Why spend more than you have to? Read on for tips to getting ahead by taking control of your finances.
Cutting Costs – Things You Can Do To Cut Costs
Turn Off Unneeded TV
When it comes to saving money there are things you need, and things you don’t need. A full package of cable or satellite TV channels is one of the things you just don’t need if you can’t pay the light bill. Cutting out unneeded or excessive TV channels can save $100 or more each month. If you are wanting to cut out more money have the TV turned off completely, you can still catch up on shows and news over the internet. Not to mention the library has lots of DVD’s to check out.
Cut Back On Power And Heat Bills
Power and heating bills can be one of the largest monthly bills anyone hase, and they can be quite substantial in overly hot or cold months. You can control these costs by keeping the settings below what you might normally run. You can save as much as 5% to 15% annually simply by setting the heat to 68F in the winter and 78F in the summer. For additional savings install a programmable thermostat that lowers the heat or raises the AC setting during times when no one is home or when you are asleep. There are also power saving devices that can be installed on your appliances by the electric company, many of which qualify for discounts on your bill. Another way to cut costs on your power bill is to weather proof your home or apartment. There are some low cost methods that even renters can benefit from including weatherstripping of windows and doors.
Stop Or Pause Your Collecting
Collections are fun, they help keep us enterntained, but in the realm of cost saving they are an unnecessary expense. In order to save money you may need to stop collecting for a while, or stick to a strict budget. Collections are one of the top areas in which consumers overspend and blow budgets, especially when that once-in-a-lifetime find comes along. If you have your eye set on something, or want to be ready in case something pops up, create a special savings just for that purpose. In some cases a collection can be reversed into cash flow, if you can bear to sell it. Perhaps cleaning out some of the older or duplicate items is the answer to getting the next item on your list. Taking this to the next extreme, a collection can be turned into a side business using websites like Ebay which connect collectors from around the world with the objects of their desire.
Make Gifts/Plan Ahead
Making gifts is a great way to save on money. It also shows the ones you love that you care enough to give from the heart. Homemade gifts can be as simple as kits for making cookies or soup, or as complex as handmade crafts or arts. A jar filled with the makings for chocolate chip cookies costs only a few dollars compared to what you might spend on a less thoughtful store bought gift, and are easy to make in bulk. If making a gift is not your thing planning ahead for gifts and buying appropriately as you find items is another method of keeping cost down. One idea is to do holiday shopping immediately following a holiday in order to get ready for the next year at the lowest cost.
Control Impulse Buying
Impulse buying is when you go to the store to buy one thing, and come home with it and two others you never intended to buy. This can be one of the toughest things for a cost saver to control, after all, store owners and marketers go to great lengths to advertise and shelve must-have items in your line of sight so you will buy them even when you don’t neccesarily need them. One way to overcome this is to shop with a list. Put everything you need on a list, budget for it accordingly, and when you go to the store only buy those items. If it’s not on the list it’s an impulse buy and you probably don’t need it, or it can wait until your next trip. One way to determine if you need something is to hold it for 10 seconds, if you need it you will still need it in 10 seconds, if it is an impulse you will realize it and be able to put it back.
Make Coffee At Home
Making coffee at home can save hundreds of dollar of month for someone who buys coffee out on a regular or daily basis. Think about it, a pound of coffee may cost $10 or $12, a cup of double espresso at Starbucks is $4. One cup a day, 5 days a week, will cost upwards of $80 per month. This is quite a lot when compared to $20 for 2 pounds of coffee that will make the same 20 cups of coffee or more. If you drink coffee during the day take it to work with you, most work places have a coffee maker or will allow you to set one up.
Eat At Home
This is the same as making coffee at home. Eating at home can save massive amounts of money on a week to week basis but does require a commitment on the part of the saver. It is all to easy to go out for lunch rather than pack them, especially when coworkers make a habit of getting lunch out. In the same vein, eating at home before going out for the evening can cut back dramatically on the costs of enterntainment. Also, when you cook, save your leftovers and eat them the next day. They can provide easy lunches for work and cut back on the need to cook every day.
Don’t Go Out So Much
Instead of meeting friends out at a restaurant or bar have a pot luck and invite friends to come over for socializing, games and fun. When you do go out avoid unneccesary expenses, unless of course it is a special occasion. Drink water instead of soda or alcohol, avoid appetizers and order meals that come with salads. A lot of today’s restaurants go overboard with portion sizes. If possible cut these meals in two and save half for lunch the next day.
