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How To Save Up Money In A Bad Economy

March 11, 2009 By Christopher 2 Comments

failure Recently I was opening my mail and got a statement from one of my financial companies. I opened the envelope and inside was a recent account statement. Then I read the statement.

My jaw dropped. My eyes were in disbelief.

At this point I was going to need a new set of eyes and a pacemaker to kick my heart back into rhythm again. I had lost over a third of my money in my investment accounts.

Has this happened to you yet?

Maybe it was your 401k, IRA, or your kids college 529 plan. In any case, they probably all lost money in the last year with the market hitting twelve-year lows.

At this point, many of you may find it kind of hard to just grin and bear it and keep saving up money. I know how you feel. So the real question is how do you save up money in a bad economy?

Where Are You Saving You Money

If your like most people you don’t save your money all in the same place. You might have some in non secure assets like a 401k, IRA, mutual funds, or college savings plans for your kids.

Then you may also may have some in more secure assets like savings and checking, certificate of deposits, and even online savings accounts.

The point here is that we all save money in a variety of places. But one thing I see very common in people who invest in the market is when they see the economy tank, they tend to pull their money out and put it into more secure investments, presuambly thinking they won’t lose more money this way.

I know what your thinking: why would I leave my money in a place where it is constantly shrinking? The truth is we tend to look at the short term view when it comes to investing in the market and not the long term and this is the approach you need to take when saving up money in a bad economy.

The fact is it’s actually healthy for the market to take a dive every now and again. Think about it. If the market always continually went up you would always be paying more and more for your investments. A good example would be if gas prices would continually go up and never come back down.

Yikes!

Another example is the current 2008 to 2009 economic crisis; the price of most investment sure aren’t gaining much but they are a lot cheaper. In fact, if you are under the age of 40 you are facing a huge opportunity right now.

Yup, because the prices on most investments like stocks and mutual funds have dropped so much that the best thing you could do for yourself right now is buy like crazy.

So what do you do if your older than 40?

That’s a great question. If your older than 40 and you are having a tough time dealing with this economy you may want to reconsider your risk tolerance.

What Is Your Risk Tolerance

Risk tolerance is nothing more than the amount of risk you’re willing to take in the market. They range from aggressive to conservative.

The aggressive end typically invest in more volatile companies like the ‘next Microsoft’. They are your smaller companies with less capital, usually less that 1 billion.

Then their are your more conservative portfolios which invest more into larger companies like Walmart, IBM, and Microsoft. These companies are usually less volatile and have a lot more capital, say 5 billion or more.

The point here is if your not comfortable with the risk you are taking or don’t realize some of the risk you are taking, you may want to reconsider your options.

A good example of this is when a friend of mines client moved their money into a mutual fund. Now this particular individual thought it would be OK to invest into the market and take some bigger risk, I mean after all it can’t be that bad or at least they thought.

Then the nightmare started. The client watched the news almost everyday and they would see what the Dow Jones and the S&P going up and down. As a result, they would call their financial planner everyday asking if their investment were OK. After a while, it began to get very irritating and finally decided it would be best if he would assign the client to a different representative.

So the moral of the story is always know how much risk you can handle. When I was in financial services, I always prepared my client for the worst and hoped for the best but I always made sure they could handle the risk involved.

Are You Prepared For A Bad Economy

Most people aren’t prepared for a bad economy. If their is one thing you remember form this article it’s that the market will go up and it will go down. In fact, statistically speaking, an average bull market last anywhere form 18 months to 3 years.

However, you should know that a recession can last a long time as well. If you aren’t prepared, take time now to put a plan in place so you will be ready for the next down swing.

Call your financial professional if you have one, start saving an emergency fund, and last but not least cut down on frivolous spending. This is your best bet to survive a bad economy.

Share Your Story

If you have a story to share about this bad economy, feel free to leave a comment and let us know what you did and how you will go about fixing your situation.

Till then,

Chris

This post was recently featured in the Money Hacks Carnival by Good Financial Cents.

Filed Under: Saving Money Tagged With: bad economy, how to save up money

Save More Money: 10 Ways To Fill Your Emergency Fund Fast

December 1, 2008 By Christopher 9 Comments

In the previous two articles we talked about how set up your emergency fund, where to save your money at, and today I am going give you some quick tips on loading up your emergency fund fast.

