Saving money, what is the best strategy?
If you are one of a lucky few who are not worried about saving money then you can stop reading now at this sentence. For the rest of us saving money is an almost constant worry. Financial experts say that saving is at an all time low with many Americans living paycheck to paycheck. Financial planners agree that the most prudent thing to do is to have at least 3 months worth of living expenses stashed away in savings but for most of us that seems daunting and even overwhelming. But the good news is this, by making just some small changes you can reap some big savings. Then before you know it you will be among that lucky group who doesn't have to worry about a rainy day. Here is some basic money saving tips to get started on your path to saving money.
Take advantage of your employer's contribution program. This is just like free money. For example if you are contributing just 3-4% of your pretax income towards your retirement account your employer may be able to match that as well taking your total contribution to 8% (half of which did not even come out of your pocket!). Check with your employer for the availability of this type of plan. Most contributors to these types of plans say they do not even miss the small amount that is taken out of their paychecks since the deduction is usually made automatically. This is a significant way to build wealth quickly.
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Reduce the amount your debt is costing you. While many people feel overwhelmed by the amount of credit card and other debt they may be carrying there are strategies to help deal with this. Call your credit card company and simply ask politely to talk to a supervisor. Explain that you have been a long time customer and would like to see if you can have your interest rate reduced. Studies have shown that consumers who try this are successful almost 90% of the time! Just don't get carried away when your interest is reduced thinking you can shop more. Pay off your debt and free up money that can be put towards your saving plan.
Look at deductibles on your insurance. Many people are carrying low deductibles on their insurance plans. What this amounts to is that you are paying for this up front. While no one should go uninsured or underinsured investigate what upping your deductibles on car, home and even health insurance would really cost. You may find that there is a huge difference in price which then equals money you can save and your coverage won't be that much different. Take the money you are saving and immediately put into your bank account.
Consider the "latte factor". This term first came about by financial analysts who urged those gourmet coffee drinkers to give up their $5 a day latte and put the money into savings. While you may not be a coffee drinker don't be afraid to look long and hard at your lifestyle and see what changes you could make. Perhaps you eat lunch out everyday could you begin packing a more economical lunch from home? Even a few days a week could make a huge difference. Check out recreational and extra items to see what could be trimmed or eliminated. Some savers report trimming the clothing budget, switching to a cheaper cell phone or cable T.V. plan and having significant savings. Savings doesn't have to mean deprivation just consider those things that could managed better to open up funds to put towards savings. By making just a few small changes you can be well on your way to the savings plan you really need.