Take The Bus
Transportation is a cost everyone shares. It costs to go to work, it costs to go to the store, it costs to maintain a vehicle. Much of these costs can be controlled to some extent, one way to do this is to take the bus or subway rather than a cab. Cabs and taxis offer some advantages over other forms of mass trasnportation, speed and directness of travel are two, but can have significantly higher costs than busses and trains. A taxi ride of only a few miles can cost upwards of $10 or $15 whereas the same ride on a bus or train may only be a dollar or two and the differential only grows with the distances traveled.
This may seem old fashioned but clipping coupons is still a top method for lowering costs and saving money. If you don’t believe me all you have to do is turn on the TV and watch any of several shows depicting the coupon cutting lifestyle. Some people are so good at it they not only get free groceries, they get money back from the store! It takes patience, you have to be commited to the task, but using coupons can easily save you 25% to 50% of your shopping bill on a week to week basis.
Buying In Bulk
Buying in bulk is yet another way to save money with your shopping bill. Buying in bulk may mean getting more than you need up front, and possibly spending more than you would have otherwise, but in the long run will provide tangible cost savings. The trick is to buy a different item each week and as needed, split the items into easily storable packages, and then replace as needed. Some items, like fresh meat and produce, will have to be purchased when you need them but if your pantry is filled with bulk pastas, grains, canned goods and other long lasting storable items your weekly bill will be noticeably smaller. Buying a deep freezer is also a help with bulk purchases of meat and other perishable products.
Many stores have membership and loyalty rewards programs. These either provide the member with immediate savings at the register or allow for discounted pricing once a threshold has been met. These progams are usually free and if not come with a fee easily recouped within one or two shopping trips. If there is a store that you use frequently there is no reason not to join. Even a 1% savings can add up to a substantial quantity when talking about the food or clothing bill for a family of four.
Books And The Used Book Store
Books are important to many people and can represent a healthy portion of any income if purchased new. A simple pulp fiction novel can cost $12 or more at today’s prices, it makes no sense to cut back in one area only to blow the savings on a new book. A great way to prevent this is to get books from the library, borrow or trade with friends and buy from the used book store. If you already have a number of used books you can trade them in and get a new set of books for free. Each time you go back take the old books with you and trade them in too.
Assess Your Living Situation
This is sometimes an area where cut backs can’t be made but it never hurts to assess your living situation. To do this ask yourself a few questions. Does it make sense to pay what you do to live where you live? Is there a cost saving benefit in moving? Would it be possible or wise to accept a room mate? It doesn’t make sense to go broke paying for too much living space, or to live in area too far from work, or where it is simply too expensive for your income. It may help to take in factors such as wear and tear on your vehicle as well as the cost of fuel, tolls or other costs of transportation.
Your car can be a large expense, especially if it is older, but there are several things you can do to keep those expenses down. First, keep it tuned with fresh oil, this will cut down on gas consumption. After that, avoid starting or stopping too quickly. Starting too fast burns more gas than you need and results very often in stopping too quickly. Stopping too quickly puts strain on your brakes and other parts of the car which result in them wearing out more quickly. Finally, don’t be afraid to drive for gas if you know you can save 10 or 15 cents a gallon to do it.
Beer, Wine And Indulgences
Beer, wine and other indulgent purchases are a welcome relief after a long day of work. They can also be a big part of your budget if not controlled. A 6 pack of cheap beer isn’t so cheap when you are buying one every 2 or 3 days. The same thing can be said of candy bars or cigarettes. Cutting back on these can result in significant savings over time if you are buying them every day. The next time you’re thinking of spending on one of these items put the cash in your coin bank instead. Do this a few times and watch the savings pile up.
Cut The Gym
You don’t need to cut your work out but it is likely you can cut the expense of a gym and save hundreds of dollars a year. Instead of a stationary bike ride a real bike. Use hand wieghts in your home or the park or go for a run. If you need or want classes use DVD’s or YouTube and even invite friends over to share the pain. If you have a gym membership but don’t use it, or use it enough to justigy the expense, it needs to be cut out.
