Save Money

Money is a powerful weapon that is used to manage almost all the problems in our daily life. People with a small income may have trouble in saving money. If you are one of them, this article is for you. Why should I save if there is more money to spend in each day? The answer to that question is very simple: You need to save to stay out of debt and reach your financial goals. If you have savings do not have to pay extra for big items you buy. The extra is what you pay in interest when you use credit. If you use credit, you may be adding more than 15 percent extra money to your total cost of buying an item. This means an item that costs 60 cents will cost 69 cents when bought on credit.

The reason behind saving money is as follows:

• People who save do not run out of money in an emergency.
• People who save can help others.
• People who save will have secured life after retirement in an older age.

I think the above three points are the basic reasons to save money. Let us evaluate your monthly income and expenses taking a typical example as the following Table:

Money Comes From:

Your Income                           $........................

Other sources                         $.........................

Total monthly Income:       $.........................

Money Goes To:

Food                                         $.........................

Clothing                                   $.........................

Transportation                          $.........................

Health                                      $.........................

Education                               $..........................

Gifts                                          $.........................

Donations                               $.........................

Housing & Utilities                   $........................

Other & Emergencies           $........................

Savings                                   $.........................

Total monthly Expenses:   $.......................

If Total Income – Total Expenses = Total Extra, then you will able to reach saving money. Otherwise, you will not solve your daily problems and no money will remain for future use. Here, I am going to describe various ideas on how to spend less to save money which are as follows:

Save on Energy:

• Close doors and windows in cold season and wear thick clothes to reduce the expenses from the use of thermostat and other type of accessories.
• Turn off the fan and air-conditioning and open windows in summer season which decreases your money from electric energy.
• Turn off your computer when not in use.
• Use CFL bulb instead of Tungsten bulb because Tungsten bulb consumes larger amount of electric power in the comparison of CFL bulb. CFL looks like mercury light which contains fluorescent powder which gives light energy on low electric power.
• Have an expert check the insulation in your house to make sure it is adequate. If it is not, insulate where needed. You can do open areas, such as the attic, yourself. It will save both heating and cooling costs.
• Wear warm clothes in the house in cold weather so you can lower your thermostat setting.
• Take care of home repairs as soon as the need arises. Delay can make the problem worse and repair costs higher.
• Close the doors and turn off the heat or air conditioning to rooms that you are not using.
• Choose equipment with higher energy efficiency ratios (EER). Check the labels for EER.
• Move to a smaller house if the one you live in is bigger than you really need.
• Use energy saving window treatments, such as insulated or heavy draperies and storm windows.

Save on Food:

• Feed your family healthy food from the Food Guide Pyramid to save on medical bills.
• Make a Plan for your meals once a week. First, review the grocery ads to take advantage of specials. Make a shopping list from your menu plan with the ads.
• To keep diseases away from meat, try to make meatless food twice or thrice a week.
• When you use the oven, try to cook more than one item while it is hot. Cook the main dish, dessert, vegetables, quick breads, or other foods at the same time in the oven.
• Stretch ground meat with bread crumbs, oatmeal, or tomato sauce.
• Mix one-part nonfat dry milk with one part regular milk. The family will never know the difference.
• Cut your food shopping trips to no more than one a week. You will save gasoline.
• Prepare some of your own convenience foods, master mixes, and desserts at home.
• Prepare a large quantity of standard recipes, such as spaghetti sauce, chili, pastries, and stews. Then label and freeze them for later use. This not only saves time but also allows you to buy larger amounts of basic ingredients at lower prices.
• When you shop, compare the price per unit: pound, ounce, dozen, package, or square foot. Take your calculator with you.
• Buy fresh fruits and vegetables, fruit juices and milk drinks, oatmeal and peanut butter cookies, and popcorn instead of junk food. You’ll be healthier.
• Grow your own fruits and vegetables. Can, freeze, and dry some of them for future use.
• Waste less! Each year Alabamians throw many dollars worth of food into garbage cans. This happens not only at home but also in restaurants and school cafeterias.
• Eat less expensive foods; drink less expensive beverages.
• Entertain with “pot lucks” or inexpensive buffets such as lasagna and salad.
• Grocery shop when you are not hungry. It will help you avoid impulse buying.

