Not Every Household Expense is A Necessary Expense:
Here’s Some You Should Ditch
1. Contractor House Calls
Think you need a pro to fix that leaky toilet? You’d be surprised how easy it can be to fix it yourself — and save the typical $45 to $150 per hour plumbers can charge (and don’t forget the boost in your can-do attitude!). You can often find home remedies for small jobs like a leaky faucet or broken garbage disposal on YouTube. Just be sure it’s a reputable source. And check out several videos on the same repair. That’ll help make sure no crucial step is missed.
“We save a couple hundred dollars per year by doing small home repairs ourselves,” says Lauren Greutman, frugal living expert and author of “The Recovering Spender: How to Live a Happy, Fulfilled, Debt-Free Life.” For those who prefer an expert, Greutman suggests smaller, local retail appliance stores. “It’s a little-known secret that they usually have repair men that are very inexpensive,” she says.
2. Extended Warranties
It’s tempting to insure your new, big purchase, but according to Consumer Reports, you’re probably already as covered as you need to be.
How’s that? Most major appliances come with at least a 90-day manufacturer’s warranty. Buy with a major credit card (Visa, Mastercard, Discover, or American Express) and it will likely double that standard warranty.
Combine that with the fact that “Consumer Reports” found most products won’t break during the standard two- or three-year service contract period. When they do, the repair cost is usually just a few dollars more than the cost of the warranty. Instead of paying for an extended warranty, stash the cash in a savings account earmarked for home repairs. When you need it, it’ll be there.
3. Flashy Feature Appliances
The newest appliances come with super fun features. Who wouldn’t want an oven that talks, remote access to your A/C, or bottle jets in the dishwasher (paging new parents!)? Still, it may not be financially wise to replace a fully functioning older model just to gain modern perks. Circuit boards break, and energy efficiency numbers don’t always add up.
4. Budget Bulbs
Incandescents may be easy on your everyday household budget, but they’re tough on your energy bill. Start replacing them now with LEDs. To help swallow the initial costs, just replace them as they die out. A typical LED bulb can recuperate its cost in a little over a year (at least according to manufacturers, so in reality it’s probably a bit longer, but not enough to quibble about). Even better, since LEDs can last a decade or more, you won’t have to buy bulbs as often, and your energy costs will be lower!
5. Commercial Cleaning Supplies
Even if you’re buying off-brand products to save costs, you’re still wasting money. You don’t have to spend anywhere near the cost of commercial products. Vinegar will clean a lot of things and is very inexpensive. Baking soda and hydrogen peroxide can also be used for a number of household cleaning uses. For more details, check out this post from HGTV with easy, inexpensive recipes for homemade cleaning supplies.
6. A Storage Unit
If it doesn’t fit in your home, is it really worth keeping? Ditch nostalgia and think with your bank account: At a cost of between $50 and $300 per month for a storage unit, it may be time to purge the junk.
If you can’t bear to part with something you don’t use regularly — say, great-grandma’s heirloom china — rethink your home’s organizational storage. Clean out the closet, craft shelves beneath the stairs, or build window seats with drawer storage. You’ll be investing in your home instead of giving money to a storage vendor.
7. Private Mortgage Insurance (PMI)
Bought your house with less than 20% down? You’re probably paying for PMI (a type of insurance that guarantees your mortgage lender will be covered if you default). It costs hundreds or thousands of dollars per year if you have it. But once your loan-to-value ratio drops to 80%, you’re not required to pay it. But the lender isn’t required to drop it until it reaches 78%.
That 2% difference could cost you hundreds, even thousands of dollars, depending on your home’s mortgage balance. So, keep an eye on your statement and whip out that calculator when you’re getting close. Then, if you’re feeling really savvy, keep paying that amount every month — but apply it to your mortgage principal instead. Do that, and you could recoup your PMI fees. Because as you pay down your principal, you’ll pay less in interest, potentially saving thousands. Now how savvy is that?
Also, keep in mind that as the value of your home goes up, it impacts your loan-to-value ratio. If you’re paying PMI and you’d like an updated valuation, fill out the contact form below and we’be be happy to provide that.
Source: California Association of Realtors