While reading Kiplinger today, I came across a great article full of practical advice for all of us who are financially struggling right now. I thought I'd summarize the points (and add my 2 cents) so you don't have to read the entire thing.
Trick #1 Give up your daily latte
-"Forgoing your $4 latte every day, for example, would save you about $120 a month. Investing that money every month for ten years into an account earning 10% annually would net you nearly $25,000. Keep it up until retirement, and you'd have more than $765,000 in 40 years."
(think big picture and long term the next time you drive by a Starbucks....is this really worth forgoing $700k?)
Trick #2 Put your credit card on ice-- literally.
You can pay down your debt a ton faster if you don't add to the balance with daily use. Seems simple, huh? Hide your card so that you won't be tempted to use it.
Trick #3 Use cash for all your expenses.
Once you've hidden your credit card, you won't be able to spend more that you have when you don't have the cash in your wallet.
(I would save a lot of $$ if I applied this concept to my bimonthly Target trips.)
Trick #4 Pay your bills automatically.
You won't forget to pay a bill if the payment is setup to withdrawal from your checking account each month.
(This saves me so much time and worries during the month. I can sleep easier knowing that my bills are taken care of for me.)
Trick #5 Ask for a lower interest rate on your credit card
Did you know this was possible? "A five-minute call to your lender could save you hundreds of dollars on interest charges and help you pay off your debts sooner."
If you have a large balance on your credit card, this could save you mucho bucks as you try to pay down then off the balance.
Trick #6 Put your savings on autopilot.
Many companies (like mine) give employees the option of depositing their paycheck into multiple checking accounts. Each month just have a fixed amount deposited into a separate account used for savings. Before you know it, you'll be RICH.
(Similarly, I'm able to buy mutual funds automatically each paycheck...a portion of my check is sent to a Vanguard account which purchases more shares of my special funds.)
Trick #7 Save regularly for recurring expenses, too.
"If you automatically save a little money on a regular basis, it doesn't take much to build up a good stash for when your big expenses come due. For example, if you arrange for a mere $25 a month to transfer from your checking account into your holiday gift fund each month, that's much easier to manage than coming up with $300 all at once come December."
(That reminds me...I need to start saving for Christmas)+
Trick #8 Set long-term goals with a buddy.
This will help you keep long-term goals in focus. In christian circles we might call this a money accountability partner.
Trick #9 Ignore your annual raise or year-end bonus.
"Expecting a raise this year? Pretend you're not. By keeping your standard of living the same and not increasing your spending with each bump in pay, you can pocket the extra money and use it to reach your goals."
(Brilliant!)
2 comments:
Great info...and you're not even trying to sell us on anything! Thanks for breakin' it down. :)
Great tricks that really do work and are almost painless! Here's another Trick.... With care and ingenuity, couples with two incomes can usually learn to live on one income and stick the other in savings for a special purchase/trip or for a time when you might only have one income (job loss, illness, child raising, etc.).
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