May I suggest you try exposing yourself to chance and new discoveries by not buying any new music that costs over $3 an album unless you buy it directly from the band?
Find the clearance shelf at your local indie record store (Streetlight on Market's is in the upstairs back right corner & prices are $1 or $1.95). Check out yard sales & thrift stores.
Sign up for LaLa and turn the stuff that didn't work out into what you know you want.
Are you automatically transferring money to savings or retirement funds every paycheck?
If so, good. It's time to take a look and see how you can do more. Those tips I mentioned about cancelling a service you don't really use (hello gym membership or cable tv you never enjoy or magazine you don't read!) can free up a little cash here. Apply it first to high interest debt or, if you've conquered that - go you!, then increase the amount heading into retirement savings. Don't count on social security; might be there, but, I'm just sayin', governments change...
Even if you're living paycheck to paycheck find a way to pull out $10 and automatically put it into savings. Figure out the things that would save you the most money - moving to a new apartment closer to work, perhaps - or which would help increase your cash flow - a good outfit for interviews and some nicely printed resumes, perhaps - and do that as soon as these special savings allow.
One thing to note is that this does not need to be an ever upward climb; just think about what really makes you most happy and relaxed and continually reposition your world a little closer to getting more of that.
For most people it turns out not to be yachts and diamonds; just a job they like, while living in a place they love, and getting to spend time with people they enjoy. That's not as expensive as you might think, so take another little step closer to it today.
Want to visit that pricy restaurant but it's outside your budget? Don't go for a full meal.
Have a serving of something decent and cheap and then go out for just appetizers at the posh spot. What's even better about this is you can have them at the bar in many places and avoid the wait for a table.
Maybe tonight's a good night to stay home, make some dinner from ingredients you already have or eat up some leftovers, watch that movie that's been sitting around or read a book off that stack you keep intending to get to or play a favorite old game that's been gathering dust.
Without spending, you can have a really nice time and remind yourself of what is good about your life.
"Automatic Minimum Payment"
Check with the companies behind all your monthly bills and see if there's a way for you to have the minimum payment always charged to your bank account or credit card automatically. This will save you from late fees.
Also, while you've got them on the phone, see if you can get your bills by email. This saves paper and gives you the earliest possible warning if a bill amount is in error.
If you aren't already automatically transferring $25 or more out of every paycheck into some kind of savings account, start now!
If you are already, and you aren't living hand-to-mouth, increase the amount set aside by 10%.
This is especially good if your employer has some option that allows you to have the money come out before taxes (e.g. into a retirement account). Some employers will even match these funds. Mmm, free money.
I also set up a separate automatic transfer to a retirement account with another funds management provider, Pax World, because a) I like they way they invest better than the matched fund choices at work and b) diversifying your savings is a good thing.
Bottom line: it's easier to save if you don't have to think about it and it just happens automatically.
Discard the idea that your phone company (or companies if you have a land line and mobile service) and credit card providers will let you know when you are eligible for a better rate.
At least once a year, call them up and ask if they can give you a better rate.
It's particularly helpful if you can tell them the lower rate that a competitor is offering (which you can often find with a bit of internet research if your junk mail doesn't announce it). They will almost invariably be able to match that rate.
Carrying credit card debt? Been a customer of that bank for a year or more?
Give them a call and ask if you now qualify for a lower rate. If you can cite other rates you've been offered recently this may help.
They may also offer to give you a very low rate if you transfer other debt to them - sometimes you get blank checks in the mail for this. Always check to make sure the rate isn't for a shorter term than it will take you to pay off the money and that it doesn't then switch to a higher rate then you are paying now.
My personal philosophy is to stick mostly with the bank that gives the best service (for me, Wells Fargo Visa, who I've been using since 1989) and who put the least advertising in their bills (unlike those cheeseballs at Direct Merchant Bank with their damn Lillian Vernon catalog-like ads printed on flaps attached to the dang envelopes. No, I do not need a cheap plastic rain guage). I will occasionally make forays out to other banks to take advantage of special offers, but now that I've been a customer for so long and have a good history, Wells Fargo will often match deals. Never hurts to ask.
Those of you affected by the U.S. tax day who have not done your taxes, do them today. You don't want the horrible frenzy next Saturday and the driving in the line of cars to post your return. Just get it out of the way.
Everybody else, today's a good day to take a look at where your money is going. Are you going deeper into debt or paying it off? How's your tax withholding? If you had to pay out a huge amount at tax time and your income hasn't changed much, then maybe you should increase the withholding to spare yourself the scramble for the money. Got a huge return? How about lowering that withholding and setting up an automatic transfer of that cash difference in each check into a retirement account - you won't feel the difference throughout the year and your money will be earning you interest.
Some tips:
- Balance your checkbook & credit card statements every month. Not only will it keep you aware of any trends in the flow of your money, it will also mean that you can catch bank errors or identity theft while there's time to do something about it.
- Pay off your higher interest debt first. Make minimal payments on the rest and put as much as you can towards those big bad boys.
- My financial security rule of thumb: if you are carrying debt with over 6% interest, you should cut optional expenses to the point where you can make significant payments on it every month. Try for 10% of the current amount remaining this month if you can and then keep paying that amount. That will rid you of it within a year.
- Even when you're paying off debt, set up an automatic transfer of $25 into savings every payday. If your company has retirement contribution matching, take advantage of it.