Don’t Be Afraid To Buy Used
Many items can be purchased used through an internet shopping service like eBay or Craigslist. Items can be had for substantial discounts from list price providing huge savings without sacrificing quality. Most of these sites have a return program or guarantee so there is little risk involved other than your time. Flea markets are also great places to find cheap items and a trip to the market can serve other purposes as well. You may sell items of your own, or plan the day as an adventure rather than going somewhere expensive. Many flea markets include food vendors for quick snacks or household shopping and are a fun day for the family.
Do Your Own Minor Repairs
Learn to do your own minor repairs be they fixes to your clothing, possessions or home. Even the smallest repairs can add up to big bucks. It may cost $10 or $15 to hem a pair of pants or $100’s of dollars to have a repair man come out to nail up a loose board. A bicycle tune up can cost $45 and may be needed several times a year, the savings found here could equal more indulgences in other areas. Making your own repairs will also help give a sense of accomplishment and self reliance.
Budgeting – Things You Can Do To Track Your Money
Have A Budget
Having a budget is a clear first step to saving money. A clear plan of how much you bring in along with what you must pay in bills and upkeep is the best way to ensure all needs are met without spending too much in other areas. The first line item in any budget should always be the amount you plan to save each week, each paycheck or each month. It may be hard to save at first but once the habit is formed, and you see your savings balance grows, it will become easier and easier until it is second nature. If you go over budget look back to see where you went over, and where it may be possible to cut back.
Once your budget is made, only use cash. Only using cash is a handy way to help stick to a budget because it is all too easy to over-spend when using a bank or credit card. Once you make your budget take the appropriate amount of cash out of your account and divide it into its allotted amounts. If you need to, put each amount in its own envelope to keep them seperate. Then, when you go to the grocery store, the gas station or out for fun you will only be able to spend what you have. When the cash in each envelope is gone it is time to stop spending until the next budget period.
Save Your Change
Saving your change may not seem like much but it can add up over time. Whenever you spend your cash always save the change, and then put it in a jar or a piggy bank. This money can be earmarked for a special purpose such as an extra credit card payment, vacation or needed winter coats for the kids.
Bank Saving Programs
Many banks have programs to help you automatically save money such as Bank Of America’s Save The Change program. These programs will automatically sweep odd amounts of change from bank card and online purchases into a savings account and work as if you were spending cash and saving your own change. For example, if I were to buy a coffee that cost $3.47 the bank would sweep the $0.53 into my savings as if I paid for the coffee with $4.
Automate Your Savings
Regardless of the method, automate your savings. Having a bank account that automatically puts your savings into a savings account on a set day each month is the best method. This can be the day or the week after your check is direct deposited or any day of your choosing so long as it is done regularly. It is so much easier to accomplish when you don’t even have to think about it
Whatever you do, be realistic and be honest with yourself. Don’t set your goals to high, budget according to your means and don’t allow yourself to over spend. Once you set your budget stick to it, if you don’t have the money to go out with friends, or to buy your kids the latest gizmo, then you need to say so. You are your first and only line of defense.
Examine You Finances
Clean Credit History
Having a clean credit history is the best way to save money when talking about credit or mortgages. If you already have a clean history you will be well served to protect it and not default or pay late, if your history has some blemishes taking care to correct those issues will pay off in the end. A good credit history not only makes it easier to get credit when you need it, it will help you get the lowest rates and best terms.
Refinance Your Mortgage
Refinancing a mortgage can save money on a month to month basis that can total in the ten’s of thousands by the time the mortgage is paid off. The catch to this method of saving money is that it may cost you in up front costs. An appraisal of your home’s value may be the least requirement with costs going up from there. These could include closing costs, any needed repairs, upgrades or even an additional downpayment.
Look For Low Credit Rates
Looking for the lowest rates for credit is an easy way to save money. It only makes sense, a card with a high rate will cost you more over time than one with a low rate and this information is readily available across the internet. The caveat is that some cards will charge annual or one-time fees that may negate some of the cost savings so be sure to check before switching.
Look For High Interest Rates
When looking for banks or savings accounts always look for ones with the highest interest rates. If you’re going to let your money sit somewhere you should make the most for it. Higher rates may have stricter requirements so be sure to read terms and know what you are getting in to.