Before I dive into them I do want to point out that some of these tips will be easier to do than others. In fact you may even be doing some of these things. I am also assuming that you have no money in your savings to put toward your emergency fund for those of you who may say they don’t have no money. This post is designed to get you thinking outside the box.

Anyways on to the tips…

Sell the big toys and things around home. You may have things you don’t use around your home that could create a little cash but you may also have some big toys around home. For example I have a couple of snowmobiles and a timeshare. I recently just sold one snowmobile and pumped up my emergency fund with an extra $1000. This was actually hard for me to do though because it was my wife’s wedding gift.
Down grade your vehicle. Do you have a big gas guzzling of a beast for a vehicle? Think about selling it off and buy something used for just a few thousand dollars. This could add big money to your emergency fund. Remember I didn’t say this would be easy.
Divert money from your 401k. I’m not saying take money out of your 401k or retirement plan but divert it before it gets there for a short time to build up an emergency fund. However there is one danger in this. Don’t get caught up in spending this money and once you have what you need go back to putting it in your 401k again.
Down grade your cable. Cutting back or even cutting off the cable can save big bucks quick. With the average cable bill around $50 a month this would be a great way to save an extra $600 a year.
Down size your home. Do you have a home bigger than you really need? Is it hard to make the mortgage payments? Downsizing your home to something a bit smaller could add probably the biggest chunk to your emergency fund. With the right buyer you could get a few thousand dollars to several thousand dollars.
Cut off the cell phones. Remember the days before cell phones? How did we communicate with others? Even with out cell phones life will go on. Cut off your cell phones and you’ll save big with around $80 to a $100 a month or more. If that’s not possible consider getting a track phone and buy the minutes you want.
Save your raise or Christmas Bonus. For many of you who will be getting that big Christmas bonus or raise after the first of the year consider saving it instead of spending it. Even with a 3% cost of living raise this can add up. Besides you won’t miss the money anyways since your not use to having it.
Cut off the Internet. If you have high speed Internet you can save a bundle by cutting this luxury out of the picture. Though some of you may not be able to do this you may want to consider cutting down to dial up. This is where I started. With dial up packages as low as $10 a month this could save you $30 to $40 a month easy.
Cut off wasteful spending and pay for just what you need. Put a budget together and delegate where your money is going. Look for places you could save money at such as cutting down on fast food 5 times a week. Know where your money is going will usually show you simple places you could save money at. In fact I recently did this and realized after paying off all of my debts and living expenses that I had an extra $150 left at the end of the week.
Start a part time business. I talked about this in a recent post why you should start a part time business. A simple part time business can make you some big bucks quick. When I started in financial services my first deal was a mortgage that made me $500. Not bad for one deal. In fact in some part time business can pay you residual where you’ll get paid every month as long as there a customer.

Do You Have Any Other Ideas?

I know that some of these ideas were probably a bit brutal but think of it this way would you rather have the big house or be up all night worrying about how your going make next months mortgage payment. Would you rather have a cell phone and living paycheck to paycheck or is having a little peace of mind knowing you’ll make it though the month. It’s all about your preferences

Finally, do you have any other ideas to save money fast for your emergency fund? I’m sure there are a ton of other ways to do it so leave a comment let everyone know. When we share we all grow. To get more money saving tips check this post out.

The Post was recently released on The Carnival of personal finance #182 held by Free From Broke.

Filed Under: Saving Money Tagged With: emergency fund, i will teach you to be rich, save money, save more money, saving money tips

Save More Money: 3 Places To Stash Emergency Fund Cash

November 27, 2008 By Christopher 9 Comments

Are you ready to save more money? This is the second post in the series of three about saving more money and building your emergency fund. In the first post 5 Tips To Setting Up A Stellar Emergency Fund I showed you how to set up your emergency fund.

In this post I’m going show 3 places where you can stash your emergency fund cash. I’m also going to go in depth about each option and show you how each place may or may not benefit you.

1. Laddering A Cd

This is probably one of the first places that most people will go. In fact none of these 3 options are the wrong one but they all have there advantages and disadvantages. In fact people will tend to ladder them into a series of reoccurring accounts.

