20 Small Ways to Save Big
How to cut costs everyday
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Part of the Live Solid Guide to Managing Your Money
You've heard of the savings crisis in America. You've probably even thought, 'yeah, I should probably save more.' But eking out an existence is tough on a starting salary and sometimes comfort takes precedence over cutting corners. Besides, if you can only save $50 or $100 a month, is it really worth it? The answer: absolutely.
By starting to save now, you're giving your money -- however
little it is -- time to grow on its own. The magic of compound
interest means that you can contribute less money for fewer years
if you start when you're young and still end up with more cash than
someone who waits.
For example, if Natasha starts saving or investing when she's 25
and saves $100 a month for ten years then lets the money sit, her
stash will grow to $174,928 by the time she turns 65 (assuming an
8% annual return). If Anna waits to until age 35 to start saving,
and socks away the same $100 a month for the next 30 years,
she'll have only $135,940 by 65. Anna will have contributed three
times as much as Natasha, but will end up with nearly $39,000 less.
(See how
quickly your savings can add up.)
This week is America Saves Week, and it makes as good a time as
any to get started. Think you don't have enough money to save?
We've compiled a list of our best tips to find extra money in your
budget to sock away. These strategies won't require you to take a
vow of poverty -- we know money's tight already. Rather, they're
small and simple cost-cutters that'll help you get started saving
as soon as possible.
1. Give yourself a raise and bank it. Boost your
take-home pay by adjusting your tax-withholding and have the
difference in pay automatically transferred to an online
savings account. Kiplinger's tax-withholding
calculator can help you revise your W-4.
2. Enroll in a 401(k). If your employer offers a 50-cent
match for every dollar you contribute, even adding $60 a month will
net you over a grand a year. Plus, you defer paying taxes on your
contributions, so they take a smaller bite out of your paycheck.
See how even small amounts can add
up.
3. Raise your car insurance deductible. Upping your
out-of-pocket outlay from $250 to $1,000 can save you 15% or more
off your premium. Learn more about
how to save money on your car insurance.
4. Pay off your credit card. Carrying a $1,000 balance at
18% blows $180 every year on interest that you could put to better
use elsewhere. See Climb
Out of Debt Faster for help.
5. Go green. Control energy costs with a programmable
thermostat. Prices start around $50, but you'll cut your
heating-and-cooling bill by 10-20%. For more energy-saving tips,
see Your
Energy Crisis Solved.
6. Bundle up. Getting a package of phone, Internet and
cable from one provider can save you about $50 a month. Learn more
about bundling
deals.
7. Use your employer's FSA. Flexible spending accounts
let you pay healthcare costs with pre-tax dollars. If your company
offers them, take advantage and save 33% or more. See Take
Advantage of Tax-Deferred Accounts for help.
8. Get a credit card with rewards. Spending $80 a week on
gas and groceries? Putting it on a card with 5% cash rebates will
earn you nearly $200 a year. Learn how
to get the right card for you.
9. Kick the habit. Smoking is hard on your health and the
wallet. Three packs a week averages $50 a month. Learn more about
how
getting in shape can fatten your wallet.
10. Brown bag it. Instead of spending $8 on takeout every
day at work, bring a bagged lunch for $5. You'll save $60 a month
and $720 a year. Do your own calculation at FeedThePig.com.
11. Negotiate your rate. Instead of paying an APR of 18%
on your credit card, call your issuer and ask for a lower rate. If
you have good credit, your lender might consider it and if you can
provide examples of offers you've gotten from other companies,
it'll strengthen your case. For more help, see Tame
Your Credit Card Debt.
12. Travel on the cheap. Bypass the old trifecta of
travel search engines (Travelocity, Expedia and Orbitz) and head
straight for Sidestep.com, which will search them all -- saving you
money and time. For last minute deals, try Site59.com. And see our
list of the
25 Best Travel Sites for more cost-cutting resources.
13. Insure yourself. Even if your company has a health
plan, you may be able to do better for yourself. Pairing a
high-deductible medical policy with a health
savings account -- which lets you put away pre-tax dollars for
out-of-pocket medical expenses -- can save money on premiums. Shop
around at www.ehealthinsurance.com.
14. Make media free. Dust off your library card and enjoy
DVDs and books for free. If you'd normally rent a movie a week and
buy a book a month, you can cut costs by $30.
15. Change your calling plan. The average wireless-phone
user spends about $60 a month, including taxes and fees. If you
talk for 200 or fewer minutes per month, switching to a prepaid
plan where minutes cost 25 cents a minute could save you $10 a
month. Compare plans at www.myrateplan.com.
16. Park your car. Why pay $25 a week in gas when you
could pay half that to use public transit? Or check out carpooling
at www.erideshare.com and www.carpoolconnect.com.
17. Ditch your gym. Forget the $40/month gym membership
that'll cost you almost $500 a year and check out community centers
in your area. Some may be free or charge a minimal fee such as $100
a year. Or buy a good pair of running shoes and work out the
old-fashioned way.
18. Reshop your auto insurance. Using a comparison site
like InsWeb can
help you determine if you've got the best deal.
19. Learn to cook. Cooking at home saves on your food
budget and it could even improve your dating prospects -- who isn't
impressed by someone who can prepare a great meal? Check out
Nine Ways to Get Ahead for more practical financial advice.
SunTrust is unable to offer tax or legal advice. Please consult with your tax and legal advisors.
© All contents copyright 2009 The Kiplinger Washington Editors
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