All of us think from time to time that we’ll just never get out from under our money issues. We look at our 30 year mortgages and see that we still owe thousands and thousands, our car payments never seem to end, and every month we may struggle to stay “in the black” because of habits we developed years ago of buying with credit or impulse buying. But there are a huge number of simple ways to save money in the short and long term.
Here, listed for your consideration, are just a few ways to save money that are simple, relatively painless, and actually work.
- Paying off debt
Ok, you can’t pay off overnight what may have taken months and years to accumulate. But you can start moving in the right direction right now. Since the 2008 recession, savings have plummeted and the use of credit cards has soared. Credit cards give the gift that keeps on giving (and that no one wants): interest! Buy things with your budget in mind (and yes, you must have a budget), so that you can avoid extending credit card balances with interest payments. I only use my credit card when I can pay it off in full at month’s end. In the meantime, you can research credit cards to find better interest rates and possibly transfer your existing balances without a fee.
Mortgages can be paid off quicker when you start adding as little as $25 extra per month towards the principal. Years and thousands of dollars can be saved the more you can apply.
- Buy with cash
Buying with cash can help stop your impulse buying and make you pause to reflect on the purchase and plan purchases better. You can even save the change you get and you’ll be shocked at the totals you accumulate in just a month or two.
A windfall can be an insurance settlement, a bonus at work, a gift from friends or relatives, a tax refund, or even a raise in pay. Always take a portion of that windfall and save it. It can be a real security blanket during tough times and if it was unanticipated, why just blow it quickly and be right back in that same money hole you were in previously? A pay raise can be automatically be transferred into a savings account and you’ll never even miss it.
- Save first, spend later
When it comes to a major purchase, when possible, plan ahead to save and buy when you already have the money. If done that way, you avoid a major outlay at one time, and that will prevent you from carrying a credit card balance with interest. It also gives you time to really think about and research your purchase. That vacation you’re dreaming of next year can be completely paid for by socking away 52 payments before you go.
Insurance: This one is so simple and easy and yet so many of us are just too lazy to do. First rule of thumb is to look at your current costs and compare to competitors every time your policy is up for renewal. The industry is killing itself with advertising trying to get you, and you would be shocked to find the differences in costs from company to company.
Gas hog: Consider a car that can save you fuel and the costs associated with it. Do you need a 4 wheel drive or a convertible? Can you ride a bike, walk, or use public transportation more frequently? After all, it’s transportation, isn’t it?
- Control your home environment
According to the U.S. Department of Energy, lowering your thermostat in winter and raising it in summer by an extra degree can save you 1% of your energy costs per month. Guidelines are 68 degrees in winter (or lower when you’re away or asleep) and 78 degrees in summer. Investing in a programmable thermostat can help make the adjustments automatic. You may need a sweater or a blanket during the winter, but it may help you pay for a nice tropical vacation next year.
- Cut your small, frequent expenses
Morning coffee at your favorite shop? Doughnut or bagel and coffee at the convenience store? Skip those and brown bag it from home. The money you will save is astounding since the cost of those treats are about $4-8 a day, a conservative estimate will save you about $1,000 per year. Throw in lunches and that is probably another $1,000 at least. In a week, you’ll have enough saved to buy a travel mug to keep your coffee hot and ready for your morning commute. Some experts say not to bother with the small expenses and focus on where you can make large gains, but there’s no reason you can’t do both and reach your goals faster.
- Cheap entertainment
A ballgame, dinner and a movie, a concert at the stadium? Do you like spending $75-$250 for a few hours of entertainment? If you have a family, double or triple that cost. If that’s your regular form of entertainment, think about the cost of those compared to free or low cost alternatives. How about going to the local museums, art galleries, historical sites, free concerts in the park or township celebrations? You can get free, reduced, or even donation admissions to most local events and spend that time educating and entertainment yourself and your family. You can attend minor league baseball games for about one third of the cost of the big leagues, and see the stars of tomorrow. We recently attended a concert with pop acts from the sixties (which I idolized back then) for free!
This list can go on and on…after all, we really spend mostly on wants and not on needs, don’t we? I’d like to think that the time I used to spend worrying and complaining about the cost of things is much better spent with planning and enjoying each day.
What is your favorite way to save money?