What I mean is if you want to ladder a 6 month CD you would put money in a new 6 month CD every month for the next 6 months. For example if you would put $1000 into a new 6 month CD every month for the next 6 months you would have 6 Cd’s with $1000 in them totaling $6000. This way you would have a CD coming due every month.

A couple of things that makes Cd’s a great emergency fund are:

Harder to get to the money. All Cd’s have time periods for accruing interest. It may be 1 months up to 5 years in most cases.
Interest is guaranteed. All Cd’s will be assigned a specific rate for it’s time period. In most cases the longer the Cd period the higher the interest rate.
The Money is liquid. With Cd’s being liquid they can be accessed if need be. There will be no tax penalties.
Decent interest rates. Cd’s will usually range between 3% and 4%. Though almost all banks rate vary from one bank to the next.

However to every advantage there is a disadvantage:

Most Cd’s need around $1000 to $5000 to fund them. If your living paycheck to paycheck this option is going to look very unattractive to you.
If you pull the money out early you will face an interest penalty. If your trying get some growth on that emergency fund cash but you constantly need to dip into it you will be facing some big interest penalties.

2. Money Market Funds

Some great advantages to having a money market fund as your emergency fund:

Money is liquid. Again just like the Cd’s they have this great benefit of being easily accessible.
Usually has a check writing feature. The great thing here is you don’t have to go to the bank to get the money you can just write a check.

The Disadvantages:

Usually need $1000 up front to start an account. Again if you live paycheck to paycheck this is not an attractive feature. In fact if you want to add money to the account your minimum payment has to be at least $50 a month.
In order to write a check it must be for $500 or more. This can be an issue if you just need a little bit of money. It may also temp you since you had to take the extra money out to spend it instead of putting it back into the fund.
No Guarantee on the interest. With money market funds their are no guaranteed interest rates. In fact most times rates aren’t very attractive usually around the 1% to 3% range at best.

3. High Yield Savings Accounts

This is actually my favorite place to save money for an emergency fund simply because it has the most flexibility. Although it still has a few advantages and disadvantages.

Decent interest rates. With these they typically hover around the 3% range. Not bad for an emergency fund.
Rates are fixed. Unlike the money market funds these rates are fixed and stay they same.
Easy to get to but not to easy. With these types of account they may link to your checking account so you will have to notify the bank to transfer funds.
In some cases no minimum amount to start an account. I can’t say every account is like this but some are. You just have to look for the right one.

The Disadvantages:

These type of accounts are sometimes just Internet based. Some banks just have an online presence and have no brick and mortar buildings. This is really a personally preference here.
May require certain amount a cash upfront to start the account. This isn’t always the case some do require $1000 or so to start the account. You’ll have to shop and compare.

Where Do You Save Your Emergency Fund Cash?

Do you save your money in one of the three areas that I talked about above or do you have another great place to save your money that you would like to share in the comments below. Any good ideas are welcomed.

Filed Under: Saving Money Tagged With: CD, High Yeild Savings Account, Money Market Fund, Saving Money

Save More Money: 5 Tips To Setting Up A Stellar Emergency Fund

November 25, 2008 By Christopher 8 Comments

This weeks starts three part series on emergency funds called Save More Money. In this series I will be talking about every thing from setting it up, where to put it, and how to fill it up fast.

In today’s post I’ll give you some cutting edge tips that will help you set up your emergency fund so it will do everything you want it to and more. I will also be covering some of the pitfalls I’ve seen people fall into and how to stop them.

1. An Emergency Fund Will Give You Your Sanity Back

An emergency fund is your insurance policy against all those unexpected things that come up in life that were not really prepared for. For example if your water softener would suddenly go out.

Ouch! This is an expensive repair. This happened to me a month before Christmas once. A $1000 gone just like that.

If your living life paycheck to paycheck this can put you in a world of hurt fast. It’s also not so fun to go through life like this. So now that we know what one is, how do we use it?

Emergency funds are only used for the times we really need cash at a moments notice when we don’t have enough for an unexpected expense. This isn’t money that is used on a regular basis. Here a few reason I use an emergency fund.