Save in the Home:

• Buy furniture at auctions, garage sales, or second-hand shops.
• Buy low-cost household cleaning products or learn to make your own.
• Cut the cost of your long distance calls as much as 60 percent by dialing yourself and using the daily and weekend specials. Plan what you need to say and limit talking time.
• Use fewer paper products, such as paper plates, cups, and towels, so they won’t have to be replaced as often.
• Strive for a simpler lifestyle. This means owning fewer nonessential things and having less to clean and maintain. Buy less clutter and junk.
• Be creative; use what you have in new and better ways.
• Cut your recreation costs by planning more activities and games at home.
• Entertain friends and relatives at home simply.
• Use your sewing skills to make gifts: aprons, place mats, linens, hand towels, pillows, and needlework. Or, make pictures, wall hangings, chair seat covers, and decorative screens.
• Use some of your homemade jams and jellies for gifts.
• Start slips from some of your plants; then pot them for gifts.
• Plan carefully and thoroughly as the first step in economical decorating.
• Consider remodeling rather than building a new house.
• Learn to paint and to wallpaper.
• Learn to refinish furniture.
• Make your own draperies, curtains, spreads, slipcovers, and table covers.
• Learn to clean, repair, and restore household items yourself. Learn to maintain and repair the house and equipment.
• Make dried flower arrangements from garden flowers, wildflowers, and decorative weeds.
• Decorate your home with items from nature or use family creations.
• Take advantage of free or low-cost learning opportunities, trips, and community services, such as schools, workshops, fairs, libraries, concerts, hikes, public tennis courts, home shows, Extension programs, and other adult education courses.
• Hold a garage sale. Sell those items you no longer need, use, or want.
• Plan an outdoor area for living. Landscape to beautify and enjoy it.
• Buy things that will require as little maintenance as possible.

Save on General Daily Expenses:

• Distinguish between needs and wants consider values, goals, and resources.
• Know alternatives for increasing income.
• Know how much things cost. Comparison shop.
• Know when to use cash, checks, or credit.
• Beware of little expenses. “A small leak will sink a great ship.”
• Shop with a list; don’t buy on impulse. If you see something you really want that you didn’t plan to buy, wait a day before buying it.
• Follow proven buying guidelines. Consider price per unit and watch weights and measures. Check your sales slips. Count your change.
• Pay promptly. Don’t build up interest charges for late payments.
• Know how much money you have. Plan your spending.
• Don’t spend tomorrow’s paycheck today.
• Be sure the time is right for the best price. It’s oftentimes not what you buy but when you buy it.
• Learn the principles for cutting family living costs. Learn, practice, and develop skills in the marketplace, in the use of credit, in thrift, and in using financial institutions.
• Substitute other resources for money. Learn to barter, borrow, share, switch, substitute, simplify, and conserve goods and services.
• Establish a safe level of credit.
• Set aside a realistic emergency fund equal to 2- to 6-months take-home pay.
• Shop for credit just as you shop for merchandise. Consider the cost of credit as a part of the cost of the item you are buying. Know the annual percentage rate as well as the cost of credit in dollars and cents.
• Shop sales carefully. A seasonal sale may save 10 to 25 percent; a clearance may save 50 to 75 percent. Consider the actual savings in dollars and cents.
• Remember, if you don’t need it, it is not a good buy at any price.
• Recycle. It will save money and reduce landfill space.
• Check with your county Extension office for other money saving ideas.

