10 Amazing Ways to Cut Spending
It’s now start the year of 2011, you might want to review your financial level. Is 2010 bring you happiness in term of financial healthy? Do you always run out of money before end of the month? Do you know where the money go? Do you struggle to find money to invest for retirement,
emergencies and other financial goals? Here are 10 tips to cut your spending and stretch your money to the max:
1. Consider dropping your home telephone line. Your cell phone is probably all you really need, and most likely it has free long distance. You could save $30 or more per month by dropping your “land line”.
2. Cut the trips to Starbucks or other premium coffee shops. Often called the “latte factor”, spending several dollars per day on luxuries like premium coffee can really add up. For example, if you spend $4 for a cappuccino five times a week for 50 weeks out of the year (you’re on vacation the other two weeks), you would spend $1,000 in a year. Try treating your trip to Starbucks as a treat instead of a habit. You’ll save money and probably lose weight too!
3. Pay your mortgage payment bi-weekly instead of monthly. You’ll pay less interest and pay off your mortgage faster.
4. Carry cash instead of credit cards. Psychologically it’s harder to spend cash than it is to use the credit card. You’ll spend less and save on interest charges.
5. Use the “envelope system” for groceries, dining out, entertainment, and other discretionary spending categories. This will help you track how much you spend in these categories as well as prioritizing your spending.
6. Raise the deductible on your homeowners and auto insurance policies. It’s not wise to file claims for small losses anyway (insurance companies love to raise rates after you file a claim), so a higher deductible will save you money now and in the future.
7. Buy regular gas instead of premium. Most cars don’t need premium gasoline. Also, take public transportation if it’s available in your area. Take advantage of “park and ride” and carpooling options.
8. Plan what you want to b uy. Take a list with you to the grocery store and stick with it. Studies show that impulse buying can add $10-50 to your grocery bill – ouch!
9. Go to the library instead of the bookstore. If you’re an avid reader, give yourself a book budget for books that you will want to keep, and go to the library for everything else.
10. Vacation at home. Check out all the local sites and happenings. You’ll rediscover your hometown and save on travel and hotel costs.
These are just a handful of ways you can cut spending and stretch your dollars, but if you follow these tips you’ll discover you have more money at the end of each month to apply to other financial goals, such as saving for college, retirement or just for a rainy day.
Categories: Personal Finance Tags: budgeting, Cash flow planning, financial planning, investments, retirement planning, taxes
How To Create Your Own Emergency Fund?
Do unexpected car repairs, quarterly insurance payments or unexpected medical bills find you hard pressed to squeeze even one more dollar out of an already stretched monthly budget? These are inevitable expenses and sometimes can put you under a stress condition when you need the cash to pay for these emergencies and unexpected expenses. But if you learn to budget for these emergencies events and save in advance, you will be at a better position to handle them.
Like most of Americans, you may stretch your income to cover the regular monthly expenses, and always choose to ignore or not to think about the brakes that are getting spongy or the plumbing that's beginning to make strange noises. And you end up a surge on your monthly expenses when the brakes wear off and the plumbing break out.
Planning and saving for those events can help prevent an ordinary life from turning into a crisis and can also cut down dependence on credit cards. Not having savings is a major reason people get into debt.
Here are some steps to help you get started to plan for your emergency fund, the "Saving" fund which will help you prevent financial disaster.
1. Identify your irregular expenses
Analyze your pass credit card statement and checking account registers to identify your irregular expenses occur throughout the year. Examples of these irregular expenses are property taxes, insurance premiums, vacations, car tune-ups, holidays and birthdays. List down in a piece of paper all the expenses which are not spent in monthly basis.
2. Write the anticipated amount on the calendar
In most of cases such as insurance premium and property taxes, you will know when the expenses are due to occur. And for those unknown cases such as car repair and plumping repair cost, try to anticipate their expenses and list them somewhat earlier than you actually expect them to come up. Be sure to update your calendar as you discover more expenses.
3. Plan-in the non-monthly expenses into your monthly spending
Based on the foreseen amount and anticipated amount that are captured on your calendar, plan ahead your non-monthly expenses into your monthly spending. For example, you know that your car insurance is going to due on May, set aside small amount of your money for this purpose starting on February. And when May rolls around you can transfer the expense to your spending plan and have money available to pay it. Setting aside even a few dollars each month for foreseeable expenses can prevent larger money woes ahead.
Sometimes, you may find it hard to set aside some extra money from your monthly income; but remember, repairing your car or paying your insurance is not optional expenses and you need to spend it soon or later. So you need to find a way to reduce your monthly expenses so that some money can set aside for emergency fund. You may need to track your spending; then, reduce or cut the optional expenses such as entertainment, dinner at restaurant and other impulse purchase, the money save from those optional expense can be put into your emergency fund.
In Summary
One of the mistakes people make when trying to get their finances under control is not having an emergency fund on their savings account. The problem is that if you don't have money set aside for those unavoidable bills, you inevitably end up adding to your credit card balance to cover the difference.
The bottom line is to start today. It may be discouraging at first if you find that you don't have enough money to fully fund your emergency fund, but you'll begin to succeed the minute you start the process.
Categories: Personal Finance Tags: emergency fund, finance, financial planning, irregular expense, spending control