Wednesday, April 11, 2012

I Saved $ Last Month By Spending $



Once you get out of debt, pay off your mortgage and have a pile of emergency fund cash laying around getting fat(well, as fat as it can get on the pitiful interest rates nowadays), you can 'save' even more money by paying ahead.

This is one of my frugal "secrets".
Any time some business offers a discount for paying your bill in advance or in full, rather than making payments, or if they offer a discount if you pay in cash rather than put it on a credit card, I will take them up on these offers.

When my 2 kids who needed orthodontia work began to see the orthodontist, I paid for the yearsss long treatment in full, in advance.  I saved 5% on the total cost of the treatments by writing a check for the cost when the treatment began.

There are certain bills we have come due each year.....local taxes, school taxes, sewage bill.  I pay each of these in full for the year when due and/or during the 'discount period' they offer.  This period is when you pay before it's due and you get a discount of between 5% and 3%.
I figure on the amount of money involved saving that 3% or 5% is better than hanging onto the money that would otherwise sit and earn a paltry .06% over the course of a year in a financial instrument.

By paying the sewage and the local taxes last month in full, ahead of their due dates, I saved $500 of my cash in 2012. Yes, I spent more in March than I wanted to and things were tighter but by writing those checks ahead, I saved $500 for the year.
That's $500 more that I get to keep or spend on "wants" or use to pay something else in advance for a discount this year.

Cool, right? ;-)

Sluggy

6 comments:

  1. Brilliant! Now to get that point...

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  2. McVal--lol How is that debt reduction going anyway? Is that train still on the tracks or did the Leon express knock it back into the engine shed? 8-)

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  3. Yes - it's like being a commodities investor and getting the "spot price." Good job! Also, you don't have to worry about various bills once they are paid.

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  4. 444--Exactly! And you gain more head room for stressing out over other crap.lol

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  5. I do that but I've NEVER come across deals as good as the ones you're getting!! I've saved $40 on a bill of about $1800 by paying it in one lump sum early. Big deal (I'm whining!)

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  6. I try to do this when I have the cash and when someone offers me a deal-doesn't happen much around here.

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