Long Term Financial Goals
The Coronavirus has taken so much. We can’t see loved ones, events and gatherings have be cancelled, millions of lost jobs and 210,000 lives taken too soon. We couldn’t plan for the devastation 2020 brought. However, we can plan how to use 2021 to our advantage.
Coronavirus has has given us an opportunity: the gift of time. We have few guarantees about what 2021 will bring, but we know with 100% certainty that we will have significant amounts of time. As we look toward another year of social distance, I want to issue a challenge.
How Will You Use 2021 To Put Your Long Term Financial Goals In Motion?
Often, we use time and money as excuses for inaction. Have you ever said, “I can’t do xxx because I don’t have enough time” or “I can’t do xxx because I don’t have enough money?” Me too. Well, guess what friends? You’ve got time. Use next year to focus on saving money. Build up your bank account so you have money to put your long term financial goals in motion. Learning new habits takes time and dedication. Shift your focus toward implementing money saving strategies. So that by the time we can resume our “normal lives,” you’re already a lean, mean money saving machine. With that, let’s go through your budget, section by section, and find ways to save.
Housing
As I’ve said before, housing is likely your most expensive bill. The easiest way to cut that bill and your utilities in half is by getting a roommate. If you live in a one bedroom apartment, consider letting a friend sleep on an air mattress in the living room for $300 per month. Even if you can only stand the arrangement for three months, you’ll have saved $900! Moving in with your parents may not be an exciting idea, but it will also cut your costs. Are you a homeowner who bought more house than you can afford? Think about downsizing. Finally, all homeowners should refinance their mortgage! With rates at a historic low, you’re crazy not to. Unfortunately, this isn’t an option if you’re unemployed. Trust me, I tried and banks won’t return my calls. Yeah, it sucks.
Utilities
Last week, I wrote an entire post dedicated to lowering your utility bills. I use all of the tips I recommended and this is what my energy consumption looks like! Am I bragging? Absolutely. I use half the amount of energy as an “efficient” home! So, quit dragging your feet, use my tips and start saving!
Insurance
Use the extra time to price shop for better insurance rates. Whether you need homeowners, renters, car, life or umbrella insurance, companies compete with each other to earn your business. Use that to your advantage! You can price shop online or use an insurance broker. Download all of your policies to make sure you’re getting an apples to apples comparison. Currently, State Farm is my insurance carrier because they offer me the best rates. I get additional savings on my car insurance because I have a transponder in my vehicle that tracks my driving. I get an additional discount for driving safely. It’s usually a savings of $100 per year.
Transportation
Cars are a money pit, but a necessary expense in most places. My best advice is to buy a reliable, used vehicle and stay on top of regular maintenance. If you made the mistake of buying a car you can’t afford, cut your losses and trade it in for a used vehicle with a lower monthly payment. Put off buying a “new” car as long as possible. No one is driving as much as we did pre-covid. Don’t invest your hard earned money in a car that will sit in the driveway, take up space and lose value.
Food
A few weeks ago, I wrote a post dedicated to saving money at the grocery store. I shared a tip that changed the way I eat and saves me so much anxiety: meal planning. I cook for the whole week on Sunday, by making one recipe for lunch and one for dinner. Then, meals are covered for the week, there’s ZERO need to eat out and I don’t have to stress about what to eat for dinner. Commit to meal planning for one month and see how it goes. Eliminate your restaurant budget or coffee budget for one month and add the savings to your financial goals fund.
Prescriptions
Recently, I found one of the best kept secrets on the internet: Honeybee Health 🐝. Honeybee is an online pharmacy based in California that cuts big pharma and insurance companies out of prescription drug transactions and passes the savings to their customers. Truth be told, I was a bit skeptical the first time I used their services. But I was pleasantly surprised by how easy it was to transfer my prescriptions. There was an issue filling one of my orders and I received excellent customer service via email to quickly fix the issue.
