Tip-Jarred: How to save money without breaking sweat

From consolidation to cutting expenses, everyone is trying to save money.

Saving money is unique in a lot of ways, mostly because everyone wants to do it, few are good at it, and there really isn’t any way to get around the fact that having it is going to make your financial future brighter and, in turn, easier to manage.

And that goes for simple, day-to-day expenses or the much anticipated retirement.

Simply put, everything revolves around saving money.

And with good reason: you have to budget your money, make sure you’re spending less then you make (a fact lost on most of us) and that your planning of how, when and why your money is being put into play is constantly questioned and can change on a whim based on your financial need.

But why do you tend to make saving money so hard? Is it because we want things we can’t afford or don’t need (vacation, abundance of clothes, second homes, etc.) and we decide that we’d rather have them and borrow money we don’t have to ensure that these things are taking over and our financial goals of saving and securing retirement funds fall by the wayside?

The truth is we make money, saving it, more difficult then it needs. The truth of the matter is your budget and how you look at money needs to start with a stripped down budget and a not being afraid to cut as needed.

You can save money by doing one of the two things: cutting expenses or increasing income. Both can be done without much heartburn if you know where to look. The two biggest money pitfalls are food and unused goods or services. The food one is easy, as many eat out at restaurants for lunch or dinner on a weekly basis, yet we can still spend hundreds of dollars a week at the grocery store. Seems like we’re double dipping on that line item. Taking the time to meal prep and pack lunches is going to save you thousands each year.

As for the unused items, look around your house or consider the services you employ and never use. Gym and tanning spa memberships come to mind immediately, as well as things such as cell phones and cable television. Your phone and cable (with internet) is likely costing you upwards of $300 per month, when a Netflix account and a phone on a lesser, yet reliable network (Sprint, T Mobile, Boost, etc.) is all you’ll need to cut that previous bill in half.

Saving isn’t about working your fingers to the bone at five jobs but more about knowing your financial limitations and not being afraid to save when you least expected it.

Spend Undone: Bad spending hurts your debt situation

Do you know how to spend correctly?

Now, the definition of “correctly” is what get most of us in trouble when you’re talking about debt as some might deem that sports car a correct way of spending, while others think of more astute and more intelligent ways to spend their money, such as that pesky 401K contribution or setting aside five to 10 percent of every paycheck into their savings account.

Bad spending can be identified as what not to do with your money or habits that are going to lead to a lack of money saved or a financial standing filled with debt, among other money faux pas that could be in your not so distant future.

The first rule of thumb when it comes to spending is to actually know what you’re able to spend, and that starts with a budget you actually follow. Otherwise, you’ll be making the one mistake that the majority of people with a plethora of debt do: spend more than you actually make. That means quite simply if you spend $2,000 per month and make $1,700, you’re operating at a deficiency.

As obvious as that should seem, a good portion of the population resides with more than $20,000 in debt on average (per household). The reason most spend this way is because they live beyond their means, and budgeting is something that sounds good in theory, like when someone knows that their car payment is due “around” a certain date, but actually isn’t being practiced the way it should.

Bad spending could also be considered the kind of spending that is done with money that isn’t really even yours. That’s not to suggest theft by any means, but more along the lines of spending money on vacation and charging it on a credit card. Or using that same plastic to charge your way to a new work wardrobe or, even worse, using credit to pay your bills, a sign that again, budgeting isn’t your strong suit.

Debt is meant to be paid in an orderly fashion, so borrowing more to pay off debt is spending that is a totally neutral or lateral move. Now, if you want to lower an interest rate or consolidate so that you only have to pay one payment, so be it. But if you’re paying credit card debt with opening another credit card of the same ilk, you’re not going to get ahead any time soon.

So what exactly is “correct” spending? The kind of spending that allows you to have what you need and put the wants on hold or at least prioritized when you actually have the money.

Credit Guard: How to know when to use your credit card

One of the age old adages about money and how to spend it centers on credit cards, more specifically when to use them and when not to.

As much as we debate this topic, the answer is fairly clear cut when you consider credit cards, interest rates and duration, along with debt to income ration and having the ability to pay off what you borrow in a short amount of time.

Credit cards essentially are a short-term fix, something that you want to use as a last resort and only for emergency purposes. Ironically, you should be using your own money for emergencies from that savings account or proverbial nest egg, but that isn’t always an option since more than half of the population doesn’t have a savings account.

That said, credit cards can be used in a pinch, for car repairs, home fix ups or medical issues, things like being off work or braces for the kids all at the same time.

When using a credit card, you have to consider that the interest rates on most cards is high, particularly department store cards. You want to steer clear of using a credit card and not being able to pay it off within 30 days. The trick is learning how to manipulate those highly marketable store cards when they offer you a certain percentage off what you buy if you open a store card. That is best for you if you can get the money saved and pay off the balance as soon as the first (and only) bill comes in the mail.

