9 Handy Ways to Save Money

by Dual Income No Kids on July 10, 2007 · 0 comments

Lots of people talk about building wealth through investing. But, before you can start investing in real estate or stocks, you’ll need to save money. To help get you started on the saving path, Jane Bryant Quinn reccomends 9 handy ways you can sock away a little bit extra.

1) Save all your cash gifts: Everytime grandma gives you $5, try socking it into your bank account.

2) Pay Yourself First: Pretend that your savings is a bill. Set aside a specific amount and treat it like a bill. When you pay your other bills, include a check to be sent to your own deposit account or set up direct deposit from your checking to your savings account. This will help build discipline and allow the power of compound interest to work in your favor.

3) Trim Your Spending By 5 Percent: This is easier said than done. If you eat out, try staying at home or buying budget brands when you go shopping. You might also try focusing on specific areas of your spending that are problematic. For example, we were able to successfully tame our monstrous power bill by being careful about our energy useage.

4) Don’t Spend Your Next Raise: Instead of spending your next raise try setting up an automatic deduction from your paycheck so your extra cash goes straight into your savings account. My better half, Miel, is really successful at doing this. She’s put her raises straight into her investment and retirement accounts using this method. Its great because when you use automatic desposit, you never miss the money.

5) Pay Off Your Mortgage Faster: Sign up for a bi-weekly payment plan or make an extra payment each year. You’ll build up your equity sooner, and this is a great form of forced saving.

6) Refinance Your High Interest Loans: If you have a high interest car or student loan, try refinancing it get a lower interest rate. In the case of some student loans, you can do this with a single phone call.

7) Pay Cash For Everything: If you pay cash, you’ll be less likely to spend your money than with a credit card. This main idea here is that mental accounting is very different when using plastic money. Its been well demonstrated that consumers spend more when using credit cards then when paying cash.

8) Stop Buying Books: If you’re like us DINKs you spend a fair amount on books. If you want to save money, stop buying books! Instead go to the public library. The library many not have the latest and greatest copy of Harry Potter, but it will definetly have more books than most people could possibly read in a lifetime.

9) Pay off Your Car and Save The Payment Money: A lot of people trade in their cars after they’ve paid them off. Instead of doing this, try to make make repairs as they are needed. Hold onto your car for a couple of years and save your car payment money instead of forking it over to the auto dealership. Two years of payments, at compound interest, can make a substantial difference in your networth over time.

Happy Saving!

– James

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