Fix Those "Fixed" Expenses

Chin up! You can lower your fixed
expenses. You're not doomed to
poverty forever!


When I read articles in the newspaper about "how hard it is to make ends meet these days", there is always some mention of fixed expenses, as in, "After fixed expenses, this poor unfortunate soul only has $100 left to spend each month." Rarely is it mentioned that "fixed" expenses are not always fixed.

Say you have house insurance for $400. Have you called around to several agents recently? Have you considered a higher deductible? Have you grilled the agents on all available discounts? If not, the $400 is not really a fixed expense. The same thing goes for auto insurance and health insurance. Keep in mind, the purpose of insurance is to guard you from financial ruin, not to cover every eventuality. If you have an emergency fund, you can cut down on your insurance.

Another example: You struggle to pay $800 per month for a house payment or rent. Were a small mishap such as a major car repair to arise, you couldn't pay the house payment without charging the car repair. A smaller house, a cheaper area, or a fixer-upper--even renting an extra bedroom, your basement, or garage--could relieve financial pressure.

Utilities, usually seen as a fixed expense, aren't  really "fixed" Turn off lights religiously. Take fewer showers (not to the point of stinking, please). Turn the heat down, maybe way down, even wearing a hat and layering clothes inside. Invest in insulation. Wash clothes in cold water and line dry. Cancel pay television and Netflix. Get bare-bones phone service; consider axing the mobile phone or landline.

Property taxes hurt. Consider a cheaper house or an area with lower property taxes when you're looking to buy. If you already own the house, look at your tax assessment to see if it is fair. Compare it to what other houses in your neighborhood have sold for, not including foreclosures. We successfully contested our taxable value three years in a row, resulting in a savings of about $300 a year. This will save us money for the rest of the time we live here, which could be our whole lives. This is not pocket change.

Form 8880 saves us hundreds
of dollars each year.
For income taxes, study the available tax credits and tax deductions. An especially lucrative one is the Savers Credit (Retirement Savings Contribution credit) (IRS form 8880). You can get an absolutely huge tax credit for putting money away for retirement if you meet the criteria.

I'm sure there are more "fixed" expenses I haven't mentioned. The main idea is to approach all expenses as flexible, and to apply creativity to all of them. You may decide you are absolutely not willing to cut back on certain things. That's a personal decision. But if you at least approach every expense as one where you could potentially save money, you may find that the fixed expenses aren't as fixed as they seem.

Most people offered a money-saving idea immediately think of why it won't work for them. A simple attitude change from It won't work for me because... to I will make it work by... changes poverty to plenty.
 
What fixed expenses have you lowered? How did you do it? 

Open Your Mind, Let the Dollars Fall In

    A while back someone disparaged Discount Foods Warehouse, my favorite food salvage store until it closed down. I concede that the place was dirty, but I loved to shop there. Discount Foods Warehouse was exhibit A, that, while doing any bargain hunting, it is important to overlook some unappealing aspects of a given venue in order to find hidden gems.
     At some estate sales, the house might smell stale, but that doesn't mean there aren't some great buys on tools, even if you wouldn't choose your next set of bed sheets from the musty basement. At Discount Foods, I had absolutely no qualms about going to find what was good. There might be a water-damaged bag of flour (no, thanks), canned food with icky labels (not so bad, since these can be washed), and other things in unopened cases. When I look for deals, I try not to look at the big picture, but look at items on an individual basis. I would ask myself, "Is this bag of split peas usable, or is it unsafe? Is this cheese moldy, or is it good? Is this lemon juice too expired?", not "Is the ambiance nice? Are the shelves organized? Are the surroundings clean?"
     When we go to garage sales or thrift stores, we try to find the treasures amidst the junk. It is in junky-looking thrift stores and garage sales that I often find the best items, at the most reasonable prices; conversely, at the so-called "upscale" thrift stores, the prices tend to be more than I'm willing to pay and I walk out empty-handed.
     At a food salvage store, armed with the same attitude, I find some write-home-about-it bargains, including Camembert cheese for $1.00/lb. Camembert is pricey stuff, and we would never have purchased it from a normal store, but I got it for far less than even the cheapest processed cheese at Aldi. I find that, because I can spot the good among the bad, I find great things in unexpected places, even Dumpsters and trash piles. Maybe those "shopping" venues aren't for everyone, but it means better availability for those of us with an open mind and a soapy rag.
     If you find yourself put off by anything other than typical shopping destinations, just remember that if you open your mind, the dollars will fall in. An item doesn't need to be presented in a lovely showcase for it to be just what you need.