An emergency fund helps you sleep better at night. Losing sleep over financial issues can cause fatigue and effect other areas of your life such as work and family life.
An emergency fund lets you take advantage of other opportunities. Sometimes there are things that you would like to do but you just can’t because one slip up and you’ll have nothing left. With a funded emergency plan you don’t have to pass those opportunities up.
An emergency fund will pump up your net worth. Having cash to spare will go a long way in helping you get a loan. Lenders love when you have extra cash set aside.

2. Liquidity Is The Name Of The Game

Keeping your emergency fund liquid or in cash is very important. To pull it out with no tax penalties is very important. Some also believe in trying to get the highest interest rate around. While I agree extra interest is great but having the money there when you need it is even more important.

In my personal opinion I am willing to sacrifice a little interest on my emergency fund so I can gain quick access to it. This brings me to my next point.

3. Have Easy Access But Not To Easy.

What I mean here is don’t make your emergency fund your savings account, credit cards, or debit card. While these are great tools to take advantage of they don’t qualify as great emergency funds.

Having your fund setup in places that are to easy to access will in most cases aid in taking advantage of it. In these places it’s just to easy to withdrawal money from. I will be going through my favorite places to put emergency fund cash on Wednesdays post.

4. Other Places You Shouldn’t Setup An Emergency Fund.

Here are a few places you should never put an emergency fund.

Mutual Funds. Putting money in mutual funds gives you the risk of losing money from your account even if the account is set up very conservatively don’t do it. Mutual funds don’t guarantee any interest or particular performance.
Annuities. Annuities are meant as retirement vehicles. If you put it in a variable annuity you fall into the same problems as mutual funds and if you put it into a fixed annuity you may get a guaranteed interest rate but you will face another problem that annuities will cause. Annuities are known for having surrender penalties on them. In fact fixed annuities have longer surrender periods on them. What this means if you set your emergency fund up in an annuity you not only have to pay taxes after taking the money out but you have to pay a surrender penalty most times around 8% of your account value to pull out the money.
IRAs/ Roth IRAs. Again these are meant as retirement accounts. Whether an IRA is set up in a mutual fund or an annuity this is not a good idea. Doing this means you will face certain tax issues such as 10% tax on withdrawals before age 59 and a half.

5. Contribute Regularly And Have The Right Amount Set Aside.

Having the right amount of money in your fund is very important. So how much should you have? I recommend a minimum 3 month worth of cash set aside, 6 months would be preferred though. The reason I say this is because the time it takes for the average person to find a new job is a little over 4 months now.

Figuring out how much you need in your fund is very easy. Ask yourself what you make right now? Is it enough? Do you need more? If you are comfortable on what you make right now in a month times that by the number of months you wish to be able to live off of your emergency fund.

For example if you make $3700 a month currently and you would like to have 6 months saved in your emergency fund then you would need roughly $22,000 set aside for emergencies.

Last, you want to pay yourself first. So contribute on a regular monthly basis to your emergency fund. If you don’t have much money there are accounts you can start and fund with as little as $25 a month. Doing this helps grow your fund even when you don’t have much money in it to start with.

Do You Have An Emergency Fund?

Read the next article in the series on Wednesday to see where the best place are to set up your emergency fund and also see if your current emergency fund is in the right place and if not where a better place for it might be.

This post was recently featured on The Carnival Of Personal Finance by Mighty Bargin Hunter.

Filed Under: Saving Money Tagged With: emergency fund, Saving Money

How To Beat The Gas Pumps Form Stealing Your Wallet?

November 7, 2008 By Christopher 2 Comments

Are The Gas Pumps Sucking Your Wallet Dry?

Fuel, the commodity that helps you do so many things that you may wonder what would happen if you didn’t have it anymore? Without it everything you know would cease to function.

With the recent higher gas prices and the drain on peoples wallets fuel has literally put a strain on peoples wallets. Many have been wondering how they can save money on there gas. This got me thinking about how I save gas.

In this post I won’t be giving you a bunch of tips on how to save gas but rather show you a program I use to save gas and keep more money in my wallet.

How I Save Money On Gas.

A few months ago with at that time the higher gas prices I was feeling a very big pinch from my wallet. So instead of complaining about the situation I decide to take matters in my own hands. I ran a series of test to see how I could save money at the pump.

On October 2nd I decide to start my little experiment again. With my current vehicle decide to fill my tank completely full and then run it until it was empty.

