How to Save Money Without Deprivation

PHOTO: Just about everyone can save at least a few hundred a month and have more fun with these simple tips. Getty Images
Just about everyone can save at least a few hundred a month and have more fun with these simple tips.

Among your various New Year’s resolutions, there’s doubtless one focusing on doing better financially. Given the same income, we can all achieve this, quite simply, by spending less.

In this consumer nation, many of us associate spending less with deprivation, but that doesn’t have to be the case. Chances are there are ways that you can cut back on unnecessary expenses for things that really aren’t bringing you much happiness. And some ways of saving result in experiences that are more enjoyable.

As some of these may be recurring expenses, the savings can add up to significant figures — for many, several hundred dollars per month. This is money you could be saving and investing for your kids’ education or for your retirement.

Here are some ways to save money in 2015 and beyond:

  • Host a bake party. Many people go out to eat to be with friends and end up spending a lot of money only to have to yell across the table to hear each other talk. One way to spend better quality time with your friends and save money is to host a bake party where everyone brings a favorite recipe or two and spends the evening cooking meals together. Most recipes can be doubled for very little expense, and you end up with an evening of fellowship and fun. Don’t forget plenty of freezer bags, as the best part of this party is enjoying custom-made frozen dinners in the weeks to come.
  • Take your lunch to work. Even if you try to eat fast food, many people find that they will spend $50 a week – which quickly adds up to $200 per month. You can eat better and more nutritiously by brown-bagging it -- not to mention the extra couple of thousand in your savings account every year. What you lose in convenience you gain in better nutrition.
  • Start a fitness club with your friends. And cancel your gym membership — especially if you aren’t using it. Many people may spend as much as $80 or $100 a month for gyms they never use. If you want to work out for far less, consider getting some inexpensive home workout equipment and working out with friends at home. I’ve had many clients that say they like to go to the gym because their friends there hold them accountable. By starting your own club, you would still accomplish this while potentially saving hundreds of dollars each year. Set an exercise schedule and routine, using videos from online or your public library to guide you. Most people confirm that having a set time that they know their friends are getting together to exercise holds them more accountable for a good workout than going to the gym– and they have far more fun while saving money.
  • Create your own family time-share. Vacations can be one of the biggest “black holes” in people’s budget – and, one that many times isn’t planned out and therefore ends up on the credit card. Many people realize that hotels and meals make up the largest percentage of their vacation budget, so they began to look for alternatives – and the time share salespeople know this.

While there is nothing wrong with going the time share route, it is a big decision that should be carefully researched. Many of my clients have been able to buy a used time share for significant savings off the retail price. However, they still have to pay yearly maintenance fees, property taxes and usually only get one or two weeks each year at the property. That may be fine during your working years, but what about after you retire?

I had a client whose father and five siblings inherited a beat-up old trailer on a beautiful lot overlooking a lake within a couple of hours drive from where they lived. This family loved the ocean, but after thinking it over, they decided that lake vacations could be about as good – and a lot cheaper. After conferring, the siblings decided to go in together to remove the trailer and build a vacation home that each of them could use for two months per year. They were able to pay for this gradually, using the same amount of money that they had previously spent collectively on their one-week vacations.

By purchasing a vacation home or condo with family members, you could get more time there, have a lot more flexibility, reduce common charges and obtain a piece of a paid vacation home. Of course, doing this successfully takes a close family that can work out the details without a lot of stress and requires a good attorney to get everything in writing so there are no misunderstandings.

  • Raise your car insurance deductible. Low deductibles are quite costly. Many people are afraid to carry a high deductible, but what they don’t realize is that this is a certain expense, while paying for more of the costs of an accident is a risk rather than a certainty. If you don’t self-insure for some of this risk, you’ll pay a fortune over time for a low deductible. If your driving record is even just average, you’ll come out way ahead. All it takes to raise your deductible is to have a reserve fund for that amount or, as a last resort, a credit card with that much room on it for this emergency use.
  • Consider dropping your auto collision coverage. In states where the cost of car insurance is high, people with older cars with no loans can save several hundred bucks a year by dropping their collision coverage. This means they self-insure for the prospect of damage to their car from accidents that are their fault. If you have a car loan, the lender requires this coverage. But if the loan is paid off, the car is worth only $5,000 and you have enough money in the bank to buy another one, why pay several hundred dollars a year for collision coverage on this asset, which is declining every year in value? If your road safety record is just average, there are substantial savings here. (If you have a lot of accidents, you’ll pay high premiums for collision or high costs for repairs.)
  • Changing your disability deductible. On disability insurance policies, you can lower your premiums by as much as 40 percent by going from a 90-day deductible to a 180-day deductible. So, if you have enough money saved to pay six months’ living expenses, you can self-insure for 180 days instead of 90 and save hundreds each year.

Some of these ways to save may not be your cup of tea, but by engaging this same mindset, you can probably come up with ways that are more suitable for you and your situation. The idea is to save substantially without deprivation and, in some cases, with greater enjoyment.

Of course, saving on one thing does your financial picture no good if you spend the savings on something else. So it’s a good idea to squirrel away these savings in accounts that you can’t easily access. By putting the money in tax-deferred retirement accounts, such as your 401(k) plan at work, or an Individual Retirement Account, or a college account for your kids, you can turn a few hundred dollars a month into something lasting, important and real.

This column is the opinion of the author and in no way reflects the opinion of ABC News.

Byron L. Studdard, a CERTIFIED FINANCIAL PLANNER™ practitioner, is founder and president of Studdard Financial, LLC, a fee-only financial advisory firm in Sarasota, Fla., dedicated to helping clients build wealth, protect it and pass it on to future generations. Studdard has been listed in the Guide to America's Best Financial Planners (published by the Consumers' Research Council of America, an independent research organization). He can be reached at Byron@studdardfinancial.com. If you have a question for him, send him an email and he will try to answer it in an upcoming column.