As the economy continues its downward spiral and we all continue to watch our pennies, we often hear the same tried and true money saving tips being repeated---spend less than you earn, cut back on buying wants, yadda yadda yadda. As gift buying season continues and as many begin thinking of money-related New Year’s Resolutions, we thought a group discussion on your best money saving tips was fitting. Trent at The Simple Dollar recently posted on reader submitted comments for saving money. We’ve reprinted the entire article below because it’s just that good.
What are your own best tips and actions for saving money? Please share your tips in the comments section below so we all can learn something new.
The Readers Speak Out: Their 25 Best Actions for Saving Money
Trent :: The Simple Dollar
A few days ago, I mentioned my single best action for saving money in my own life - utilizing the library. I also encouraged readers to submit their own best actions - and did they ever! The post has already received almost 250 comments and several dozen more readers emailed me their single best action.
As promised, I’ve compiled a list of all of these actions. Here are the top twenty five - basically, these are the ones that were repeated more than twice. These aren’t in any particular order. If you want some direct personal finance actions that have actually worked for people, here’s your list.
1. Utilize the library. Many readers agreed with my statement about how valuable the library is for those who read avidly. Not only can it save you on the cost of buying books, it can also provide DVDs for viewing, CDs for listening, and many other interesting cultural experiences if you pay attention to the schedule of events.
2. Use online bill pay. Not only does online bill pay save you the expense of envelopes and stamps (roughly fifty cents per bill paid online), it also provides you the convenience of auto-calculating your bills and comparing them immediately to your checking and savings account balances. No more checkbook math necessary.
3. Get your paycheck direct deposited. Instead of receiving a paper paycheck, have your paycheck directly deposited into your checking account. This spares you the need to have to go to the bank to cash your check, plus relieves you of the temptation to have some cash taken out of the check when you deposit it.
4. Make your own lunch and take it to work with you. Instead of eating out every day, brown bag it! Prepare a lunch the night before and take that lunch with you to work the next day. It can be leftovers, it can be a fresh meal (like a sandwich), but either way, it can cut into your costs tremendously.
5. Stay home. Instead of going out on the town for entertainment, stay at home and enjoy the activities available in your domicile. Most of the activities you can do at home - reading, watching television, exercising, playing games with friends, meditating, listening to music, cooking, etc. - are far cheaper than similar activities you might do out of the home.
6. Set up an automatic savings plan. If you’re getting your paycheck automatically deposited, consider setting up an automatic savings plan to have some of that money routed into retirement or into a savings account for an emergency fund. It’s far, far easier to start saving if the actual transfer of money happens automatically without your intervention.
7. Build an emergency fund. Alongside that advice comes the idea of building an emergency fund, a cash reserve that can help you in the event of a crisis such as a job loss or an automobile breakdown. It’s easy to build one - just sweep a small amount of money on a regular basis into a savings account, watch it build, and utilize that cash when the time comes.
8. Stop smoking or drinking. Expensive consumables can be a huge drain on your financial situation. Eliminating a consumable habit, such as tobacco or alcohol, can quickly improve your financial situation while also improving your health (which can also improve your financial situation by reducing health care costs).
9. Use the “envelope” system. Many people swear by this method, in which one actually budgets their money for a month using “envelopes.” Whenever you need money for, say, groceries, you take money out of the groceries envelope - when that envelope is empty, you’re out for the month. This forces you to be careful with your spending in all respects.
10. Stop looking at ads. Advertisements of all kinds - from television commercials to flyers from the Sunday paper - simply serve to coerce you into spending money on things you don’t actually need. Minimizing your exposure to advertisement minimizes the temptation to spend that money, keeping it at home in your wallet where it belongs.
11. Ditch cable television. Cable television is often a pricy monthly bill and all it does is provide you with more channels that repeat variations on the same content. Get a digital converter box instead and watch the channels that come in over the air - ABC, CBS, NBC, PBS, Fox, and often others. And they’re free - no monthly bill!
