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How to give yourself a $12,000 raise

GOBankingRates logo GOBankingRates 8/17/2016 Jeanette Pavini

You are not alone if you haven’t received a pay raise recently or if your cost of living has exceeded your income. So, what if I told you that it’s possible to give yourself a raise?

Shaving $8,000 a year off of your expenses can be the equivalent of giving yourself about a $12,000-a-year raise before taxes. It starts with a review of where our money is going and replacing certain expenses with less expensive alternatives.

There are two types of expenses in your monthly budget: expenses that are set in stone, like your rent or tuition, and then flexible expenses that you have some control over, like groceries or entertainment.

Use some of these strategies or all of them — try them daily or twice a week. The more you follow them, the more you save. So, let’s get started on that raise!

1. Grocery Shopping  

A family of four spends as much as $296.30 a week on groceries, according to the May 2016 data from U.S. Department of Agriculture. That is $15,407.60 a year. But, I estimate you can slash your grocery bill by at least 35 percent by doing these four simple things:

--Build your weekly menu around what is on sale at your grocery store. You will find the weekly deals in the paper flyers that come in the mail, or you can look online. Sales usually start on Wednesdays.

--Join the store loyalty program. They are usually always free, and you get these added sales and perks at check-out.

--Find matching coupons to save more. Search to find hundreds of coupons for items on your grocery list. Think everything from cereal to shampoo. And remember, coupons are like free money.

--If a sale item you want is out of stock, ask for a rain check. That means when the item comes back in stock, you will get it at the sale price. I have saved thousands of dollars over the years by doing this.

By making these changes to your grocery shopping routine, you can save about $5,393 annually.

Click ahead to see eight more ways to give yourself a raise.

brown bagging © Provided by Gobankingrates brown bagging

2. Brown Bagging It

Now that you have the grocery shopping savings strategies in play, you can take things a step further. When I was growing up, we brought a bag lunch every day to school. My dad had his brown bag lunch for work. We even had to bring home our brown bags to reuse them. But it was smart.

By packing your own lunch, you will shave thousands — yes, thousands — of dollars off of your yearly food expenses. And quite honestly, you can make a sandwich just as good as a deli can.

Here’s an example: Let’s say the average deli sandwich with turkey and cheese, a bag of chips, a cookie and iced teas costs you about $11.50 a day. That is close to $3,000 annually just for lunch, and that is per person. I estimate you can create that same lunch at home for about $2.53 a day, or about $660 a year. That is a yearly savings of about $2,340 per person.

Use the same strategies when buying your lunch groceries that you use for grocery shopping. Plan your lunches around what is on sale and use coupons. When you look at the numbers here, this is a smart move for saving.

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3. Do Less of the Designer Coffee and Muffin

The same strategies apply to your morning coffee and breakfast snack. This is where we unconsciously spend.

But the fact of the matter is spending $2.10 on a latte adds up to nearly $550 annually. And, spending $2.45 for a scone or muffin is another $639 annually. By making your own coffee and bringing a snack from home, I estimate you will save about $800 a year.

As you can see, the money we spend on food can make a big difference in our annual budget. It is a matter of taking a few minutes to do some planning and preparing. So, think of it as a time investment. By making these changes with your grocery shopping, brown bagging it for lunch and skipping the coffee shop, you can save about $8,500 — which is like earning $10,000 or more on your pre-tax income, depending on your tax bracket. So, if you think of it in these terms, it’s worth the time it takes to apply these strategies to your life.

Now that we have the grocery items off the checklist, let’s move onto other ways to give yourself that raise.

Related: 10 Habits That Could Help You Save Thousands

give yourself haircut © Provided by Gobankingrates give yourself haircut

4. Haircut and More

Before they can graduate, many cosmetology students need to log a certain number of hours on real clients. That means low-cost cuts and colors for you. Prices vary by salon, but I found one school that offered cuts for $9 and hair color for $25.

In addition to the basic cut and color, they typically offer all the services you would get at a salon, like prom up-dos or manicures. Depending on the services you need, you can save between $500 and $800 a year.

5. Dental Care

Dental students also need to practice on real patients. Get a simple cleaning or filling. Some specialized programs also offer more advanced procedures like implants.

