How to Slash Your Expenses and Save MORE This Year

Mindy:
Hello, my dear listeners and welcome to the BiggerPockets Money Podcast. Every Thursday in January, we are doing 24 money tips for 2024. My name is Mindy Jensen, and joining you today is my financial dreamboat co-host, Kyle Mast.

Kyle:
Oh, my goodness. Hopefully people are listening to the podcast and not watching on YouTube so they don’t know that that is not true.

Mindy:
You’re blushing. You know it’s true.

Kyle:
I probably am, yeah.

Mindy:
Kyle, what is your first tip for today?

Kyle:
For today, if you’re getting tax refund, set it up so that it goes directly to your savings account. That’s money that you can maybe pretend that you didn’t get it. It’s maybe a hard habit to break for some people. Each year you count on this tax break to maybe put the down payment on the new car that you’re going to buy and put payments on, or do some big gift. Try to do something with it that you don’t feel that it’s there. Another good option would be to pay it towards some debt for an instantaneous guaranteed return. If you have got some debt that’s got five to 10% interest on it, student loan debt, car debt, if you can discipline yourself to get it in that category before you’re able to spend it, you’ve guaranteed yourself a return on that indefinitely on those funds. But yeah, don’t let that tax return get away without working for you.

Mindy:
Re-quote your insurance. Contact an insurance broker who works with a bunch of different companies and ask them to give you a quote on your homeowner’s insurance, your auto insurance, your health insurance if you’re buying it on the exchange. Whatever kind of insurance that you’re looking for, get another quote, especially if your insurance premiums just went up. Insurance companies, here’s a hint, they don’t reward loyalty. You’re a loyal customer for 100 years and they’re like, “Hey, we’re just going to jack your prices up every single year.” Don’t reward them with your loyalty if they’re not rewarding you with theirs. Get your quotes. Get your re-quotes and see who’s got the best deal. Don’t forget to take into account that sometimes service is an issue with these lower priced insurance companies. So if having great customer service is a concern to you, also consider asking your current insurance company to match the quote that you’re getting. Another tip is to consider increasing your deductible so long as you can afford that deductible so that your premiums come down.

Kyle:
Oh, that’s such a good quote. I just have to comment on it a little bit. Especially the piece of focusing on the service piece of it. We had two cars totaled this year, got hit twice. Our minivan got hit with me and my wife in it, and then I got hit in our other car. So we have two different vehicles than we had earlier this summer. And the experience we had with our insurance company was phenomenal. And the experience I had with the other discount insurance companies of the other individuals in the accident was a big difference. So just keep that in mind, Mindy’s little tip there about having to match the quote is a great way to go about it.

Mindy:
And here’s a bonus tip, apparently don’t drive with Kyle.

Kyle:
Yeah, big bonus tip for sure. I’m a magnet. I don’t know what… Yeah, I don’t know. Never been an accident before. Oh, no, that’s not true either. Okay, just don’t drive with me.
All right, next tip. Evaluate the fees on your investments. Now this one I like because I come from the industry. I had a financial planning firm. I’m a CFP, so I can talk bad about me and my fellow industry. Make sure that you are getting value for what you’re paying for. And I would say the best thing to do if you have a financial planner, if you have a financial advisor, whatever the person goes by, ask them specifically how they get paid. Do they get paid a commission on an investment that they do with you? Do they get paid a percentage of that investment? Do they get paid hourly, a retainer fee? Make sure that you understand exactly how you’re being paid. That’s step number one.
You can pay them in all those different ways. There’s nothing inherently wrong with those. The thing that’s an issue in the industry is a transparency. So just make sure there’s transparency there with your financial advisor, with your financial planner. And then figure out from that standpoint if that’s worth your time, if that’s worth your money to have them manage that. And what other benefits you might be getting from that. Are you just getting investment advice and is that valuable enough? Are you getting financial planning advice regarding taxes, estate planning, insurance, social security planning? What value are you getting? Maybe determined that it might make sense to switch some to a do-it-yourself program. You can save a lot on fees on investments in particular by just doing it yourself. And then maybe you might be able to find a financial planner that you can pay hourly to really go over things and make sure you’re on the right track.
One thing that you will run into, and I don’t remember the episode, I’ve talked about this in the past when we talked about finding a financial planner, but one thing you’ll run into that if you find a good financial planner that will do hourly work, it’s not going to be cheap because their time is very valuable and it doesn’t make that much sense for them to spend a whole bunch of time when they’re not going to be allowed to help you along the way indefinitely. So just keep that in mind. But this is definitely something to check out as your investment portfolio grows because these fees can add up substantially. And if you’re not getting the value that’s offsetting, whether that’s just having them help you save the time of doing it yourself or finding other savings or benefits such in taxes in particular, if you’re not getting that benefit, then you need to probably consider doing it yourself or find another avenue to do it.