Take Advantage Of Introductory Offers
Many credit cards will offer introductory rates to attract new customers. This may mean 0% interest or a similarly low rate on new purchases or balance transfers, usually with a one year limit. After that regular rates, astronomical, will apply. It is possible to switch from one card to another to take advantage of these low introductory rates but there are risks. Some cards charge fees for switching, and if you do not pay off the balance by end of the term rates can go up and may even be higher than the initial account.
Fees can be the biggest crippler for a challenged budget. One bounced check can snow ball out of control leading to another and another, racking up fee after fee at the bank and at the point of sale. Avoiding these fees can save hundreds if not thousands of dollars and all you have to do is keep track of your income and spending. This can be hard, budgeting is the answer. Other fees that can add up over the course of a year are ATM fees. The best way to avoid these is to only use ATM’s provided by your bank and avoid those you find in convenient locations as they have the highest “convenience” fees.
Preventative Cost Cutting
Preventative dentistry carries up front costs but it will save thousands down the road. A 6 month check up at the dentis is usually free, a cleaning only a $100 or near to. The cost of filling a cavity goes up into the hundreds of dollars, a root canal or other major work tallies in the thousands. Spending a few hundred dollars a year keeping your teeth in good shape will not only save you the expense of more invasive treatments, it will also spare you the need of going to the dentist for major repair work.
Preventative healthcare ranks right up there with preventative dentistry as a means of saving money later in life. A few hundred dollars to ensure your health is good, or to take care of minor illnessess and conditions before they turn into more serious ones will not only save thousands in costs it will increase your standard of living and help make other cost saving efforts more worthwhile.
Preventative Automotive Repair
Preventative automotive repair is just as important as preventative healthcare. A few dollars spent keeping your vehicle in good repair will save the need for truly expensive repairs down the road, and may even save you from fines or tickets if you are operating in an unsafe condition. $35 for an oil change every three or four months is a bit less expensive than an engine overhaul or new transmission. Larger expenses like tires should be saved for, while saving shop for the best deals.
Saving/Savings – Methods To Hold Saved Money
Savings accounts are the easiest and most accessible means of holding money you have saved. The advantage of a savings account over a checking account is that it will usually pay interest, albeit a very small amount when compared to other forms of savings accounts. The true benefit of a savings accounts however is liquidity, the money is always in your account and always accessible within the terms of the banking agreement, you never have to sell or liquidate anything.
Money Market Account
A money market account is similar to a savings account but with a few distinguishable characteristics. First, they usually require higher minimum balances than a typical savings account. Second, they often come with a check writing feature which allows for limited access on a month to month basis. Interest received is slightly higher than in a savings account but only just. This type of account is slightly less liquid than traditional savings but slightly more liquid than a certificate of deposit.
CD’s, Certificates of Deposit, not to be confused with the latest music album, are a form of savings with a slightly higher yield. CD’s are short term investments with set terms, usually something like 30 days, 6 months or one year with a fixed rate of return. They are a great way to hold money you may not need right away and pay the highest rates of return depending on amount of deposit and term limit.
App’s For Saving, Cost Cutting And Cash Back
This is an app that can be used by individuals or families. Accounts and budgets are synced together so that they can be tracked in real-time by anyone included in the group. Anytime a purchase or deposit is made it is available for all to see. Savings are also accounted for and can be planned for future events such as car repairs, dentist visits or emergencies.
This is one of the top ranked budgeting apps on the market. It is free and comes with versions for iOS, Android and Windows. It syncs up all your accounts in real time, tracking your spending and budgeting goals. Cash transactions have to be manually input but are also easily tracked. This ones goes a step further and includes information on your savings accounts, retirement plans and investments.
This app combines the features of several top apps and includes real-time tracking of your debit and credit card purchases. Personal budgets are set with “envelopes” that have budgeted amounts alloted to them. Spending is tracked on an all-account and budgetary level allowing users to see where overages and underages are happening.
Ibotta.com lets you customize your discount shopping experience. Once you download the app you choose from a list of categories or search for products and then perform fun taks to unlock deals. You earn points when you verify your purchases and earn cash back, payable through Paypal and other types of eWallets.
This app lets you shop at your local store, earn points and cash out every time you reach $20. They provide a list of deals available in any store you are in. You shop, if you buy one of their products you earn points. All you have to do is scan your receipt with your phone to get credit.