This tip is probably only relevant to city-dwellers, but even those in the country should mull over just how much vehicle they really need.
How much do you spend on car payments, repairs, insurance, parking and tickets? The average is about $500 a month.
I took a look at that number and thought about the hassle of driving, parking and protecting a car in the city and opted out.
I could rent a car every weekend and still come out ahead, but what I've found is that I don't really need a car very often. I have a membership with City Carshare and use it between zero and 3 times a month usually. I take a cab an average of once or twice a week. Otherwise, I walk, take public transit and carpool with friends from work.
I save money, get exercise, avoid stress and dramatically reduce the impact I have on the environment.
What would your life be like if you lived in a vibrant neighborhood where you could walk to shops, restaurants & entertainment and if your commute gave you time to read, catch up on email or just stretch your legs?
For all that talk about cars helping us stay connected and giving us flexibility, I've found quite the opposite to be true: I'm less isolated and more free without a big metal box on wheels.
About to go shopping? Think about whether all of it really needs to be brand new.
Sure, you don't want hand-me-down underwear or food, but a winter coat? a dining table? a breadmaker?
Get familiar with your local resources. What kind of things do the different thrift stores have? Are you in a Craig's List area? Does your community have something like a "pay-and-take" where unwanted goods can be exchanged?
Don't forget to ask your friends and family! Maybe someone has just what you need languishing in a closet and will give it to you, sell it cheap, or swap.
Comparison shop between new furniture and antiques. My Ikea office cabinet and my beautiful 1920's armoire weren't really very different in price, but the latter gets much more active use in its place of honor in the living room.
Whatever you settle on, remember that you have a lot of options beyond what gets advertised.
In my time I've had memberships to super huge warehouse stores. Costco is something of the archetype for this, but there are other similar places where one gets "great deals" by buying in larger quantities.
I always find, after the initial glut of buying lots of things for relatively less money, that I'm overall spending more than I would shopping at neighborhood stores - even non-chain ones - and ending up with things I don't really need or more than I can use.
What's even sillier about it is that I wind up buying not quite what I wanted - different brands, other flavors, higher calories - because the selection is more limited.
Take a good hard look at your shopping habits and the kind of eating habits they're leading to. Try taking a month off from the big box stores. Shop locally, get more fresh fruit & vegetables, pick out ingredients to cook with or make a sandwich for tomorrow's lunch instead of a frozen entree. Visit the farmers' market and find the nearest good bakery to your house.
At the end of the month see how you feel, what you're eating and what you've spent. Chances are pretty good that the delicious organic produce that's giving you loads more energy has been easily paid for by not having bought a boxed set of DVDs for a show you liked when you were 12, a five-attachment cordless drill, and a pair of ill-fitting orange sneakers with totally cool treads.
Gas prices, including natural gas prices are very high and not expected to change much for the better. That means your utility bill is probably rising.
Save yourself from a nasty surprise on the bill after a particularly cold month by doing some no cost and low cost changes to reduce your energy use. Lowering thermostats somewhat, using appliances more efficiently, and putting in a low-flow showerhead can all help. Find out more from your utility company. Mine provided this PDF file of tips: 123 Gas Savings.
Instead of a bill $50 higher than normal wouldn't you really rather have a nice dinner out or go see a show?
Back on January 4th, I recommended "If you don't use it, don't pay for it".
So, it's been over two months; are you really using the things you decided to keep paying for?
I reduced my Netflix membership to two videos at a time and thought that would be enough of a change to bring me back into a reasonable budget for my video entertainment.
The two videos I have on my shelf right now arrived on around January 19th. Apparently, no, I really don't need this membership. Time to cancel (or at least put the account on hold for 3 months since Netflix offers that civilized option, ever so handy for those of us with 499 items in their possible rentals queue).
Now that you're focusing on what you want and don't want in your life, there are probably some things you'd like to save up some money for. It can be hard to do that, though, if you find that you never seem to have extra at the end of the week.
Take a look at what you have to spend each month (rent, bills, payments to reduce debt, groceries) and what that leaves you for flexible expenses. Assign yourself an amount that you get to spend each week (or fortnight or month) on optional things.
Take two index cards. Tape the cards together on the long edge. On the inside left, write the list of things you want to be saving up for and the amount that will take. On the right, put the amount you have assigned yourself as available for optional things.
EVERY non-essential purchase should be entered and deducted on the right. Before making a non-essential purchase you'll see your wishlist and think about whether it's really worth it. You'll also get a clearer picture of where your money goes.
For example:
$200.00
- latte & croissant $4 $196.00
- new TMBG album $17.50 $178.50
- pizza & beer with pals $20 $158.50
etc.
What do you shell out money for every month? Sure, rent or mortgage, utilities, food, but what about non-essentials? Take a look at your routine expenses and the time you spend enjoying the results of them.
How many hours do you watch those extra cable channels? What's does that mean you pay per hour? Do you still plan to be spending that much time that way or are there other things you'd do if the temptation wasn't there? Do you read the paper every day? Is it worth the subscription? What about the magazines you get? And that gym membership? Are there free exercise methods you'd use just as often?
It doesn't matter if it's a small expense, if it's not giving you a benefit you find useful or beautiful, then stop spending that money. Save it or spend it on something that matters to you more.
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