Is your budget so tight it squeaks? Most people do find it hard to get out of the paycheck to paycheck cycle. I know it’s hard to believe, but there are always more ways to tighten things up and find a little extra money. And when it comes to saving money, a little extra can go a long way. By squirreling the money into an interest generating account or GIC, it won’t be long before you have the beginnings of that nest egg, travel fund, or new car you’ve been dreaming about.
Make Sure You Accelerate Your Mortgage Payments
If you’re making bi-weekly mortgage payments, then you’re saving a little money, but by switching to accelerated bi-weekly payments, you’ll save thousands over the long run in interest on your mortgage. As an example, regular bi-weekly payments could save you almost $800 as opposed to monthly payments. Still, accelerated bi-weekly payments could mean a savings of $10,000 in interest over the amortization period of your mortgage (based on a 25-year amortization at 3%).
Waive the Mortgage Insurance
Chances are you don’t even realize you’re paying to insure your mortgage. This pesky charge can be as much as $20 a month or sometimes even more. Not only is that money you could be putting aside for yourself, but the coverage you get is inadequate. This insurance policy only covers (under certain circumstances) the balance remaining on your mortgage (which diminishes every month); however, your premium stays the same for the life of your mortgage. Ditch it as soon as possible and add the extra cash to your savings.
Practice comparison shopping for everything you buy, and don’t assume that you’re always getting the best deal. For example, most people think they’ll save on their insurance by insuring everything with one company, but most firms have a specialty, like vehicles or home insurance. By separating policies, you could save over $1,000 a year, even without that “multi-policy” discount you’re receiving.
Another assumption people make is that big box stores automatically have better prices. Not so. It pays to quickly check how much the item sells for elsewhere before putting it in your cart at the warehouse or outlet store.
Avoid the ATM
There are two good reasons to avoid ATM’s in general. First, cash in your wallet is a temptation and is more likely to go unaccounted for when it comes time for spending it. At least when you use a debit or credit card, you can track where the money went. Second, those ATM fees can quickly add up to $20, $30, or even $50 a month. Keep your cash in your account, where it belongs.
Free is Always Better
Always be vigilant about finding opportunities for freebies. This includes not only free samples (which are widely available on the internet) but also rewards. Sign up for every rewards program you come across and use them shamelessly.
Speaking of free, what’s better than free money? Don’t forget about the free money that’s available to you by signing up for your employer’s retirement plan and investment matching program. By regularly cashing in on freebies, you’ll start to notice some slack on your budget.
Remove the Temptation
Okay, now that you’ve signed up for every rewards program on the planet, you’re receiving hundreds of emails each week, offering you deals and specials. If these are tempting you to buy things you didn’t even realize you needed or wanted, it’s best to unsubscribe rather than a test that urges.
There are many, many items that people buy that are just as good if they’ve been used by someone else first. eBay is an excellent source for finding super bargains on gently loved items. Expensive things like bicycles, skates, furniture, and lighting fixtures are all examples of things that are better to buy used.
Change Your “Sales” Mentality
This one is huge for many people. Just because something is on sale for a high price does not mean that you need (or even want) that item. Spending money on a sale item is considered spending money, not saving it. Making this small change in your thinking could keep you from “saving” 25% on a great pair of boots you didn’t even need.
Automating all your bills, regular payments, and even your savings deposits will have many benefits. For one, your payments will always be made on time and you’ll never incur late fees or interest charges. You’ll also probably be far more relaxed, as your money will be taking care of itself. And your savings account will be busy accumulating.