12. Drink more tap water. Tap water makes you healthier (most people are somewhat dehydrated, even if they don’t realize it), fills you up (keeping you from overeating expensive food at meals), and is incredibly cheap compared to any other beverage out there. Take advantage of the tap - it can save you a ton of money on beverages and on food.
13. Eat out less (esp. fast food) and cook at home instead. Every time you purchase prepared food outside the home, you’re spending more than you would making a similar meal at home. So why not adopt that as a platform instead? Learn how to cook at home, make your own meals, and save a lot of money.
14. Stop shopping for fun. Shopping is a very expensive form of entertainment. Instead of shopping with your free time, find other fun things to do - almost anything is cheaper - and leave the shopping trips for the times when you actually need an item.
15. Use the “ten second rule” (or some close variation of it). Whenever you are tempted to spend your money on something frivolous, stop for a few seconds and ask yourself whether you really need this item. Ten seconds is usually enough - many people also recommend putting the item down and leaving the store, only returning if you’ve decided you actually want it after some serious consideration.
16. Accept help from others. It’s easy to let pride get in the way of accepting help from others. Don’t let that happen. Be willing to accept help if others offer it, and be thankful for it. Later on, when your situation improves, you can pay it forward and help someone who needs it.
17. Plan ahead for meals. At the start of a week, make a careful plan of what meals you’re going to eat during the week, then make a grocery shopping list based solely on those meals. When you go grocery shopping, stick to that list. This is a great way to keep your food shopping bill low while keeping the food you want and need on the table.
18. Go on a diet. Many people recommended healthy dieting as a tactic for saving money. If you make a conscious choice to eat less, not only will you save money on your food bill, you’ll also reduce your health care bill and perhaps your clothing bill as well (since it’ll be easier to find consignment clothes).
19. Eliminate expensive hobbies. Are you engaged in a hobby that requires a lot of financial upkeep, like golf or collecting? Instead of continuing that expensive hobby and watching it drain all your money, choose a different path entirely - find a new hobby to focus your energy on that doesn’t require so much upkeep cost.
20. Stop reading women’s magazines. This is perhaps the biggest surprise on this list for me, but several readers swear by it. They argue that women’s magazines are extremely effective at convincing you to shop for things you don’t necessarily need, convincing you that you need some item in order to keep up with the crowd. Spare yourself the guilt - skip those magazines.
21. Make a budget/spending plan. If you can’t seem to get a grip on your spending, try assembling a budget/spending plan so that you can clearly see where your money is going. Spend a month or two keeping careful track of what you actually do spend on certain items, then set a spending goal for that type of item. This can simultaneously serve as a wake-up call and as “training wheels” for good financial habits.
22. Set strong goals. Don’t fleetingly think about how you wish things were. Instead, sketch out exactly how you want your life to be in, say, five years, then focus all of your actions toward that goal. Not only can this cut out frivolous spending, it can also help you to make strong choices to improve every aspect of your life.
23. Stop worrying about what other people think. Don’t let the opinion of others rule the choices you make in your personal life. It’s not their life to live - it’s your life. Instead, make choices that you think are strong - and don’t worry about the neighbors or the naysayers.
24. Sell your car. A car is perhaps the worst investment you can make. It depreciates rapidly, breaks down regularly, and requires constant upkeep. Instead of dealing with this, sell the car and make do with the other transportation options available to you - a bicycle, buses, trains, and so forth.
25. Be accountable to what you spend. Finally, try having a weekly or monthly review of all of your spending. Make yourself face the mistakes you’ve made - don’t let a bad spending move lie in the dust and be forgotten. Use it as a tool to make sure it never happens again.
Hopefully, these tactics spur you on to great things.
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What are your own best tips and actions for saving money? Please share your tips in the comments section below so we all can learn from your wisdom.