Sounds like a simple idea.

So I filled my vehicle up with a cost of around $79 which was completely empty when I started. I then ran the vehicle until it was completely empty.

The next time I filled up was on October the 27th. Nearly three and a half weeks later! Talk about saving some money.

By running this plan I only paid around $26 a week in fuel but here’s the best part before I was running this program I was paying around $65 a week for fuel driving here and there not giving any thought about saving any fuel. That’s almost $40 in savings a week or $169 a month or $2028 a year!

That’s saving money!

Do You Have To Have A Better Vehicle.

When you read my story you might say I had a great car with great gas mileage. Well it’s not what you might think. I ran that test with my truck. A Chevy 1500 V-8 half ton.

When I ran this simple little test it made me realize I didn’t need a car that gets 30 miles a gallon. I just needed a vehicle that was reliable and trustworthy. Though you could only imagine what the results would be if you did have a car that got 30 miles to the gallon. If you got a good story about this leave me a comment.

Simply put having a great vehicle is all you need to save gas.

What Will Help You Save Gas?

When I ran this test I followed a few key points that helped me out.

Be conservative with your gas. You don’t have to drive everywhere. If you decide to drive somewhere combine errands so you don’t have to make double trips. This will help on fuel savings as well as help your vehicle last longer.
Don’t fill up late in the week. Filling up late in the week especially on Friday will urge you to drive more on the weekend. Instead fill up on Tuesday it tends to be the day when fuel prices are lower.
Don’t be fooled by the gas prices. One of the biggest mistakes I see people make are filling up there cars as soon as the gas price goes up a little bit. In fear that prices will skyrocket. Don’t let fear control you wait until your vehicle is empty.

It’s Not Full Proof.

You might be saying ” I drive an hour to and from work.”

True this idea is not full proof and may not work for everyone. It just happen to work for me because of my unique situation. In my test I only drove my truck to and from work and on a few errands I ran. Other than that I didn’t drive at all.

However if you don’t drive far to work and only run a few errands here and there this may be a great option for you.

Take “The Beat The Pump Challenge.”

Do you think this will work for you? Take my beat the pump challenge and see what happens. Fill your vehicle up and see how long you can last. Follow my point about saving fuel above and see how much you save. After the challenge leave me a comment and let me know how you did.

Filed Under: Saving Money Tagged With: save gas, save money on gas, Saving Money

2 Ways Your Savings Could Be Affected In A Recession

October 22, 2008 By Christopher 1 Comment

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Currently many of you may be feeling the slam by the market. You may have lost money in your 401k’s, retirement accounts, and college savings plans. In this post my goal is not instill fear to you or give you reasons to stay out of the market.

My outcome today is to show you a few ways your savings could be effected in a turbulent market and what you can do to fix it.

With the current amount of fear out there between banks and consumers the movement of money has come to a grinding halt. Everyone is worried about there money and looking to ways they can keep it safe.

2 ways your savings could be effected.

Losing money in the market. This is the most obvious. In turbulent times when markets are down people will fear the market and tend lose money in the market. If you have money in the market you know how this feels when you open up you statement from your 401k and realize you’ve lost a few hundred dollars or more. Now one wants this to happen to them but it does.
Losing money do to inflation. This is what I would call the silent killer. Inflation is the rising cost of goods and services. For example, the price of gas hitting $4 plus for a gallon fuel. This creates a chain reaction which sent almost all other goods and services skyrocketing.

Which way will hurt you the most?

Out of both ways your savings could be effected by this, which one will do the most damage? This is where I wish I could give you a straight answer but not everyone’s situation is the same. Which do you believe effect you more? Let me know in the comments.

Let me give you an example. Lets say you were losing money in your mutual fund and decided to pull your money out and put it into a high yield saving account at say a modest 3.50%. Not a bad savings rate. You put all of your money in that account because you believe 2 things.

Your money is safe and can’t be lost.
You have a guaranteed interest rate of 3.50%

Everything sounds great now, right?

Let’s take a deeper look now. Let’s say there is also an inflation rate of 6%. ( inflation varies but this an example) Well if inflation, the cost of goods and services, is going up by 6% and you are saving your money a 3.50% there might be an issue. You need to earn another 2.50% on your interest just to stay up with inflation.