Sessions are usually closely supervised, so you can feel confident in your care. But if you’re not comfortable with a student, you might be able to pay more for a post-graduate or faculty clinic. Example pricing: I found student cleaning for $50 and faculty cleaning for $88 at one school. 

Save around $160 for two adults’ teeth cleaning twice a year.  

6. Vision Care

Just like dental colleges, some optometry colleges also need patients for the advanced students. So, you might be able to get a basic eye exam at a fraction of the price, saving around $60 a year on eye exams, by my estimate. 

do it yourself dry cleaning © Provided by Gobankingrates do it yourself dry cleaning

7. Do-It-Yourself Dry Cleaning

Buy an at-home dry cleaning kit, and never spend money at the dry cleaners again.

A $10 kit will cover four loads of several garments each, saving substantially over the cost of bringing it to the professionals. Depending on how much you spend on dry cleaning every year, you might be able to save around $300.

8. Gym Membership

The reality is a lot of gym memberships go unused. And while the typical gym membership might cost between $40 and $55, some are in the hundreds.

Consider streaming your workouts online, or see if any are included with your cable package. You can also switch to a no-frills gym. For example, some community colleges offer inexpensive membership access to their facilities. I estimate you can save between $600 and $850, depending on what you decide to do.

shopping online © Provided by Gobankingrates shopping online

9. Shopping Online

Don’t make a single purchase online without checking for a coupon code. It takes a minute to do, and the saving can be significant.

You will find thousands of coupon codes on everything from travel and wine to clothing and sports gear. At the very least, you will find free shipping. You can save hundreds of dollars a year by using coupon codes.

Honorable Mentions

Here are other ways you can save money. They add up to savings, which just adds onto that raise you are giving yourself:

Price adjustments. When making a purchase, especially those over $100, ask what the store’s price adjustment policy is. Basically, what this means is if the item goes down in price within a certain period of time after your purchase — usually 14 days — the store will give you back the difference between what you paid and the new sale price. So if you paid $100 for clothes and 10 days later those same clothes were on sale for $60, you would get $40 back.

Compare gas prices. Use a gas price comparison app to find the cheapest gas in town. Often, it’s at warehouse clubs, and members should take advantage of these savings.

Use loyalty cards. Some grocery stores will reward you with gas savings when you shop for groceries with your loyalty card.

Take public transportation. Find out how much you can save by taking public transportation to work. You may also be able to take advantage of commuter tax benefits. Plus, you’re hands-free, so you can use the ride to get a head start on work, take care of personal business or even read a book. If you are a household of two drivers taking separate cars and you downsize to one car, I estimate you can save on about $10,174 a year.

Take advantage of our public library. Library cards are for more than just books. You can also rent movies, CDs and, in some cases, tools. Libraries also host a lot of free activities like lectures, craft workshops, book clubs and cultural fairs.

Get a rewards or cash-back credit card. Are you getting rewarded for your spending? Reassess your credit cards, and consider a card that offers cash back on your purchases. Maximize bonus offers. If you have a card that offers double cash back on groceries, make sure you always use that one when grocery shopping. Savings vary by credit card and spending, but plan on 1 percent savings on overall spending, plus bonus categories like 2 percent on groceries and 3 percent on gas.

Resale shops for kids. You will find great deals at resale shops for kids’ clothes, costumes and sports gear. Not only can you find great deals on plenty of like-new items, but when your kids outgrow these items, you might be able to turn them back into the resale shop for either a store credit or cash.

Invest in annual memberships. Here is one of my all-time favorite tips, and it has to do with having some fun. It can cost you thousands of dollars a year to keep the kids entertained. What many people don’t realize is if you buy a yearly membership to one local museum, you might get in free or low-cost to other museums and attractions. This is, of course, in addition to the free admission for a year to the museum you purchased your family membership with. Just ask what their reciprocal program offers.

Get your medicine for less. Prescription drugs add up and can really put a dent into your cash flow. Be sure to find out how much your medications will cost through a warehouse store like Costco or Sam’s Club. Many times, their prescriptions are significantly less than other pharmacies. And what most people don’t know is that you don’t need to be a member to take advantage of these savings in some states.

Keep Reading: 9 Secret Ways to Save Money at Sam’s Club

If you follow these savings strategies, you are not only giving yourself the equivalent of a significant raise, but you are taking control of your personal finances. It’s empowering. Now, your biggest concern will be where to invest your new-found money.

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