The chart below shows the cost of filling a 90 day supply of the same three prescriptions using two different online pharmacies vs my local Walgreens. The purchase using insurance is $100 MORE than the same purchase from Honeybee! I know it seems too good to be true, but in this case, it’s not. Honeybee Health is the least expensive way to buy prescription drugs. With minimal effort, Honeybee will save me $400 on my prescription drug costs next year! 💲
| Walgreens | Optum RX | Honeybee Health 🐝 |
|---|---|---|
| $133.23 (purchased WITH insurance) | $143.01 (purchased WITH Insurance) | $47 (purchased WITHOUT Insurance) |
Toiletries
Buying toiletries at the grocery or drug store, while convenient, is the most expensive place to buy personal care products. Below is a breakdown of where I buy my toiletries based on the best price and value. I buy my shampoo and styling products online because I treat myself to nicer products formulated for curly hair. Prior to making this change, I bought them at Big Lots. Big Lots is a buyout, discount store that carries a little bit of everything. Similar buyout stores I love are Ollie’s Bargain Basement and Gabriel Brothers. If you don’t have these stores where you live, do a Google search and see if you have something comparable.
| Store | Product |
|---|---|
| Dollar Tree | Q-tips, cotton pads, toothpaste, ponytail holders |
| Big Lots | Conditioner, panty liners, loofah, nail polish, razors, hair clips |
| Costco | Tampons, Dove Soap, Cetaphil lotion, deodorant |
| Internet | Curly hair shampoo, styling products, generic replacement toothbrush heads, makeup |
Fitness
Are you paying for a gym membership you’re not using? Cancel it! And put that money toward your long term financial goals instead. Use the beautiful fall weather to walk, run, bike, skate, pogo outside. There are plenty of free online exercise videos you can take advantage of during rainy days and the colder months.
Clothing
Since we’ll be social distancing for most (if not all) of 2021, there is little need for new clothes and shoes. So use the extra time to clean out your closet. Everything that you haven’t worn in two years (I’m giving you a Covid buffer) goes to charity. If you have clothes, shoes or accessories that you no longer use but are name brand, take them to a consignment store and see if you can turn them into cash. You’ll also support a small business in the process.
Grooming
Now is the time to downgrade your haircut to a low maintenance style. Usually, this means growing it out. Everyone working from home abandoned styling their hair seven months ago so you might as well grow it out and put it up everyday. Furthermore, if your hair is up everyday, why do you need to spend money on coloring or highlighting it?! Truth: I had my hair highlighted a month ago. This is may not be the right place for everyone to save, but I’m throwing it out there as an idea.
Likewise, 2021 is the perfect opportunity to perfect your at-home manicure, waxing and facial skills. Salons and spas have many high touch, communal surfaces. Do your health a favor and steer clear!
Media
Take an inventory of your subscription services: Prime, Audible, StitchFix, Birchbox, IPSY, magazines, BarkBox and so on. There are tons of others, but you get the idea. What can you get rid of? You do not need new clothes during a pandemic and I know Fido will survive without a new chew toy each month.
TIP: do you know you can get free shipping through Amazon without subscribing to Prime? As long as you buy $25 worth of qualifying merchandise (and most items qualify), your purchase will ship for free. Here’s the catch: you have to select the free shipping option. Amazon automatically selects the least expensive paid shipping option so you have to actively choose free delivery. When I think of something I need on Amazon, I add it to my cart and leave it there until I have $25 worth of products so my order ships for free. A frugal gal NEVER pays for shipping if she doesn’t have to. 😉
Final Thoughts
Next year is going to be a marathon. Since we can’t get out of it, get into it! Build up your nest egg. Put money away toward a down payment for a home or to start a business. Save to pay off student loans or to go back to school. Start saving for retirement. Use 2021 to put your your long term financial goals in motion. The sacrifices you make in the short term will support the life you desire in the long term.