Even though there is no money leaving your account physically it will eventually catch up to you when you have to fork out more money for your gas, food, and other goods and services you may buy.

That’s why I call inflation the silent killer.

The interest you receive on your account has a lot to do with it. Here a great article that will explain how this works.

So what do you do?

Keep investing. By continually investing money each and every month you will buy more shares at lower prices versus when markets are buying less shares at higher prices. This is called dollar cost averaging. Eventually the market could go back up and with more shares combined with the lower prices you bought them at could give you a higher return on your money.
Don’t put all of your money in savings accounts. If you do this you could end up in the situation I just talked about.
Keep an emergency fund. Your emergency fund is your insurance policy against any personal financial issues you may end up in. Keep a balance approach when it comes to your emergency fund on and what you have invested and have at least 3 to 6 months worth of cash saved up to pay bills and other emergency payments.

Finally, are you worried about your investments? Let me know how you would handle the situation.

Filed Under: Saving Money Tagged With: inflation, losing money, recession, Saving Money

How To Beat The Banks At There Own Game.

September 2, 2008 By Christopher 6 Comments

This rule that will set you free.

I have seen so many people make this mistake trying to get debt free but for some reason they just can’t break away from debts grip. With all the rules about getting out of debt spending less than you make is one that if not followed will never get you debt free.

For example I know people who make $200,000 a year but as a result of spending nearly more than they make they barely break even at the end of the month. It’s always been said that it’s not how much you make it’s how much you save.

Being in financial service you could say I’ve seen it all or close to it. I’ve known people who’ve had 15 plus credit cards, car loans, HELOCS, and whatever else you can think. I have even seen situation where people had so much debt that even if they made all of there payments they still couldn’t break even at the end of the month. So in this article I decide to break things down a bit.

Einstein called this the 8th wonder of the world.

What I am referring to is the Rule of 72. If you haven’t heard of it don’t worry most people haven’t. The Rule of 72 work regardless of whether you know it or not. It can work for you or against you. Here’s how it works.

Take any interest rate you are earning and divide it into 72. This will tell you how many years it will take for your money to double in size.

For example, let’s say you have $10,000 in an account earning 4% interest. If you divide 72 into 4 you get 18. This means it will take 18 years to double your money. Which means your $10,000 would turn into $20,000. Then 18 years after that you would double again to $40,000. Sounds great but it takes 18 years to double your money.

So what would happen if we would get 6%?

72 divided into 6 is 12. Which means it will take 12 years for your money to double. So if you had $10,000 with a 6% interest rate it would double to $20,000 and 12 years after that it would double again to $40,000. Getting better.

Now here is what most people don’t realize. Just by getting an extra 2% interest on your money you will double your money 6 years sooner than if you just got 4% on your money.

So what would happen if you got 8%?

It only gets better from here. If you divide 72 into 8 you get 9. Which mean again that your money would double in just 9 years. Just by getting 8% and not 6% your money would double 3 years sooner and 8 years sooner if you only got 4%.

Now let’s illustrate this. We’ll do another example to help you understand this a little better.

AGE 4% 6% 8%

25 10k 10k 10k

34 20k

37 20k

43 20k 40k

49 40k

52 80k

61 40k 80k 160k

Look at this chart for a moment. If at the age of 25 three people set back $10,000 and earn the three various interest rates 4%, 6%, and 8% what would they end up with if they all retired at 61? The person who got 4% only made $40,000 after 36 years. Then notice the person who got 6% got $80,000 after 36 years. Just by getting 2% more. And finally, the person who got 8% got $160,000 after 36 years. That’s $80,000 more than the person who got 6% and $120,000 more than the person who got 4%.

WOW! What a difference a little interest can make.

Sound great but this can also work against you as well. Lets say you have credit card debt and you are currently getting charged 18% interest. Well 72 divided into 18 is 4. That means your debt is doubling every 4 years.

The big mistake.

The problem is that if you are getting charged 18% interest on your credit cards and you only have your money invested at 4% is it no wonder that most Americans can’t get out of debt. It’s like you’re playing a game of tug of war, but you just can’t win.

How Banks Make Money.

This is exactly how banks make money. Take a look at the chart again. If the bank was charging you 8% on all of your loans combined after 36 years with you paying in on your loans you would have gave the bank $160,000 in interest.

