May 11, 2013

8 Ways to Save Money Now

One of the biggest indicators on whether or not an investor will reach their long-term goals is the % of gross income they save for retirement and short-term goals.  The list that follows includes a few ideas that may help you free up space in your budget to put more money toward your savings goals.

1. Keep a Lid on Food Costs

This one seems to break most budgets, including mine.  There's no question going out to dinner from time to time is a good idea.  My wife and I both started our vacation yesterday, and we decided to celebrate by going out for a nice dinner.  $70 was well worth it.  The rest of the time we do a pretty good job of keeping our food costs manageable, despite living in an area where food costs 25% more than the rest of the US.  Costco, having our own garden, and preparing breakfast, lunch, and dinner at home 85% of the time is what does it for us.  Sometimes we're too zonked from work to cook it up, so we'll do an affordable take out from one of our favorite local eateries (I love Thai Food)!  Then there's the occasional special occasion, and I just leave the budget thoughts at home.  But for the most part, these are no-brainers that can help you save some serious dough!

2. Change Your Cell Phone Plan

I've been debating moving my cell phone plan to straight talk wireless as they have featured a great promotion recently.  $30/month for unlimited talk and text for "dumb" phones (I have a dumb phone).  They also have a $45/month unlimited data/text/talk plan.  The caveat is you need to purchase the phone, but if you do the math, a couple sharing a plan can begin saving $60 or more/month by making the switch.  My wife and I use Verizon, and even after a 20% discount through my company, we still pay $125.  This could be $75 if we switched, a $50/month savings, or $600/year! 

3. Eliminate Consumer Debt

Get rid of it.  Start now.  See my post on eliminating debt.

4. Opt for Public School

I know, I know.  You want to give your kids the best opportunity to get into a good college, and learn skills needed to succeed in the workplace and not be "held back" by less than stellar classmates.  Unfortunately, in most cases what ends up happening is parents mortgage their homes and retirement in order to do this, only to find that the level of education in private schools is actually quite comparable to public schools.  I feel that kids actually benefit from being exposed to children who are different from them, and are able to better communicate and relate to others later on by having to interact with students from all income levels.  Look into it.  I went to public school through high school, then a private university and ended up graduating in the top 5% of my class.  Many of the students I met in college from private high schools and elementary schools struggled to relate well to others.

5. Be Creative With Family Time

Find new ways to enjoy time with your family.  I know life is hectic, sometimes that sacred time between 5pm and 9pm is best spent relaxing on the couch, taking the family out to a movie or sporting event, or going out for an expensive meal, but cheaper and more enjoyable options are out there!  How about fishing at the local lake or stream, barbequing in the backyard, or going for a walk together at your nearest park?  Take a look around your community, you may find a fun (and free) activity for your family.

6. Refinance Your Mortgage

At the current rate of approximately 3.6% APR, payments per each $100,000 owed are only $442.  This is a historic low, and if you are one of the few that has not yet refinanced your mortgage, or maybe you didn't qualify until now due to income levels dropping during the recession, now is an ideal time to lower your monthly payments.  If your balanced owed is less than $125,000, however, it may be best to leave "as-is" due to the closing costs often involved with a new mortgage.

7. Move Your IRA to Vanguard

Using Index Funds to earn the market average will put you ahead of 85% of other investors.  Take this a step further by investing with Vanguard, which boast the lowest fee to manage your money.  They charge roughly 0.15% of the total value of your investments, while as John Bogle shares in this video, other fund companies charge as much as 2%...or more!

8. Give to Charities or Tithe

Nothing will shift your family's spending habits more than supporting a worthy cause, such as your church or a non-profit.  The act of giving greatly reduces our need to constantly consume, and can ultimately lead to an increased savings rate.  When we are passionate about helping others (and ourselves) by donating our financial resources, I've found that things like video games, designer clothes, and expensive meals become less desirable, not to mention the added benefit of REMEMBERING how fortunate we are.  One charity that we really love is the Free Wheelchair Mission.  I know they'll possibly rank higher on Google from my adding their link to my site, so there it is!

By no means is this a comprehensive list, but if you take a moment to analyze each of these areas in your own life, you will find ways to save more money.

Take care,


1 comment:

  1. Sweet post, thanks for sharing! Another good one is to avoid going to the mall...I always seem to blow a couple hundred bucks on dumb buys.