I love to find “money drops” in our household processes. “Money drops” are those processes that, if not reviewed at least annually, results in you insidiously dropping money throughout the year that could add up to hundreds of dollars that you can invest or use for other purchases. I earned $70 in Found Money last week. Here’s how:
Something jarred our brains to evaluate the homeowner’s insurance to verify if we receive a discount for the security alarm system. Sure enough, our homeowner’s insurance does have a 5% discount for a security alarm system. One may self-talk “5% is not worth the trouble to submit a certificate.” I guess it depends on what 5% is of what total amount. 5% of our homeowner’s insurance was $70. They sent us a check. I liked that. $70 pays for 1.25 months of the monthly alarm system fee. That’s OK. Moving forward, we will save money on the premium.
Here’s my thinking and probably many others out there. 5% on a restaurant bill doesn’t even take care of tax. But 5% of total purchases throughout the year could be hundreds of dollars if not more. We wouldn’t just drop $500 in a barrel and burn it.
Let’s say you have a household income of $40k. You have $30k in purchases/expenses capability. If you save 5% on everything for a year that is $1500/year. Now, in reality, that is not feasible because your mortgage or rent may be 50% of your buying power. But, if you strive to save 5% on half of those purchases, that is $750. Hmmm, that’s 75 bottles of wine… ok, let’s not be wine hoarders.
What would you do with $750? Invest? Go on vaca? Add to your kid’s college fund?
Have fun with your 5% action plan!
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