Now, if you had $10,000 in the bank in a CD at say 4% after 36 years you would have $40,000 provided you added no more money to it.

Its pretty simple how the bank made its money. They took your $10,000 that you invested into the CD and turned it into $160,000. Form there they paid you the $40,000 they owed you and the bank keeped the $120,000.

Hardly seems fair, right?

So what should you do?

Two things you should do to get on the fast track.

1. Start paying off your high interest rate cards first. Not your mortgage or car loans.

2. Review where you invest your money. Talk to a financial advisor about possible investments that would be suitable for you.

Just by doing those two things you can easily put yourself in a position to be on the debt free fast track and beat the banks at there own game.

Filed Under: Saving Money Tagged With: debt free, Rule of 72

3 Simple Tips to Save Money Around Your House

August 29, 2008 By Christopher Leave a Comment

In a time when foreclosures are on the rise and the cost of living is on the increase having a little extra doe is well sometimes, hard to come by. Many people are looking for ways to save more money without feeling like they have to change all of there habits or worse make a complete lifestyle change just to deal with the financial pressures.

So here are a few ideas you can do around your home to save a few buck and lighten the financial load a bit.

1. Combine you phone, Internet, and cable TV in to one package. I found this to save me about $15 a month. When I switched my stuff over to a combined plan at first I thought it wasn’t saving me much but before I had switched I had to pay for long distance calls, I only had dial up Internet, and my cable channels were very limited.

But once I switched I no longer had to deal with any long distance bills, I had high speed cable Internet, and I had all the movie channels added to my cable along with a DVR (Digital Video Recorder). Not to mention I had three bills combined into one and paying less all together.

Now, that don’t sound like much but add it up once over a whole year and you save $180.

2. Review your car and homeowners insurance. This simple little idea can save a ton of money. I recently did this myself just last year. A neighbor of mine happened to give me a call and ask if he could stop by and show me a few ways to save on my insurance.

Now, most poeple would be hesitant at this point. Who really likes to talk to insurance agents. Although I have a different view that just taking a look sometimes can save some serious bucks. Now, if your comfortable with another agent that’s ok you can check out his rates too.

By changing those two things around I freed up $25 a month. With an annual savings of $300.

Not only did I save $300 a year but I was also able to have extra coverage on my vehicles, and home.

Not Bad.

I recommend shopping your car and homeowners insurance every 3 to 5 years. You never know if new benifits are avalable or if rates have dropped.

3. Don’t buy gas until you need it. With all the fuss about gas prices going up this little idea saves me the most right here. I simply don’t buy gas until my tank hits “E.”

Sounds odd, right?

But, what I have found is that instead of refilling my tank every week it’s more efficient to wait until my tank is empty. The reason being it saves a lot more money just because your not playing on the impulses of the market constantly fluctuating up and down.

Think of it this way. If you had an extra $100 cash on you for the weekend what would you do? My guess is most would spend it. Face it when you have extra money to play around with most of us will tend to buy things we don’t need. I’m sure you can think of a few things to splurge on.

Well, what I have found out is that the same holds true with gas too. If you fill up on the weekend it will tempt you to drive more simply because you have the gas to do it.

What I recommend to do is fill up on a Monday or Tuesday not Friday and run your vehicles till it is on “E.” This way your tank is not full on the weekend and it doesn’t temp you to drive more.

For example I drive a Chevy 1500 half ton with a V-8 engine.

What a gas hog!

When I was filling up every week I was paying around $60. That was before the price of gas went over $3 a gallon. Today with higher gas prices I drive my vehicle only when necessary to work and back. Doing that I can go 3 weeks before I have to fill up again. Now a tank of gas cost me around $80 and I only fill up on average every three weeks.

Doing this I save $33 a week or $1716 a year.

WOW!

Finally, lets find out what would happen if we would save the difference on this new found money. After the first year you would save a whopping $183 a month or $2196 a year. This could be a good start to an emergency fund, used to pay down your debt, or start that part time business. Whatever you do it’s money you were already spending which you are now saving.

Have more ideas?

Please let me know I would be glad to hear about them.

Filed Under: Saving Money Tagged With: Insurance, Saving Money