Our current finance situation in today’s economy is pretty much a huge mess. Back in the day (around when I was a kid) you used to get 6% bank interest on CD’s, bank certificate of deposit accounts. Putting your money into bank CD’s isn’t the best investment when it comes to returns, but they are definitely the safest, as opposed to investing in stocks or mutual funds. If you need to take the money out, you always have that option. Sometimes there is a small penalty, but you really don’t lose anything more than a few month’s interest. So let’s say you had 10 grand to deposit, that was $600 in your pocket just to let them hold your money for a year. Today the best you’re going to be able to find for a 1 year CD is probably 1.5%. That’s $150. Big difference… really good incentive to save your money. No wonder why so many people are in debt! You’re almost better off putting your money into a jar, or spending it all. So much for letting your money “work for you” through bank interest dividends anymore.
At the moment, mortgage interest rates are at an all time low. Once these start to rise again, CD rates will start to climb back up. The other day I saw some in the low 4′s and even high 3′s. This is definitely a time homeowners might even want to consider refinancing, as it just might save you anywhere from $150-300 a month. There are 360 months in your typical mortgage period of 30 years. That’s anywhere from a $54,000 – $108,000 savings over that time period. Real estate prices, and values, seem to have plummeted as well, as compared to 3-4 years ago. This is definitely the time to get out of your apartment or rent and get into your own place, seeing that you might even be able to find a nicer place at the same or lesser cost than you are currently paying. This wouldn’t be the time to sell your property, unless you absolutely needed to. Even still, lateral moves are almost always possible when strategically planned.
No doubt, these are tough times we are facing. This recession doesn’t make things any easier on any of us, regardless of our background or economic situation. All we can do is try and be smart. Think twice before you spend. Make more out of less. Try and decide between your needs and your wants. Find simple alternatives to cut down on your monthly bills. Be green and take simple steps to lower your energy costs. Try to avoid living week to week, paycheck to paycheck by making the most of your earnings.
Here are a few tips to stop the bleeding of your income that you might not have previously heard or even considered:
- Cancel your cable, use a $40 digital converted box to receive free 1080p HD programming, or simply watch full episodes of your favorite tv shows online. Or, stick to basic cable if you cannot receive good over the air signal where you live.
- Instead of having an expensive home phone bundle, stick to only your cell phone.
- Leave your curtains and blinds open during the daytime to let in the sunlight during the colder months. The amount of free heat the sun radiates through your window panes is huge.
- Make sure your windows and doors are properly caulked and sealed to stop drafts.
- Set your electric water heater on a timer, so that it doesn’t keep running during the times you aren’t home or available to use the hot water.
- Change out all of your standard light bulbs for compact fluorescent bulbs. There are even dimmable CF bulbs now, for all of you hopeless romantics!
- Why rent movies or subscribe to a movie service when you can go to your local library and take out movies and tv shows for free? Or, as earlier stated, just watch them online.
- Avoid the temptation to charge things on your credit card that you don’t already have the cash for. Viewing your credit card like it is cash, and paying it off monthly, will keep you out of a lot of trouble (and a lot of debt). This is huge. Don’t even let yourself thing that because you have a credit card, that you have money. You don’t. Think about your credit card like it is a debit card, and that the money is instant coming out of your account when you swipe.
- Try and avoid carrying around a debit card, if you have a problem of using it a lot. Take out cash weekly, instead, to limit your spending.
- Switch to generic brand store foods, products and prescriptions. You may be pleasantly surprised that the quality is almost always the same, if not better.
- Never buy anything on impulse. Be a smart consumer. Research prices and quality reviews before you make any purchase (especially on larger ticket items).
- Set your washing machine on short cycle, and only use cold water. Dry your clothes in the dryer one load after the other. The dryer stays warm and works more efficiently. Also make sure you don’t over-dry, because this is one of the most energy sucking appliances you own.
- Run your dishwasher on the light cycle, as to save water and energy.
- Consider upgrading to energy efficient products like refrigerators, doors, even newer windows
- Add extra layers of insulation in your attic. There are even tax write offs and deductions for these types of home improvements.
- Simple things like turning off lights and turning off the TV when you leave the room can add up to a huge monthly electricity savings
- Now that electricity is de-regulated in certain areas, you may be able to save on your monthly bill by switching energy providers
- Call around for the best prices on fuel oil for heating your home, and buy when you notice that gas prices are presently low. Sometimes you’re better off buying it in the middle of the summer, when you might not even need the oil.
- Instead of buying bottled water, filter your own and use reusable stainless surgical steel containers that are safer for your health, such as Kleen Kanteens.
- Don’t buy lunch more than once a week, or at all if you can. You’ll not only cut calories but you will also save tons of dough. Brewing your own coffee is also another thing you can save hundreds of dollars are year on. Yes, hundreds. Water is free, and a can of coffee for $2 on sale will brew enough for probably 2-4 weeks (depending on your intake). Its quicker and easier to make it yourself than to wait in line at a drive through.
- Limit yourself on things like eating dinner our, shows, concerts, movies, and travel. These are easy ways to drop a lot of cash and quickly. Don’t cut these things off completely – we all need to enjoy ourselves once in a while, but be more selective about what you spend on. Make sure you’re getting the most bang for your buck. Splurge on something more extravagant occasionally; not daily or weekly.
- Can you live without a data plan or texting package on your cell phone? I personally have a job where I’m in front of a computer at least 8-10 hours a day, so to me, paying for these types of things are just not worth the extra $40/month.
Some of these tips might be a little extreme for you. Not everyone can live without cable tv, or their subscription to netflix. A lot of these things are SMALL changes. Little things that might seem penny pinchingly cheap and tite-woddish. It’s all simple math, though. If you know how to add and subtract, you can properly budget, and save way more money than you might think you could. Make a chart or a spreadsheet and add up your actual monthly expenses. It takes just 15 minutes of your time. In the long run, these savings of $10 here and $5 there add up to thousands, even tens of thousands of dollars. You don’t have to feel like you are neglecting or depriving yourself of anything, either. In the long run, even if you put just a few of these tips into practice in your life, to some degree, you will definitely be glad you did. There is an old saying, “If you want what you have, then you’ll have what you want.” Ask yourself, “Do I really need this?” before buying anything. If you live within your means, then you’ll have the means to live.
Have any more tips I might have left out? Feel free to comment below.