Showing posts with label Finances. Show all posts
Showing posts with label Finances. Show all posts
Tuesday, December 16, 2008
Tuesday, December 2, 2008
TUESDAYS WITH MIRIAM :: How Do I Start Saving?
Miriam is an Assistant Manager at a national banking institution. Her weekly posts will help you prepare for the financial realities of education and life. Be sure to leave a comment or send an email if you have specific financial questions.
How Do I Start Saving?
Given today's economy, we are all worried about whether or not to save. So, you may ask, what do I do? My answer is that you should always continue to save regardless of what is going on in the economy around you. However, you must be smart in what you are doing to make sure that you are not losing money. Regardless of whether you are holding a job or a student, it is important to start now. Did you know that if you save $4,000 for 30 years at a 5% interest rate, you would have approximately $279,000 saved? However, if you start 5 years later, you would only have $200,000. You would forfeit almost $59,000 worth of interest!!! A common question that many people ask is, how do I start saving? Here are a few tips to help get you started.
1. Start small: Open a savings account at the bank where you currently have a checking account. Banks will typically offer you a free savings account if you have a relationship with them so that you have time to build your balance. If not, open up a second checking account to store money in until you can meet the minimum balance for a savings account.
2. Participate in your job's 401k program: Most companies match your deposits. If they do, you should contribute as much as they will match. However, if you feel like you can't contribute that much, it is important to contribute something to your 401k. If not, you are missing out on free money.
3.Open a personal IRA: IRA's come in various forms (money market, certificate of deposit). However, they are easy to open and often times pay the same interest rates as certificates of deposit. As a result, during times like these when the market is shaky it may be beneficial to slightly adjust your 401k contributions and add some of this money to your personal IRA because you won't lose as much money. In addition, some IRA's are tax deductible. On the downside, once the market goes back up, you will still be earning about the same rate on your IRA and missing out on some of the growth that you would have received if it had been in place in your 401K.
4. Get a financial advisor early: Most people have the misconception that financial advisors are expensive. This is not the case. Most banks have financial advisors onboard that can offer you advice free of charge. You will only see a charge once you start investing and it typically comes from your returns and is not an upfront cost.
In short, save now regardless of how much you have to save. Always realize that the market itself will fluctuate but this should not deter you from putting money away.
How Do I Start Saving?
Given today's economy, we are all worried about whether or not to save. So, you may ask, what do I do? My answer is that you should always continue to save regardless of what is going on in the economy around you. However, you must be smart in what you are doing to make sure that you are not losing money. Regardless of whether you are holding a job or a student, it is important to start now. Did you know that if you save $4,000 for 30 years at a 5% interest rate, you would have approximately $279,000 saved? However, if you start 5 years later, you would only have $200,000. You would forfeit almost $59,000 worth of interest!!! A common question that many people ask is, how do I start saving? Here are a few tips to help get you started.
1. Start small: Open a savings account at the bank where you currently have a checking account. Banks will typically offer you a free savings account if you have a relationship with them so that you have time to build your balance. If not, open up a second checking account to store money in until you can meet the minimum balance for a savings account.
2. Participate in your job's 401k program: Most companies match your deposits. If they do, you should contribute as much as they will match. However, if you feel like you can't contribute that much, it is important to contribute something to your 401k. If not, you are missing out on free money.
3.Open a personal IRA: IRA's come in various forms (money market, certificate of deposit). However, they are easy to open and often times pay the same interest rates as certificates of deposit. As a result, during times like these when the market is shaky it may be beneficial to slightly adjust your 401k contributions and add some of this money to your personal IRA because you won't lose as much money. In addition, some IRA's are tax deductible. On the downside, once the market goes back up, you will still be earning about the same rate on your IRA and missing out on some of the growth that you would have received if it had been in place in your 401K.
4. Get a financial advisor early: Most people have the misconception that financial advisors are expensive. This is not the case. Most banks have financial advisors onboard that can offer you advice free of charge. You will only see a charge once you start investing and it typically comes from your returns and is not an upfront cost.
