10 Strategies to Save Money

MSN Money recently posted an article on 10 strategies to save money; truth be told, it was one of the better ones I had seen in a while. Among their tips are:

1. Kick-Start Your Savings Plan. This can be difficult, but having a savings (however small) to fall back on in difficult times can prevent taking high-interest loans in an emergency, saving you potentially thousands in interest each year.

2. Shop Around for Insurance. This is important; don't assume that since you've been with the same company for five years that you are getting the best discount. Also, be sure to investigate ALL discounts for which you may be eligible through your current insurance provider.

3. Adjust Your Tax Withholding. This I hadn't honestly thought about, though it does make sense. If you come out even (or close to) each tax season--meaning you don't owe taxes and you aren't expecting a return--you are keeping your money in your pocket (and your bank), where it can earn you interest.

4. Pay with Cash Instead of a Credit Card. This is huge, because you will pay interest on all purchases made with a credit card, while cash is always interest free. That said, there all always better options if you choose to use a credit card, which can even benefit you financially in the end.

5. Turn Daily Habits into Treats. This was big for me, when I stopped spending $4 a day on coffee from Starbuck's, and instead  visited maybe once or twice a month, I found I was saving at least $20 a week--a savings of about $1,000 a year.

6. Boost Your 401(k) Contributions. Paying tax on your contributions now (as with Roth IRAs) can save you a lot in the long run. Just think of what the tax rate will likely be in 10, 20, 30, or 40 years when you reach retirement age!

7. Make Savings Automatic. This is a biggie for me and my husband; we have $20 each month automatically transferred from our checking account to our savings account. While it is minimal, it is still earning interest in savings and adding to what we have saved up for emergencies or a rainy day.

8. Take Care of Yourself. Love this one! I'm a big proponent of wellness checkups and dental cleanings, both of which are often free under health and dental insurance (as they are considered preventative care). Even if you have a co-pay, a $25 or $30 doctor's visit is far better each year than a $15,000 stay in an emergency room for a problem that went undiagnosed. These preventative appointments also help keep premiums down for your employer (if that is where your insurance originated), the savings of which can then be passed on to you and your co-workers.

9. Raise the Deductible on Your Insurance. I'd say to be wise about this one, and do what is right for your particular financial situation. While having a higher deductible on your insurance will lower your monthly premium, it also means that you pay more for an accident. In my case, where I know my savings is small, I'd rather have a $250 deductible (which would be easier for my meager savings to handle) than a $500 or $1,000 deductible, even if it means I spend an extra $10 each month.

10. Change Your Lightbulbs. CFLs (Compact Fluorescent Lights) pack a punch in terms of energy savings. And now is a wise time to start switching over; with regular bulbs being phased out in the next couple of years, they will become unavailable, and many retailers are offering low prices (as low as $1 a bulb in some cases, like Excel energy has done in my area) to entice consumers to make the switch. Also, since a CFL can save you $50 in energy costs over its lifetime,  you could be looking at a savings of $1,500 or more (over the next year or two) when you make the CFL switch.

You can read the full article and view the slideshow here.

8 Ways to Save Money on Credit Cards

I've always followed the adage that if you need to pay for it with a credit card, you don't need it. (This was after I managed to dig myself into a credit hole during college. I've since wizened up.) That said, there are ways to use credit cards to your monetary benefit. Here are a few tips on how to save money (and even gain a bit of that money back, as well as other perks) if you choose to use credit cards:

1. Shop around. In order to get the best rate, the best rewards program, in short, the best card for you, shop around to sites like bankrate.com or creditorweb.com. MSN's Money Central also has a list of the credit cards with the best rates. Simply returning a pre-approval you received in the mail without doing any comparison shopping is not the best way to make your card work for you.
2. Look for no-fee credit cards.  You can often save between $25 and $50 a year by using a card that does not charge an annual fee. Be sure that the other terms and conditions are worth it, however; it would make no sense to have a card with a higher interest rate (that may end up costing you an extra $25 or $50 a month, or more) or shorter grace period just to save $25 a year.
3. Read the terms. Never sign anything, credit card applications included, without reading the fine print. Most credit cards do not include terms longer than a page, and since this is where every nitty gritty detail of how and when you will be charged is spelled out, well worth your time to read.
4. Negotiate the rate. Once you've been a good customer (read: no missed or late payments) for a few months, contact your creditor. Most will work with  you, potentially saving a point or two on your interest, which can spell big bucks in the long run.
5. Make payments on time. This is HUGE. Even one late payment can cause your interest rate to skyrocket (again, this is where reading and understanding the card's terms comes in handy). In your terms it will be detailed when payments are due, what your grace period is, and how much your interest rate can be affected by late or missed payments. Be sure to schedule payments or mail them in plenty of time, because credit card companies simply don't care if your payment was held up by the post office. Late is late (and missed is missed). It will also be noted on your credit report, making future lines of credit more difficult (and costly) to get.
6. Pay off higher interest cards first. If you have more than one credit card, pay as much as you can toward the one with the highest interest rate while making the minimum payment to the others.  Once the card with the highest rate has been paid off, do the same to the card with the next-highest interest rate, and so on. 
7. Pay your balance in full each month. Though most of us carry credit cards as insurance, a "just in case" solution, it is best to pay your balance in full each month. The interest charged on credit cards is higher than just about any other type of loan. If you know you will be making a large purchase, consider taking out a bank loan instead of charging it on your credit card.
8. Use rewards to your advantage. Rewards, well, reward you for using a particular card. Frequent flyer miles and cash back are two common rewards, and can be quite nice if you use the card correctly. First, scout out the card with the rewards programs that fits your needs (for example, if you rarely travel, frequent flyer miles most likely won't entice you). Second, understand that credit cards with rewards programs often have a higher interest rate than other cards (to offset the cost to the company of the rewards you are getting). Third, you might want to have a second credit card with a lower interest rate (and no rewards program) for larger purchases that you will not be able to pay off at the end of the month. That said, If you pay your balance in full at the end of each month and charge a lot, getting some of your hard-earned money back through rewards is a great boon. Cardweb.com is a great resource for researching cash-back cards.

Choosing to use credit cards is a personal choice, but one that many of us make at some point in our lives. Using credit cards wisely can help you save money on what are traditionally high-interest and expensive.