One way to accumulate assets for retirement, education or other major goals is to reduce your spending. Studies have shown that these savings can add up over the years to a substantially increased nest egg.
The familiar expression “A penny saved is a penny earned” overlooks the impact of taxes; a saved penny is, in fact, worth more, often much more, than an earned penny because you pay tax on an earned penny but not on the penny you save.
Thus, tax-free savings, with earnings compounding over the years, can really increase your nest egg, making it worthwhile to explore the following money-saving techniques.
This Financial Guide provides you with 10 tips for making sure that more of your money is slated for saving and investment. More important, it provides you with links to other Financial Guides that help you implement these tips and maximize the ultimate return.
While most people appreciate the importance of a financial plan, too many put it off to the tomorrow that never comes. It is important to identify your goals and determine how best to achieve them. A financial plan can help you do this.
Related Financial Guide: Please see the Financial Guide: YOUR FINANCIAL PLAN: Getting Started On A Secure Future.
Use an automatic savings plan to make sure that you save a percentage of your paycheck every payroll period. The percentage should be determined by your financial planning needs. Some people need to save 10 percent of their gross pay while others need to save more. If the amount saved goes to a 401(k) plan or other tax-deferred plan, so much the better.
But don’t stop with automatic savings. Put aside everything you can. If you invest $50 a month in a mutual fund, you could have as much as $25,000 in ten years, depending on the rate of return.
Tip: A well-thought-out budget will help you determine how much you should and can save.
Related Financial Guide: Please see the Financial Guide: BUDGETING: How To Prepare A Workable Plan.
Related Financial Guide: Please see the Financial Guide: REFINANCING YOUR MORTGAGE: When And How Do It.
To save interest, consider replacing your consumer debt with a no-fee, no-points home equity loan. However, bear in mind that you are putting your home at risk.
Related Financial Guide: Please see the Financial Guide: HOME EQUITY LOANS: How To Shop For The One That’s Best For You.
Tip: Once you have paid off a car loan or other debt, keep sending that payment to a mutual fund or other investment.
There are many ways to cut your credit card costs, e.g., switching to a card that charges less interest.
Tip: Try to pay for everything in cash. It’s a good way of disciplining yourself.
Related Financial Guide: For suggestions as to other ways to cut credit card costs, please see the Financial Guide: CREDIT CARDS: How To Choose And Use Them Wisely.
There are many ways to reduce your bank fees. Consider:
Tip: Stop using your ATM card if you find you are withdrawing too much cash. Make yourself go to the bank and withdraw the money instead. This may help you to spend less cash.
Related Financial Guide: For suggestions as to other ways to cut bank fees, please see the Financial Guide: BANK ACCOUNTS: What To Look And Ask For.
Here are some ways to save on insurance of all types:
Related Financial Guide: For suggestions as to other ways to cut life insurance costs, please see the Financial Guide: LIFE INSURANCE: How Much And What Kind To Buy.
Related Financial Guide: For suggestions as to other ways to cut auto insurance costs, please see the Financial Guide: CAR INSURANCE: 10 Cost-Cutters To Save You Money.
Related Financial Guide: For suggestions as to other ways to cut home insurance costs, please see the Financial Guide: HOMEOWNERS’ INSURANCE: How To Get The Best Coverage And Value.
Here are some thoughts to keep in mind in cutting utility costs:
Today’s cost-cutting competition among phone service providers offers many opportunities for savings on your phone bills, such as:
For instance, skip your yearly vacation this year or take a less expensive one. Another way to save one big yearly expense is to swap an expensive health club membership for a YMCA plan.
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