Whether there’s an unexpected job loss, the washing machine goes out or you can’t take your eyes off of that snazzy pair of shoes – having extra money saved is always a good idea. Below are a few tips to help you save more money for wants and needs.
1 Begin a savings plan – In today’s economic climate, people are looking for new ways to save money and clean up their finances. While the biggest savings come from paying with cash, the key to saving is to set reasonable goals. A good approach is to start with a few things that are easy to fix to make sure you stick with the program.
2 Make savings automatic – Try putting just $50 a month into a savings account at the beginning of each month. At the end of the year, you will have $600 in savings, not including the interest you accrue.
3 Shop around for insurance – Home and auto insurers change their prices based on their claims experience. The insurer who was your best bet two years ago may not be such a good value later. Spend time researching other insurers to see if you can get a better deal. Also, having the same carrier for home and auto insurance could result in a package discount of up to 15 percent.
4 Adjust your tax withholding – Most Americans pay the bulk of their annual tax bills via payroll withholding. Through this process, a percentage of your earnings is taken out each pay period and sent to the Internal Revenue Service, where it is credited toward your final tax bill. According to the IRS, in 2011 the average tax refund was $2,913. That’s $242 a month. If you’re getting a big tax return, it means that you’ve given Uncle Sam free use of your tax money – without receiving any interest. The best course, tax experts say, is to adjust your withholding exemptions so your tax payments match your actual tax liability.
5 Pay with cash instead of credit – Since the late 1970s, studies have shown that credit cards entice people to spend more than if they used cash. While it’s hard to determine how much you might actually save, paying by cash guarantees you won’t pay interest charges on a revolving credit balance or overdraft fees on your debit card.
6 Turn habits into treats – Whether it’s a daily cup of coffee or going out to dinner, these habits are costly and can add up quickly. If you make your habit an occasional treat, you’ll appreciate it a lot more while saving money.
7 Boost your 401(k) contributions – For most taxpayers, investing in a 401(k) is the best way to lower taxes and build a retirement nest egg. If you’re among the 51 million Americans who participate in a company 401(k) plan, you can contribute up to $17,000 in 2012, up $500 from 2011. If you are 50 or older, you can stash an extra $5,500 in catch-up contributions, for a total of $22,500. Roth IRAs are another great option for anyone interested in tax-free retirement income; they are particularly good for young workers who could benefit from decades of tax-free growth.
8 Change your light bulbs – Saving energy not only helps save money on utility bills, but it also helps the environment. Replacing one regular light bulb with an approved compact fluorescent light (CFL) bulbs can save $30 in energy costs over the life of the bulb, and CFLs last up to 10 times longer than standard incandescent bulbs.
9 Buy in bulk – When buying in bulk, savings can be hit or miss. However, research has shown consumers who make a midweek “fill-in” trip to the store buy twice the number of items they had intended. Some nonperishable items you should buy in bulk include toilet paper, alcohol and vitamins.
10 Take care of yourself – More company health plans are paying employees to get healthy. If you quit smoking or promise to exercise at least once or twice a week, your insurer could give you a break of $50 to $500, depending on the company health plan.
