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.