Save on Clothing:

• Study your wardrobe, determine your needs, work out a clothing budget, and stay with it. Clothes bought on impulse rarely fit in your budget or your wardrobe.
• Buy the best quality you can afford, particularly in clothes that will last for several years. This is called “Investment Dressing.” Think in terms of cost per wearing.
• Buy color-coordinated clothes you can mix and match. Buy all-season styles and fabrics when possible. This way you don’t have to buy as many clothes.
• Know how to spot a bargain. When you buy a garment, check its construction, care instructions, fiber content, and other label information. Be sure it will last and will be easy to care for.
• Buy designs that will stay in style.
• Buy wash and wear as much as possible. Clothes that require dry cleaning are expensive to care for.
• Choose clothes with simple trim; they won’t go out of style as quickly. Trim should be of good quality and should require the same care as the rest of the garment.
• Shop factory-outlet stores. Don’t assume there is something wrong with clothes sold there. They could be surplus, samples, or discontinued lines. Any imperfect or damaged items must be tagged or advertised as such. And, the flaws in some may be so minor that they don’t matter at all.
• Accessories can add a new look to your wardrobe for a much smaller cost than buying major items.
• Adapt what you have to current styles instead of dashing out to buy something new.
• When you outgrow clothing, exchange with friends and relatives or recycle them.
• Contribute clothing to a “nearly new” shop sponsored by a charitable organization. Your gift may be tax deductible if you get a signed receipt for its estimated value.
• Learn to sew, but don’t rush out and buy a lot of fabric that you’ll never get around to making into garments.
• Take good care of your clothing and shoes. They will last longer.

Save on Transportaion:

• Keep your car in good running condition. It will be safer and will cost less to operate.
• Walk more; drive less. You will save gasoline and improve your health.
• Learn how to do some of your own car maintenance chores. Change the oil, oil filters, and air filters.
• Use self-service gasoline pumps. Anyone can do it! Don’t forget to check the oil and water levels.
• Form a car pool to go to work, to meetings, and even on shopping trips.
• Ask yourself each time you get in your car, “Is this trip really necessary?”
• List “things to do” and “things to buy” before leaving home. Forgetting and making second trips are costly.

Save on Children’s Expenses:

• Buy or make children’s clothing with built-in growth features.
• Use good quality fabrics, buttons, and trims from out-of-style adult clothes to make children’s clothing.
• Shop at discount stores for children’s clothes.
• Select children’s clothes that are functional and comfortable.
• Teach children proper care for clothing, toys, furniture, and equipment so replacements, repairs, and maintenance will be reduced.
• Involve children in understanding their environment. Reward them in some way for conserving resources.
• Save household items that children can play with such as egg cartons, meat trays, old stockings, and cardboard boxes of all sizes.
• Devise creative, inexpensive entertainment for children.
• Interest children in budgeting their money. Give them allowances, and let them learn to save and stretch their money.
• Start a “child-care pool” with a group of friends to save on babysitting fees.
• Buy basic gifts or supplies when prices are reduced, such as after Christmas or Easter, and save them for the following season.
• Insist the children do some sort of work, besides regular chores, as soon as they are old enough.
•  Involve children in gardening

Save from Insurance:

         Auto Insurance

• You can save several hundred dollars a year by purchasing auto insurance from a licensed, low price insurer. Call your state insurance department for a publication showing typical prices charged by different companies. Then call at least four of the lowest-priced, licensed insurers to learn what they would charge you for the same coverage.
• Talk to your agent or insurer about raising your deductibles on collision and comprehensive coverage to at least $500 or, if you have an old car, dropping this coverage altogether. This can save you hundreds of dollars on insurance premiums.
• Make certain that your new policy is in effect before dropping your old one.

Homeowner/Renter Insurance

• You can save several hundred dollars a year on homeowner insurance and up to $50 a year on renter insurance by purchasing insurance from a low-price, licensed insurer. Ask your state insurance department for a publication showing typical prices charged by different licensed companies. Then call at least four of the lowest priced insurers to learn what they would charge you. If such a publication is not available, it is even more important to call at least four insurers for price quotes.
• Make certain you purchase enough coverage to replace the house and its contents. “Replacement” on the house means rebuilding to its current condition.
• Make certain your new policy is in effect before dropping your old one.

Life Insurance

• If you want insurance protection only, and not a savings and investment product, buy a term life insurance policy.
• If you want to buy a whole life, universal life, or other cash value policy, plan to hold it for at least 15 years. Canceling these policies after only a few years can more than double your life costs.
• Check the National Association of Insurance Commissioners website or your local library for information on the financial soundness of insurance companies.

