn't have said it better Disney Steve.

[baking23]

Originally Posted by ericmedem

While I see many of the people in this forum are great at finding ways to be frugal, do most of you also do your best to save on the large expenses which are often overlooked.

I'm an environmentalist as well as a frugalite so I try to conserve money and products. I just had to buy new tires for my car and I went for the best simply because they came with a great warranty and lots of free service, tune ups, etc... My car was bought used from a family in the area and had been made local and was good for the environment.

I also have a friend of the family that works at AAA and after I'd compared other insurances I went with AA because I got a ton of discounts and all the benefits of full-membership.

[LivingAlmostLarge]

More importantly how many people live paycheck to paycheck never bothering to save? Thwn one incident will allow the house of cards to fall. And cause them to go into a spiral of death.

[Fern]

I thought this was a great question.

I don't think people should get too preoccupied with saving a nickel here or there. You'll get a much greater bang for the buck by focusing FIRST on larger savings like one's mortgage, car insurance, and other big purchases rather than spending so much time on the coupons or finding a nickel here or there.

It's kind of like not seeing the forest for the trees.

[cschin4]

In some ways it is easier to debate with yourself over the "little things". It is much easier to pass up the latte than it is to shop around for auto insurance and so forth. And, for alot of the big things, I think many of us (myself included) tend to just let things ride that we already have.

[PrincessPerky]

Well how many big things can you list?

insurance shopping only needs done say yearly?
interest shopping again not a daily thing

big purchase like house/car done rarely (even by average Americans, two years isn't it?)

medium purchase like vacation TV computer, etc...again done on average I guess yearly

so if we only talk about them we would be a very slow boring board....

Though I do agree some spend way to much time on the pennies and not enough on the pounds.

Then again some people spend time on the pounds and let the pennies wast grow up to that pound and more (I have a friend this way)

[disneysteve]

Originally Posted by PrincessPerky

medium purchase like vacation TV computer, etc...again done on average I guess yearly

so if we only talk about them we would be a very slow boring board....

Of course, the average American spends far more time and does more research to plan their vacation than they do to plan their retirement.

I don't think the OP was suggesting we should stop talking about the little things. Just that we shouldn't forget where the big money is.

[story3girl]

I think sometimes the reason why frugalites are always talking about how to save an extra penny or two is because you get to a point where there aren't big things left to save on. When people talk about how the big savings count more, and you're already driving a ten year old paid for car and living in a cheap apartment, those things are not the places you need to look at.

The people who post on this board are the people who are already doing some things right and looking for more things to do right. Some of the little things may not be worth the time and energy just for the money, but often they're worth it for the inertia and the sense that you are at least still making some improvements.

[LivingAlmostLarge]

There are a lot more people who have bought too expensive a car, too much house and think clipping coupons, cutting cable, etc will solve their problems. Thus why Dave Ramsey makes so much money.

Doesn't happen. Truth is that a lot of times they need to get out of a $500-700/month car payment because they won't give up their homes or something. That's what caused debt, buying too much stuff. Then too the $500-1k in CC minimums every month.

But clipping $1 here and $1 there, or rolling change or $50/month cable, how do you get around being in the red if you have a car payment? There is no easy answer over just dumping the car payment and wham in one step you are back in the black.

[disneysteve]

Originally Posted by LivingAlmostLarge

There are a lot more people who have bought too expensive a car, too much house and think clipping coupons, cutting cable, etc will solve their problems.

Truth is that a lot of times they need to get out of a $500-700/month car payment because they won't give up their homes or something.

There is no easy answer over just dumping the car payment and wham in one step you are back in the black.

The problem with this is the person is usually upside down on the car loan. If you owe $25,000 but the car is only worth $20,000, you're stuck if you can't come up with that other $5,000 to pay off the loan.