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Today I got my January issue of Woman’s Day” magazine. Informative as always, it contains plenty of important information. I would like to talk about one particular article: “Save $5,000 this year” by Mary Hunt.
Actually, she tells us things we already know, but when it is emphasized in a reputable magazine and not by your older relative, it really sounds reasonable. (In her article she uses 52 weeks as a base for the calculation, I’ll present you with a little different scenario - 50 weeks in some cases, and I’ll give you move leeways). Here is a short summary of ways to save, which each of us can easily follow, at least to a certain extent:
1. “Go on H2O Diet”.
“When eating out, don’t order soft drinks, ask for plain water”.
I would add to it: “Skip a latte, too, order plain coffee or tea”. If you save $10 a week, that’s $500 a year (take two weeks off for a vacation).
2. “Cut back on a few extras”.
Skip one movie a month (with pop corn, soda, etc.), trim back entertainment events such us concerts, sports, go out one time less a month. You should save at least a $100 a month, which is $1,000.00 a year.
3. “Save on Groceries”.
Buy store brand cereal, not name brand, the quality is so much improved, that some people prefer store brand. It will cost you at least 30% less, than a name brand. “If you choose the store brand just 10% of the time this year, expect to save $150.”
4. “Wait to have your hair done”.
Cut your hair every 5-6 weeks, not 4. You’ll have less appointments and spent less. You should be saving approx. $100 a year.
5. “Do your own nails”.
“…you’ll save at least $260 if you usually pay $20 and you have an appointment every 4 weeks. If you can’t face that possibility, cut your appointments in half. Savings: $130″. (This example is based on 52 weeks a year).
6. “Adjust your cable package”.
Call cable company, negotiate if you can, or threaten to cancel the service by going to the competitor, cut or trim to save at least $20 a month. It makes it $240 a year.
7. “Streamline your cell phone”.
Check your plan for the unnecessary add-ons. If you cut it $20 a month, it’s $240 a year.
8. “Shop for insurance plan”.
Shop around on the Internet for the auto and home policies with reputable companies. When you find a better one, call and inform your agent. If he can’t match it, switch the companies. If you save $100 on each policy, it’s $200 a year.
If you car is very old and the resale value is low, consider reducing a collision insurance (for damage), or even drop it. It may save you (very conservative estimate) about $200 a year.
“You can expect a reduction of about 20% when you increase your car insurance deductible from $500 to $1,000.” Saving of another $200.
9. “Refinance your car”.
My short version: You’ve got a loan of $30,000 with 12.5 per-cent for 60 months. If your car is less than 5 years and you owe more, than $7,500, you are usually eligible for refinancing. You are paying approx. $675/mo now. “One year later, if you refinance the26,201 balance at 6.9 per cent for 48 months remaining, your payment drops to $626. That’s a savings of $49 a month, or about $600 a year.”
10. “Refinance your student loans”.
Shop around. Reduce an interest or extend the time to pay it out. May save about $200 a year.
11. “Lock up your debit card”.
Don’t use your debit card too often, don’t overspend and don’t pay overdraft fees. Use cash more often. You can see and count it. You might save more than $200 a year.
12.”Get better interest on checking”.
Shop around for interest rates on checking accounts. “If you keep $2,000 in your checking on average, earn 3.5 per cent on it this year”, your savings is $70.
13. “Reduce credit card interest”.
Shop around for the rate reduction, especially if your credit score is over 720 points. Threaten to stop using the card; if that helps, you might get a break on the interest. “What is the difference in interest between 18 and 9 percent? On a $10,000 balance, a reduction of 5 percentage points over one year translates to $900.”
14. Cancel what you don’t use.
If you have a paid membership somewhere and don’t use it enough to justify it, cancel it. Make sure, there is no penalty.
The total of all points is still very close to $5,000.
You may spend some of it on the vacation, or buy an espresso machine and enjoy great coffee at home. Do your math yourself.
If you really think about saving, find 2 hours within next few weeks and: call the banks and insurance agencies, devise your own entertainment plan, whatever you need to get to your goal, and stick to it. If you make it thru first two months, you’ll develop a habit of checking with yourself on your spending, you’ll start noticing many usuful things and details. This action is a beginning of your future prosperity.
Your next year end will be much happier. But then you’ll be much different person, too.
Here is a little more from “Women’s Day” Magazine: an article
“Debt proof your holidays” as an early start to the next year of saving. Debt Proof Your Holidays
You may read my next paragraph now, or you may bookmark it and read it in two months, when things are not so hectic and you are on your way to a new, happier you.
Start new year by presenting yourself with a monthly gift: gift of your own responsibility.
The article published by “Motley Fool” describes how to start making money. (Even if you don’t have as much, as in the example supplied). Begin by investing in your 401K plan or find suitable reputable financial institution to start with smaller amount of money. Make sure you like the broker as a person, too, but don’t get too relaxed: you have a plan to follow. www.fool.com. Investing small
