The Easiest Ways You Can Save Money and Pay Off Debt
These days, just about everybody is looking for easy ways to save money. Even saving a few dollars a week on things you do everyday can add up quickly. In fact, that is where the majority of people can painlessly save enough money to make a real difference in their financial picture.
To save money, you need both commitment and a plan . Start by looking at your largest expenses, typically those are transportation and housing related, although in some cases health care costs or debt service can settle in one of the top spots. The first step to saving money is to figure out where you’re actually spending it. To do this, you’ll have to make a budget. That’s no great way to spend a saturday afternoon, but it’s got to be done.
Start at housing expenses . If you’re a renter , investigate the possibility of moving to a less expensive location, or, if you have the space, take in a sub-renter. Take a look at all the other expenses associated with housing, such as utilities, taxes, and insurance, too .
Many people save a ton of cash by changing TV service, for example. Not only can you switch providers, such as exchanging cable for DirecTV or Dish Network , but you can often negotiate a deal with your provider by simply asking them . It’s true! In many cases you can save about 50% by simply asking them, or informing them that you’ll be taking your business elsewhere to take advantage of this or that special offer from a competitor.
One of the largest expenditures in many hot and cold weather states is for heating and A/C. You can help lower those by simply going around your home and finding any place where there is an air leak. Even if you simply go to the local home store and pick up a few cans of caulk and a couple rolls of weatherstripping, the effects can be major. For example, if you have only a 1/8” gap under a 36 inch wide door, that’s equivalent to having a 2 in square hole in your door. You would let that go unimpaired, would you? Of course not, and it is a major energy waster. Fixing such problems are an easy way to save money.
If you’ve ever looked at your energy bills, you’ll note that in the colder winter months and the hot summer months (if you have A/C) your electric and gas bills go up substantially . You can ease the shock of this quite a bit. Set your thermostats back in the winter and up in the summer. Adjusting the temperature set points on your thermostat to 64 in the winter and 76 in the summer can save you substantial money over keeping it at 68 or 70 year round, depending on where you live.
Take a look at your appliances. Have they been around since D-Day? You can replace them with something newer and much more energy efficient, and save big bucks, not only on your bill, but possibly on the purchase price as well. Many states have programs that can get you substantial rebates to offset the cost of new, energy efficient appliances. These will lower your utility bills, and pay for themselves in short order. The largest energy users are refigerators, water heaters, dishwashers, and clothes dryers, so these will obviously be the best ones to replace with energy efficient units.
One place may people pay out large amounts each and every month is consumer debt service . A recent survey revealed that the average American family had $25,000 in consumer debt, mostly in the form of credit cards and car loans . Just servicing the debt can take a huge bite out of your finances every month. The interest payment alone on $25,000 in debt, assuming only 12% interest (the average credit card interest rate is much higher, currently around 16%) is around $250, before any principle is paid. In addition, most credit card companies currently determine their minimum payment based upon 4% of the total outstanding balance, so you’d be paying a hefty $1,000 payment of the $25,000 was all credit card debt.
A great way to save money is to get the high interest credit cards transferred to lower interest cards or personal loans. It is better to eliminate credit card debt entirely, of course. The most common way to do that is using a debt consolidation loan, but while that can be effective, it can also be fraught with peril .
The reason lenders can give you lower interest rates and more attractive terms on debt consiolidations loans is that they are secured loans. They are backed by some collateral you have pledged that the lender can have should you fail to repay the loan as you agreed to . A secured loan represents lower risk for the lender, so they can offer a lower interest rate, and thus a lower payment, to the borrower. Unfortunately, the collateral used in these loans is typically the borrower’s residence. If the borrower fails to pay as agreed, the lender can take their home. So, although a debt consolidation loan can save money, it is definitely not without risk.
Another place may people can save money is on their transportation expenses . The first place to look is at the vehicle itself . Is it draining you emotionally and financially every month? This can easily be the case with either a newer or older vehicle. Used vehicles are typically less expensive to purchase and insure, but can clobber you with ongoing maintenance costs. Newer vehicles, on the other hand, may substantially lower maintenance costs, but cost much more in depreciation, debt service, insurance, licensing, and the cost of the vehicle itself.
Regularly maintain your vehicle, for although this may be fairly expensive, it is no place to try and save money . Modern vehicles are very dependable, but they are also incredibly expensive to repair. Regular maintenance is essential to protect yourself against a sudden repair bill. Typically, your warranty is contingent upon regular maintenance. If you fail to perform the regularly scheduled maintenance, the warranty can be void .
In addition to the vehicle itself, examine your car insurance policy . Are you taking advantage of all the discounts to which you are entitled? Most insurance companies will offer you discounts for such things as insuring multiple vehicles with them, insuring your home, business, and car, or completing a defensive driving course. You should also shop around and compare car insurance rates from different insurance companies. Different companies assess risk factors, such as vehicle type, distance driven daily, driving record, area of residence, and so on, differently. They have different areas of specialization, so your situation may be priced lower by a different company.
There is one area that affects everyone. Saving money on your mortgage doesn’t work if you don’t own a home, and discovering how to save money on your credit card bills doesn’t do you much good if you have no credit card debt. The one thing that everyone has to buy, and one place that affords everyone an opportunity for savings is food. That’s right, everyone has to eat. Thankfully there are some great strategies that can save you a fortune on your food bill every month. Here are some tips that can really put cash back in your wallet. Consider eschewing the big name grocery stores such as Safeway, Albertson’s , Von’s, A&P, and Kroeger. Instead, shop at one of the many warehouse food stores throughout the country. You’ll find just about all the same brands you’re used to buying at the big name chain grocers, but you’ll pay anywhere form 30% to 60% less for the exact same items. Somehting elese you can do is switch to store brands or generic type products. In many cases it is the exact same food as the big name products, only in a different package at a 20% – 50% savings.
We often take it for granted that larger sizes are less expensive on a per unit basis. While in many cases this is true, it is not true all the time. When it is not, you buy more than you need, and pay too much for each ounce / gram / pound / kilo/ quart or liter of it. The next time you’re about to purchase the jumbo sized container , take the time to look at the tag and see what the price per unit is. You may be surprised .
These are just some easy ways to save money every month. If you take advantage of all of them, you’ll save more money than you expect. In many cases it will be enough to completely turn your financial situation around !