Save from Banking / Credit:

Checking Accounts and Debit Cards

• You can save more than $100 a year in fees by selecting a free checking account or one with no minimum balance requirement. Request a complete list of fees that are charged on these accounts, including ATM and debit card fees.
• See if you can get free or lower cost checking through direct deposit or agreeing to ATM only use. Be aware of charges for using an ATM not associated with your financial institution.

Savings Products

• Before opening a savings account, find out whether the account is insured by the federal government (FDIC for banks or NCUA for credit unions). Financial institutions offer a number of products, such as mutual funds and annuities, which are not insured.
• Once you select a type of savings account, use the telephone, newspaper, and Internet to compare rates and fees offered by different financial institutions, including those outside your city. These rates can vary a lot and, over time, can significantly affect interest earnings.
• To earn the highest return on savings (annual percentage yield) with little or no risk, consider certificates of deposit (CDs) or U.S. Savings Bonds (Series I or EE).

Credit Cards

• To avoid late payment fees and possible interest rate increases on your credit cards, make sure you send in your payment a week to ten days before the statement due date. Late payments on one card can increase fees and interest rates on other cards.
• You can avoid interest charges, which may be considerable, by paying off your entire bill each month. If you are unable to pay off a large balance, pay as much as you can. Try to shift the remaining balance to a credit card with a lower annual percentage rate (APR). You can find listings of credit card plans, rates, and terms on the Internet, in personal finance magazines, and in newspapers.
• Be aware that credit cards with rebates, cash back, travel awards, or other perks may carry higher rates or fees.

Auto Loans

• To save as much as several thousand dollars in finance charges, pay for the car in cash or make a large down payment. Always get the shortest term loan possible as this will lower your interest rate.
• Make certain to get a rate quote (or preapproved loan) from your bank or credit union before seeking dealer financing. You can save as much as $1000 in finance charges by shopping for the cheapest loan.
• Make certain to consider the dollar difference between low-rate financing and a lower sale price. Remember that getting zero or low-rate financing from a dealer may prevent you from getting the rebate.

First Mortgage Loans

• Although your monthly payment may be higher, you can save tens of thousands of dollars in interest charges by shopping for the shortest-term mortgage you can afford. For each $100,000 you borrow at a 7% annual percentage rate (APR), for example, you will pay over $75,000 less in interest on a 15-year fixed rate mortgage than you would on a 30-year fixed rate mortgage.

• You can save thousands of dollars in interest charges by shopping for the lowest-rate mortgage with the fewest points. On a 15-year $100,000 fixed-rate mortgage, just lowering the APR from 7% to 6.5% can save you more than $5,000 in interest charges over the life of the loan, and paying two points instead of three would save you an additional $1,000.

• Check the Internet or your local newspaper for mortgage rate surveys, and then call several lenders for information about their rates (APRs), points, and fees. If you choose a mortgage broker, make certain to compare their offers with those of direct lenders.

• Be aware that the interest rate on most adjustable rate mortgages (ARMs) can vary a great deal over the lifetime of the loan. An increase of several percentage points might raise payments by hundreds of dollars a month, so ask the lender what the highest possible monthly payment might be.

Mortgage Refinancing

Consider refinancing your mortgage if you can get a rate that is lower than your existing mortgage rate and plan to keep the new mortgage for at least several years. Calculate precisely how much your new mortgage (including points, fees and closing costs) will cost and whether, in the long run, it will cost less than your current mortgage.

Home Equity Loans

• Be cautious in taking out home equity loans. The loans reduce or may even eliminate the equity that you have built up in your home. (Equity is the cash you would have if you sold your house and paid off your mortgage loans.) If you are unable to make payments on home equity loans, you could lose your home.

• Compare home equity loans offered by at least four reputable lending institutions. Consider the interest rate on the loan and the annual percentage rate (APR), which includes other costs, such as origination fees, discount points, mortgage insurance, and other fees. Ask if the rate changes, and if so, how it is calculated and how frequently, as this will affect the amount of your monthly payments.

Save on Utilities:

Heating and Cooling

• A home energy audit can identify ways to save up to hundreds of dollars a year on home heating (and air conditioning). Ask your electric or gas utility if they audit homes for free or for a reasonable charge. If they do not, ask them to refer you to a qualified professional.

