First Steps to Save More
There has been a lot of discussion about the need for credit counseling and debt management in the wake of the provisions in the newly enacted Credit Card Accountability Responsibility and Disclosure Act of 2009, which puts information about the consequences of paying the minimum balance on billing statements in clear terms in what may be an eye-opener for many consumers.
Naturally, since the CARD Act governs credit card billing practices, the discussion has been focused on how the average consumer pays bills each month. It’s about time to talk about another way consumers should be thinking about their money – namely how to hang on to it themselves.
When you are already awash in a flood of bills, finding money to save for a rainy day may not seem important, but it’s always smart to control your spending so you can have more money to pay essential bills or add to a savings account you can tap in an emergency.
Look at your spending:
- Record all of your spending for one month and take a serious look at what you are spending money on.
- Create a spending plan – a more friendly way to budget!
Make a list of your monthly expenses divided into two groups: your needs are the necessary expenses, and your wants are optional purchases. After you differentiate between spending for needs and splurging on wants, cut back on the wants. Places to cut?
- Restaurant meals
- Monthly subscriptions
- Premium TV channels
- Daily stops at the local coffee shop
Consider opportunities to save on your necessities:
- Try carpooling or taking public transportation.
- If you have multiple cars, see if you can get by without one of them.
- Do you really need those $100 sneakers, or will a less expensive pair do just as fine?
- Try Super Cuts for $15 rather than the salon haircut for $85.
- Take better care of what you buy so it will last longer.
- Make your own coffee at home and bring your lunch instead of eating out.
Finally, don’t use your credit cards to buy things you really can’t afford.
Keep Banking Costs Down
Look at the fees and recurring charges on your bank and credit card statements and consider how you can reduce or eliminate them. Some possibilities:
- If you pay bank fees, shop for a different account that meets your needs at a lower cost.
- Review your banking habits to cut unnecessary fees.
- Use your bank’s ATMs for cash withdrawals instead of going elsewhere and paying a surcharge.
- Keep close tabs on your checking account to avoid bounced checks, which can be costly.
