- Keep track of your spending. At least once a month, use credit
card, checking, and other records to review what you've purchased.
- Never purchase expensive items on impulse. Think over each
expensive purchase for at least 24 hours.
- Pay with a debit card rather than a credit card. You cannot use a
debit card (unless it has an overdraft feature) to spend money you
do not have. Using a debit card may also prevent you from annually
incurring hundreds of dollars in credit card interest charges.
- Substitute coffee for expensive coffee drinks. The $2 a day you
could well save by buying a coffee rather than a cappucino or latte
would allow you, over the course of a year, to completely fund a
$500 emergency fund.
- Bring lunch to work. If buying lunch at work costs $5, but making
lunch at home costs only $2.50, then in a year, you could afford to
create a $500 emergency fund and still have money left over.
- Eat out one fewer time each month. If it costs you $25 to eat
out, but only $5 to eat in, then the $20 you save each month allows
you to almost completely fund a $500 emergency savings account
- Shop for food with a list and stick to it. People who do food
shopping with a list, and buy little else, spend much less money
than those who decide what to buy when they get to the food market.
The annual savings could easily be hundreds of dollars.
- Do not bounce any checks, you will save $20-30 per check.
- Reduce credit card debt by $1,000. That $1,000 debt reduction
will probably save you $150-200 a year, and much more if you're
paying penalty rates of 20-30%.
- Make your monthly credit card payment on time. The $30-35 you
save by not being charged a late fee each month on one card could
add up to $400 per year.
- Use only the ATMs of your credit union network. $3 per withdrawal
adds up fast.
- Shop around for auto and homeowners' insurance: Before renewing
your existing policies each year, check out the rates of competing
companies (see the website of your state insurance department).
Their annual premiums may well be several hundred dollars lower.
- Raise the deductibles on auto and homeowners' insurance: Being
willing to pay $500-1,000 on a claim, rather than only $100-250, can
reduce annual premiums by as much as several hundred dollars.
- Keep your car engine tuned and its tires inflated to their proper
pressure. Doing both can save you up to $100 a year in gas.
- When driving, avoid fast start-ups and stops. Over time, you will
save hundreds of dollars on lower gas and maintenance costs.
- Consider refinancing your mortgage to lower the rate and term. On
a 15-year $100,000 fixed-rate mortgage, lowering the rate from 7% to
6.5% can save you more than $5,000 in interest charges over the life
of the loan. For each $100,000 you borrow at a 7% rate, you will pay
over $75,000 less in interest on a 15-year than a 30-year fixed rate
mortgage. And, you will accumulate home equity more rapidly.
- Use window coverings to block or let in sunshine. In summer, use
these coverings to block sunlight, keeping your house cool. In
winter, open the coverings to let sunshine warm the house. You could
easily save more than $100 annually while being more comfortable.
- Assess your communications costs. As Internet and wireless use
grows, many consumers are overpaying for unneeded communications
capacity. For example, if you have a cell phone and two phone lines
-- one for your computer -- consider receiving personal calls on
your cell phone so you can give up one of the phone lines.
- Be aware of your cell phone costs and how to reduce them. Cell
phone use has dramatically increased communications expenditures in
many households. Understand peak calling periods, area coverage,
roaming, and termination charges. Make sure your calling plan
matches the pattern of calls you typically make
- Dial phone calls directly without an operator. Using an operator
to place calls can cost you up to $10 extra per call. That could
easily save you more than $100 a year.
- Research free or inexpensive entertainment in your community. Use
local newspapers and websites to learn about free or low-cost parks,
museums, film showings, sports events, and other places which you
and your family would enjoy.
- Give up premium cable channels. It's a lot cheaper to rent one
film a week than watch one on premium cable channels that may cost
more than $500 a year.
- Borrow books rather than purchasing them. Borrowing books and
reading magazines at your local library, rather than purchasing
reading material, can save you hundreds of dollars a year.
- Plan gift-giving well in advance. That will give you time to
decide on the most thoughtful gifts, which usually are not the most
expensive ones. And if these gifts are products that must be
purchased, you will have the opportunity to look for sales.
- In families, discuss limits on spending for gifts. These limits
not only tend to reduce expenditures; they also be greatly
appreciated by the least affluent family members.
- Socialize at pot-luck meals rather than at restaurants. Because
one wants to be generous to friends and family, there may be huge
cost savings here.
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