Five Tips on How to Save Money
By Steve Gillman
I wrote a book full of tips on how to spend less money, (Money
Saving Secrets) with close to 500 ways to save on almost
everything from car repairs to groceries to weddings. There are
all sorts of little tricks for paying less for the things you
buy. But knowing a few of the most basic strategies is more important
than specific ways to spend less on this or that item. Five of
1. Eliminate Unnecessary Expenses
We all have things that we really don't use. Some of these
things may not cost us anything to keep around, or at least it
may seem that way. On the other hand, suppose you could comfortably
live in a smaller house that cost $30,000 less than your current
one - except that you need the space for all the things you rarely
use. With a 30-year 7% mortgage that extra space will costs you
almost $72,000. Is it worth that much to keep those things around?
Then there are the things that have more direct ongoing costs.
Even if you owe nothing on an unused motorcycle or snowmobile,
they still require insurance and licensing. Subscriptions cost
money whether you read those magazines or not. Look at what you
really use and what is unnecessary. Get rid of the latter. You
lose nothing eliminating these kinds of expenses.
Avoid making the same mistakes again in this area too. We
often buy things without honesty assessing how often we'll use
them, and without considering the future expenses they create.
Buying a fish tank and a few fish, for example, can add up to
more ongoing costs than you might have thought. Fish food, cleaning
supplies, and occasional replacement of parts are some of the
expenses this "one time" purchase adds to your life.
Buy it if you will really enjoy it, but be sure you know what
the real costs are and have decided that they're worth it.
2. Look First at the Big Expenses
It doesn't hurt to find ways to buy a cheaper pair of socks
or less expensive dog food. But start your efforts to spend less
with the large expenditures first. You might spend an extra hour
finding a great deal on a car, and save $2,000. That's more than
you'll save with years of coupon clipping for groceries. So start
big and then combine that with the next of these tips on how
to save money.
3. Reduce Regular Expenses
Where can you find the most potential for saving money? With
things you have to pay for again and again. Look first at the
big regular expenditures. Find ways to cut your utility bills,
driving expenses and perhaps even the mortgage payment or rent.
There may be ways to save on all of these and more. Small stuff
matter too if it is regular enough. For example, replace that
three-dollar cup of coffee you stop for every weekday with a
fifty-cent one at home and you'll save $650 each year, or about
$30,000 in the working years of your life.
4. Track What You Spend
Here's a simple but enlightening exercise: Write down every
dollar and penny you spend each day for a month or two. People
probably avoid doing this because they are afraid to see the
truth spelled out on paper. But do it and you'll see how much
actually goes to your bills, meals and habits. It's possible
you'll discover that what you think you value isn't reflected
in how you spend your money. This could prompt some money saving
changes in your life. That leads us to the last of our tips on
how to save money.
5. Be a Conscious Consumer
It's easy to spend money without thinking about whether we
need the thing we are buying, or if there is a cheaper alternative.
We shop almost unconsciously at times, but becoming more aware
of our choices is a great way to spend less. Once you have actually
tracked your spending for a while this awareness is easier. Spend
a month consciously thinking about each thing you spend money
on. Make it a habit to ask yourself questions like, "Is
it worth what it costs?" and "What alternatives do
I have?" and "How important is this to me?"
Delaying purchases is another way to become more aware of
how momentary impulses and feelings lead us to make purchases.
Wait a week and most things will still be there to buy, but many
things will no longer be desired. Apart from the lessons this
can teach us, it is also just a great way to save money.