• Enrolling in load management programs and off-hour rate programs offered by your electric utility may save you up to $100 a year in electricity costs. Call your electric utility for information about these cost-saving programs.

Telephone Service

• Once a year, review your phone bills for the previous three months to see what local, local toll, long distance, and international calls you normally make. Call several phone companies which provide service in your area (including wireless and cable), to find the cheapest calling plan that meets your needs. Consider a bundled package that offers local, local toll and long distance, and possibly other services, if you heavily use all the services in the bundle.

• Check your phone bill to see if you have optional calling features or additional services, such as inside wire maintenance, that you don’t need. Each option you drop could save you $40 or more each year.

• If you make very few toll or long distance calls, avoid calling plans with monthly fees or minimums. Or consider disconnecting the service altogether and use dial around services such as 10-10 numbers or prepaid phone cards for your calls. When shopping for dial around service, look for fees, call minimum, and per minute rates. Treat prepaid cards as cash and find out if there is an expiration date.

• If you use a cell phone, make sure your calling plan matches the pattern of calls you typically make. Understand peak calling periods, area coverage, roaming, and termination charges. Contracts offered by most carriers will provide you with a trial period of 14 days or more. Use that time to make sure the service provides coverage in all the places you will be using the phone (home, work etc.). Prepaid wireless plans tend to have higher per minute rates and fees but may be a better option if you use the phone only occasionally.

• Before making calls when away from home, compare per minute rates and surcharges for cell phones, prepaid phone cards, and calling card plans to find how to save the most money.

• Dial your long distance calls directly. Using an operator to place the call can cost you up to $10 extra. To save money on information calls, look the number up on the Internet, or in the directory.

Save on Entertainment:

• Frequent the library instead of the bookstores. Your tax dollars fund the library; take advantage of it.
• Form book clubs with friends, coworkers and relatives to recycle your books.
• Read not, waste not. Don't renew subscriptions to magazines or newspapers you're not reading.
• If the subscription cost to your favorite magazine goes up, don't chalk it up to "inflation." Ask for a better price.
• If you are a student or a teacher, say it loudly and proudly. Some periodicals and magazines have special rates for academia.
• Check your favorite magazines' Web sites for online offers that may be lower than others you've received.
• Pick up a video at the library rather than renting one. Or, see if your library has free movie nights.
• Go to the matinees of firstrun movies. Movies with the best prices usually start between 4 PM and 6 PM. So see a show first and then go eat.
• Many communities have bargain theaters that show movies after they've finished their first runs. Patience pays off.
• Skip the munchies. The concession stand is no bargain even at bargain theaters. If you can't imagine a movie without popcorn or Junior Mints, get the smallest size and share.
• Get rid of that ''1,000 mega channel lineup,'' and switch to basic cable. You can save as much as $20 a month.
• Delete television from your life altogether. It cuts the "I wants" drastically.
• Try out a dollar theater, a local film festival or even a drive-in. To really save, volunteer at a local fair or festival you'll get in free.
• If you live in a college town, there's probably a campus movie theater that shows low-cost art or foreign films.
• If you don't mind standing during a show, volunteer to usher. Just don a pair of black pants and a white shirt.
• Volunteer at fairs, festivals and sporting events. You'll get free admission, food and camping, have minimal duties and often get to hobnob with the artists.
• Review concerts and plays for a local newspaper. You have to be well-informed about the subject to write a credible review, but you'll typically get two free seats in the best section of the house.
• Win concert tickets on the radio by putting station calling numbers on your speed dial. A college radio station tends to have the fewest listeners and usually lots of tickets to give away.
• Check the newspaper for performances by local artists. They're usually low cost or free and often held in coffeehouses, bookstores or libraries.

Save Money by Reducing Debt:

• Put income tax return toward debt.
• Obtain personal loans/gifts from family.
• Pay off then cancel credit, charge, gas, and store cards.
• Set up a spending plan to find money being wasted that could be paid toward debt.
• Once one debt is paid off, apply the payment toward the next highest interest debt. Continue the process until all debts are paid.