By: Jamie Wiebe
Published: September 21, 2016 (Reprinted from the National Associate of Realtors)
Classic advice -- with a few modern twists for today's homeowners.
Your grandma and her ma before her knew how to pinch pennies. Bet they knew where every dime of their household income went. Do you? Don't kick yourself if you don't. It's tough in this day and age of automatic billing and apps that tap your debit card.
But we all could still learn a thing or two from grandma. Here are a few money-saving and money-making habits that your grandparents cultivated -- some with a few modern twists that your grandparents wish they'd had back in their day.
1. Rent Your Rooms -- and More
Your four-bedroom Cape Cod was ready for your future rugrats the day you moved in. But you? Not quite so ready. Your grandparents knew that extra space was a goldmine, and would rent it out. You've got it even better today with Airbnb or HomeAway (just make sure to check city regulations first). Or commit to sharing space long-term: Finding a roommate makes you an honest-to-god landlord (and could score you a new bestie!), complete with tax deductions and blessed additional income. There are other ways to leverage extra space that are easier today than in your grandparents' day because it's so easy to use the internet to advertise. If you're lucky enough to live near a concert venue or ballpark, let attendees park in your driveway or parking space for some extra cash. Have a rooftop patio perfect for parties? Check out Splacer, a new online marketplace for event planners, which can turn your home into a money-making event venue.
2. Revisit Your Insurance
The coverage you needed when purchasing the home might not be the coverage you need forever. Perhaps you sold your grandmother's antique diamond ring, added a security system, or finally ditched the trampoline. Any of those things could actually make your rate go down. Give your agent a call to make sure you're not over-covered. You might even find savings on things you didn't realize come built into your insurance."A lot of times, you find you have double insurance," says Deb Tomaro, a REALTOR? in Bloomington, Ind. When a breach compromised her personal information, she set out to buy identity protection -- only to find it was included in her homeowner's policy."I would have paid for double coverage," she says. "I didn't know that until I asked."
3. Research the Problem Before You Pay Someone
Your grandparents would have raged about paying someone for something they could do (or learn to do) themselves. Google DIY options before calling a pro -- you might find your irritating issue super easy to fix on your own (and way, way cheaper). Hiring a plumber to fix your leaky fill valve might cost $45 per hour (or much more). Handy homeowners might spend $25 or less on materials, saving you enough cash for a decent bottle of wine. And don't bring out the handyman to fix cracking caulk -- a $4 tube from the hardware store will do the job nicely. Related: Here's a List of Common Repairs and How Much They Should Cost
4. Stock Up That Fridge
File this under strange-but-true: A full fridge regulates temperature better than an empty one. Open space in your refrigerator fills with warm air whenever you peek inside, making your poor appliance work overtime. Your grandparents' fridges were smaller and easier to fill, so it wasn't an issue for them. But today's larger fridge/freezers can waste significant energy. So go ahead, stock up on veggies, meat, and milk -- just don't let your grocery costs run amuck in the process. If you can't fill it with usable food, place pitchers of water in your fridge to take up the space. And set your fridge between 36 and 38 degrees Fahrenheit for max efficiency.
5. Get FREE Stuff From Your Utility Company
Now this is a new one on your grandparents. Energy efficiency wasn't quite the thing that is today. So, believe it or not, unlike a couple of decades ago, your utility company is working to save you money. Their methods might even be a little Oprah-inspired: •You get a free LED bulb!
•You get a free energy audit!
•You get an HVAC coil cleaning!
That's right. Some utilities give away free stuff, like usage assessments, efficient bulbs, water-saving shower heads, faucet aerators, and more. And they may offer rebates for upgraded appliances. Bet your grandparents would have snapped those up if they had the chance."There are tons of ways to save," says Steven Hughes, founder of Know Money, a financial literacy advocacy organization. "Some [utilities] are even sending out solar-powered panels to different houses, depending on the neighborhood, for no cost."
6. Watch Your PMI
What's PMI? Private mortgage insurance. If you put less than 20% down on your home, you're probably paying for PMI, which protects your lender if you default on the loan. But once your loan-to-value ratio hits that blessed 20% mark, call your lender to cancel it. Lenders aren't required to remove it until you're at 22% -- meaning an eagle eye can save you a good bit of cash. You'll save between $600 and $1,200 for each year's worth of premiums you can avoid (for a typical homeowner). You might reach the goal post earlier than you think."PMI usually ends seven or eight years down the road, but if you've made big changes to the home, you might reach that 20% value much quicker," Tomaro says. Most lenders will require an appraisal to determine if you've passed the magic number. Related: Here's What to Do to Cancel Your PMI
7. Resist the Urge to File an Insurance Claim
Your homeowner's insurance company doesn't need to know about every bump, scrape, and petty theft. Think about how much you're willing to pay out-of-pocket before an incident occurs. Frequent claims can increase your insurance score. That's right, your insurance company gives you a score, which can affect your premium, so carefully assess your budget and deductible before filing. quote 10 "Have a conversation with all the decision-makers," Tomaro says. You might decide you'll skip any claim that would cost less than $1,000 to fix. In that situation, increasing your deductible might make sense -- and it will save you on your monthly premiums.
8. Negotiate for the Best Price (You Can Do It!)
Accepting the first price you see can cost you -- even when it comes to things like insurance premiums and handyman quotes. And you can put those haggling anxieties to rest: You don't need to be a hard-nosed negotiator to save money on your monthly payments. Often, asking politely for another rate is enough. Some home insurance companies offer discounts or extended coverage for teachers, long-term customers, and other groups. And when it comes to your cable bill, mentioning you need to check out a competitor before committing might net you another year's worth of free HBO
9. Reap the Power of Rags
Although paper towels did exist back in your grandparents day, they didn't spend money on them when an old rag would do. Disposable to them meant throwing money away. Follow their lead, and skip the one-use roll for washable rags, available in cheap multipacks. Or use the rags you already have: old T-shirts, cut-up beach towels -- even socks work. Even if you calculate the energy cost to run a load of laundry just for rags, you'll still come out ahead by replacing your paper towels, unless you're tossing your rags in the wash after every tiny wipe.