In short, save now regardless of how much you have to save. Always realize that the market itself will fluctuate but this should not deter you from putting money away.
Tuesday, November 25, 2008
TUESDAYS WITH MIRIAM: Tis the Season to Save Money
Chicole::Intermixed is pleased to introduce Tuesdays with Miriam. Miriam is an Assistant Manager at a national banking institution. Her weekly posts will help you prepare for the financial realities of education and life. Be sure to leave a comment or send an email if you have specific financial questions.
Tis the Season to Save Money!!!
The holidays do not have to be a time where you have to spend, spend, spend. Follow some of these simple tips to help save yourself some money while buying your loved ones gifts that they will treasure!
1. Start Planning Early – Start making a budget before you make it to the holidays. Think about how much money you will have and how much money you will be spending on required expenses, gifts, and holiday entertainment. By doing this you will know how much money you truly have available to spend during the holidays so that you don’t overspend.
2. Make lists, Decide how much you will spend, and don’t go over! – It is important to make a list of who you will buy gifts for, what you are going to purchase, and how much you will spend. Stick to this list! Don’t spend more than you have allocated for each person.
3. Look in multiple places – Don’t just go to the store and purchase a gift. Do some comparison shopping to make sure that you are getting the best deal. Also, the internet is an awesome place to find discounted prices, but it requires you to start looking early so that you make sure your gifts will arrive on time.
4. Avoid using credit cards as much as possible – If you have started to budget for holiday spending well in advance you shouldn’t have to use your credit cards. However, if you have to use a credit card follow these guidelines:
a. Pay off the balance ASAP – Don’t let the balance hang around until the holidays float
around again the next year. Remember if you use credit cards more than likely you have
to pay some interest on them.
b. Use a card with a low interest rate – Go through your credit cards and use the one with
the lowest interest rate. If you have to take awhile to pay the card off, it will save you
some money in interest.
c. Don’t sign up for or use store credit cards – While the stores may offer you discounts
for signing up for these cards, the interest rates are typically extremely high.
5. Open a savings account now - If you don’t already have a savings account open one now. Start by saving $10 a week and you will have approximately $500 saved up for holiday spending next year.
Tis the Season to Save Money!!!
The holidays do not have to be a time where you have to spend, spend, spend. Follow some of these simple tips to help save yourself some money while buying your loved ones gifts that they will treasure!
1. Start Planning Early – Start making a budget before you make it to the holidays. Think about how much money you will have and how much money you will be spending on required expenses, gifts, and holiday entertainment. By doing this you will know how much money you truly have available to spend during the holidays so that you don’t overspend.
2. Make lists, Decide how much you will spend, and don’t go over! – It is important to make a list of who you will buy gifts for, what you are going to purchase, and how much you will spend. Stick to this list! Don’t spend more than you have allocated for each person.
3. Look in multiple places – Don’t just go to the store and purchase a gift. Do some comparison shopping to make sure that you are getting the best deal. Also, the internet is an awesome place to find discounted prices, but it requires you to start looking early so that you make sure your gifts will arrive on time.
4. Avoid using credit cards as much as possible – If you have started to budget for holiday spending well in advance you shouldn’t have to use your credit cards. However, if you have to use a credit card follow these guidelines:
a. Pay off the balance ASAP – Don’t let the balance hang around until the holidays float
around again the next year. Remember if you use credit cards more than likely you have
to pay some interest on them.
b. Use a card with a low interest rate – Go through your credit cards and use the one with
the lowest interest rate. If you have to take awhile to pay the card off, it will save you
some money in interest.
c. Don’t sign up for or use store credit cards – While the stores may offer you discounts
for signing up for these cards, the interest rates are typically extremely high.
5. Open a savings account now - If you don’t already have a savings account open one now. Start by saving $10 a week and you will have approximately $500 saved up for holiday spending next year.
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