Best Money Saving Tips
We all know that the best way to have more money in your wallet is to stop money from leaking out in the first place. Cutting out many of the little things we buy can give you large returns:
- Cutting out two Starbucks coffees a week will net you $300 a year.
- Packing your lunch once a week instead of buying it will save $400 a year.
- Sticking to the perimeter of the grocery store (meats, dairy, produce, bread) rather than the aisles (prepared foods) can save you 50%, or up to $4000 a year.
But letís be honest: saving like this, while it can be substantial, is inconvenient. If you donít buy spaghetti sauce you have to make it. If you donít pay to have your pants hemmed, you have to do it yourself (and suffer the consequences, in my case).
While these ideas are still worth trying if you have the time, there are other, easier ways to save $400, $500, or even $1000: focus on your big ticket items. Think of your spending like a pyramid: look at the things that cost you the most, and see if you can save a little bit there. Saving 10% on these can be as lucrative as saving 75% on groceries or entertainment, and best of all is often no more inconvenient. Hereís how:
- Pay your mortgage biweekly instead of monthly. Your payments are the same, but youíll cut years off your mortgage. Potential Savings: $14,833 and three years on a $100,000 mortgage at 7%.
- Drive your car for one extra year. Potential Savings: $400 a year.
- Buy the simplest appliance that meets your familyís needs. If you donít wash delicates, choose a washing machine without the delicate cycle. If youíre happy with ice cube trays, donít pay $300 extra for a fridge with an icemaker. Potential savings: $100-$600 per appliance.
- Pay attention to the EnergyGuide rating on appliances. Saving $50 a year over the 20-year life of a fridge is $1000 in savings, often for little difference in purchase price. Potential Savings: $20-$100 a year per appliance.
- Buy a programmable thermostat that turns the heat and air conditioning down when you donít need it. Potential Savings: $400.
- Buy term insurance rather than whole life insurance. For non-smokers, itís usually relatively inexpensive, and you can afford higher coverage now when your children are young. Potential Savings: Talk to your insurance broker.
- Consider higher deductibles on home and auto insurance. Potential Savings: up to 30%.
- Clean out your dryer filter, furnace, air conditioner, and water heater once a year to make sure theyíre working at maximum efficiency. Potential Savings: 10-20% a year on operating costs.
- Donít carry credit card debt. Consider asking your bank for a consolidation loan instead. Potential savings: $5,000 on a $10,000 debt over 5 years.
- Use cash instead of debit cards or credit cards. Youíre more likely to spend shrewdly, you accrue fewer bank fees, and you pay less interest on credit cards. Potential Savings: the skyís the limit!