Mindy:
This is one that I hate to bring up because it’s not very fun, but start thinking about dying, wills, trusts, custody of children, et cetera, and write it all down. There is a family emergency binder from the Smart Money Mamas group. I think it’s smartmoneymamas.com. It’s either an online option, a printed out version, and it’s essentially all of your important information, all of your documentation, all the numbers, all the passwords, everything that you need in one place. So should you pass, should you have an emergency that somebody else needs to get this information, all you have to do is hand them this little document and say, “Here you go. Here’s all my information.” Or share with them, “Hey, everything’s in this space should you need it.” This is a bit of a morbid thing to think about, but you don’t want to pass away without having a succession plan because then you’re just creating a whole host of problems for your heirs and for your estate.

Kyle:
That’s such a good one. Sometimes that can feel overwhelming. One suggestion I’d have, if you feel overwhelmed in getting started, create a shared note in your phone with your spouse or whoever that you need to share that with. If you’re single, share it with your dad or your mom or someone that would be in charge of things if something happened to you. And just start adding a few things in there. What happens to your rental property if you die? Or what should your wife do with the life insurance if you die? Just kind of write some stuff in there, have it shared in there and add to it over time. And then you can get serious and do some more serious stuff down the road, but at least there’s some direction for someone and you can get started without it being too much work.
Next one, I like this one. Swap out all your regular light bulbs for LED light bulbs. Now that may seem kind of simple, I don’t know if that’s the right word for it, but obvious, but how many people still have light bulbs that cost twice as much in their homes when they could be switching them out? And for me, short-term rental properties that have a whole bunch of light bulbs, and I definitely make sure those are all LED. But more importantly, this money tip is probably better thought of as the tip of the iceberg, to reframe your thinking on what recurring expenses are you letting go that with a simple one-time switch could become very minimal or nonexistent recurring expenses? And an LED light bulb is just a cool little illustration of that, but it can be all kinds of things from subscriptions that you don’t need anymore, from driving to a coffee shop that’s farther away than one that’s closer.
There’s all kinds of different little things that if you can, in your mind, remember to evaluate recurring expenses and see if you can reduce them permanently in a one-time action, it’s just a huge return on the investment of your time.

Mindy:
Another tip is using less water, less resources in general. Install low-flow shower heads, low-flow toilets, faucet aerators to reduce your water usage and your water costs. Anything you can do to bring down your costs in ways that honestly you’re not going to notice once you take action is a bonus for you and a bonus for your finances.

Kyle:
I need to interject here. My wife will not be happy with me if I don’t interject about faucet aerators. This is something I did several years ago and I quickly was told that it had to be switched back. So make sure that when you’re doing these money hacks, weigh the financial implications versus happiness and happiness of family members. It’s a great way to save money for sure. And we have low-flow shower heads, they work just fine, but for some reason, the faucet ones that I put on just were ridiculously too low-flow. I probably went too overboard on it. But just make sure that these things, you’re prioritizing things that aren’t going to hurt you in your lifestyle too bad that are just kind of no-brainers. And some of these you can just leave it the way it is if that’s a happiness issue for you. So my wife would definitely want everyone to know that, that you don’t have to do every one of these tips.

Mindy:
That is a good point. You know what? That’s a really great point. There’s no reason to do everything and then have a totally horrible life. So Mrs. Mast, thank you so much for your interjection. Not everything has to be done. You can pick and choose the ones that work for you.
And lastly, Kyle, in the wintertime, you drive around and you see the house with all the icicles on the side of it, and maybe the Christmas lights are up underneath and it’s like magical and beautiful. You know what that says to me every time I drive past because my husband Mr. Jensen always rants and raves about it? That says to me that there’s not enough insulation in that attic. Heat rises, so the heat from the house goes up into the attic. It melts the snow on the roof, and then the outside temperature freezes it, causing it to drip down into these beautiful looking icicles. So if you have icicles on your house, you don’t have enough insulation in your attic.
You can add insulation. It’s actually quite easy. You can get the rollout kind, you can get the sheets of insulation. Or you can do what I have done and blow in insulation. Now, this is a two person job, but places like Home Depot and Lowe’s will rent you this giant machine that you push these bales of insulation into and it chops it up, and then somebody up in the attic is blowing this big, huge tube of insulation all over the place.
I just described something that sounds way harder than it actually is. It’s a two person job. It’s very easy to figure out how to do this. And usually the machine rental is free if you buy 20 bats of insulation. It has been my experience that you buy the 20, you figure out how many you need when you get back to your house, you blow all in, you bring the machine back, you return whatever you don’t use, and they never charge you for the machine. That’s been my experience. However, your mileage may vary. What isn’t up for debate is that you probably need more insulation in your attic, especially if you’ve got those icicles.
All right, that wraps up this week’s tips. We will be back next week for more. In the meantime, we would love to hear your money tips. Drop them in our Facebook group at facebook.com/groups/bpmoney, and we will see you next week. Thanks, Kyle.

Speaker 3:
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Mindy:
BiggerPockets Money was created by Mindy Jensen and Scott Trench, produced by Kailyn Bennett, editing by Exodus Media, copywriting by Nate Weintraub. Lastly, a big thank you to the BiggerPockets team for making this show possible.