1. Chop Up the Cards
Get rid of credit cards and pay cash. The high interest rates and other fees are money you spend for nothing in return, except having something you "just couldn't wait to have" that probably isn't that important anymore. When you pay the minimum payment on many credit cards, you can have 10 or more years' worth of payments and pay three to four times more for the item purchased than the original price tag showed. Get in the habit of putting off purchases until you save enough cash to buy them.
2. Buy Used Cars
When you buy a brand-new car, your car will likely lose 40 percent or more of its value within 2 years of leaving the sales lot. Instead, purchase a 2-year-old car with low mileage that may have a transferable warranty to provide some coverage against mechanical problems. Let someone else take the financial hit of purchasing a brand-new car.
Never roll the unpaid loan balance of one car onto another when buying a new vehicle. This immediately puts you in the position of owning a vehicle worth less than the balance of the loan. If at all possible, pay cash for your vehicles, even if you can only afford an older car. Save the payments you would have made on the car, and use those payments to increase the cash reserves you have for your next car.
3. Save on Utilities
Find ways to save money on utilities every month. An easy way to do this is by outfitting all of the lights in your house with fluorescent lightbulbs. You can also install a programmable thermostat to control the heat and air better when you are away from home during the day and when you sleep at night. In addition, low-flow showerheads in your bathrooms can cut down on the amount of water you use. Some of these showerheads have high water pressure, but they use 50 percent less water than traditional showerheads. Finally, contact the city to ask about installing separate water meters for the interior and exterior of your home. You may be able to pay one price for sewer usage in the house and a lesser price for the water used outside.
4. Eat at Home
Eating at restaurants is expensive, even if you eat at "cheap" fast-food places. Although cooking at home takes time, you don't lose much time compared with waiting in line, driving to the restaurant and waiting for food to be cooked. If you must eat out, you can save money by ordering water with your meal instead of expensive drinks. Not only will you save the price of the drink, but you'll also pay less for tax and tip.
5. Pay Your Bills on Time
Always pay your bills on time. Late fees, which can run as high as $30 or more, add up quickly, increasing your overall bill. If you're having trouble paying your monthly bills, contact your creditors immediately to work out an alternative payment plan. Paying your bills on time has additional money-saving benefits: when you apply for loans, your consistent repayment history will result in lower interest rates and higher lines of credit.
Member Comments