As you would expect, you should never use credit cards for things that are whimsical in nature or that aren’t tangible. For example, you never use credit cards for such events as vacations or to buy concert tickets or really anything entertainment related (again, unless it’s to get free bonus miles or points and pay it off as soon as the bill arrives).

If you are thinking about home repair, think home equity or another means of financing that isn’t credit cards. Plenty of flooring, roofing companies or even bigger box stores offer you special financing for these types of updates and upgrades to your home, so paying 21 percent interest on a Visa card is asinine when you consider other alternatives make more sense.

Credit cards aren’t evil, until they’re used for all the wrong reasons and you end up spending not only what you intended to purchase but the interest that compounds on top of it all.

Needless Spending: How to save on perks you don’t need

Saving money, for most people, is about giving up what they want and need, but more so things that you’d consider perks.
A perk, quite frankly, when it comes to money is something you’re spending on but you really don’t need. A lot of that opinion is in the eye of the beholder, the one who is making that decision more so than an outsider.
For instance, if you have more than one job, and that second job interferes with your ability to do yard work, then maybe giving someone $30 or $50 per week makes more sense rather than skipping an eight hour day of work that pays you $80 to $100 for the day.
Mostly, however, a perk is pretty easy to spot and being able to cut it means that you’re serious about saving money and that you show you can live without a want and focus on just the needs until you have money saved or can start to piece together that elusive savings account that the majority of people don’t have.
Aside from the aforementioned yard work that could easily be cut (if it makes sense financially), you might also want to cut out things like a coffee every day, lunch out at a restaurant or fast food place or even that bottled water you’re buying, when a $5 plastic water bottle and free fillips at the tap are going to save you hundreds.
The biggest missteps is paying for cable in general or other antiquated items such as newspaper subscriptions or landlines. Cable companies love to package together cable, phone and internet and give you a nice bundled price that last for six months to a year, and then the price hits the $200 mark rather quickly. Cutting cable down to just internet, while you add streaming services for $10 per pop will have you paying 50 percent less for “cable.”
No one reads newspapers or magazines, yet you’ll still spend a decent amount of money on those subscriptions as well.
One of the bigger perpetrators is the neighborhood, friendly gym or the high end corporate training facility chain club. Either way, if you’re not going, you should cancel that fee immediately or why not take advantage of free classes, or just walking outdoors. The $35 or $40 per month gym fee not being used means you’ll be saving nearly $500 per year, when the stroll outside or a resident Zumba class for a few dollars might be just enough to suffice you exercise needs.
As much as perks can be viewed as items you can’t live without, you need to see it more about adjusting and keeping what you want, only minus the price tag.

Credit Downturn: How credit woes are holding you back from borrowing

 

When it comes to money, few things hurt quite as much as hoping to buy a car, a house, do home repairs or anything that would require you to get a loan, only to be turned down with extreme prejudice for a variety of reasons, namely your credit just doesn’t cut it.

Fixing your credit can start with the obvious: pay your bills on time is the easiest and most overlooked ironically piece of credit score monitoring you can do, whether that’s setting up automatic payments or just having a budget that is mapped out so you know what you owe and, most importantly, when it is due.

But sometimes paying in time isn’t enough, as there are other credit woes that are leaving you lacking in the eyes of lenders, as you’re just not cutting it as a safe borrower, one they can trust to get their money back in a timely or orderly fashion.

One element of your credit that can keep you down and truly out is having too high of a balance on a card that only carries so much in the way of a ceiling. For instance, if you have a $5,000 credit card limit and you owe $4900 on that card, your debt to ceiling ratio is going to be frowned upon, essentially telling lenders you max out cards and have little wiggle room in their eyes as it relates to how hard you push your debt to what you can afford, actually.

Your credit score also takes a beating when you apply for a ton of credit as every “hard inquiry,” meaning that you’re applying for one and not just checking your score, leads to a lower total when it comes to credit.

Finally, credit is only as good as the set of eyes that is watching it. If you expect someone to fix your credit or look for issues or mistakes, you’re asking far too much. Sure, you can implement and employ services that are going to watch your score and make sure nothing slips past as far as unusual activity, but you should also be the main person watching your credit score.

Mishaps or credit issues that aren’t of your doing can hurt your score, The average of 1 mistakes for every five consumers is a number that should alarm you into believing that your score isn’t impervious.

Nothing defines a person quite like their credit score, and being able to control it starts with paying attention to what you’re buying and just how much you’re using your credit versus what you actually have available.

Smart Money: How to save in ways you never thought possible

Some will argue that saving money isn’t about spending less or even having a budget that works. Instead, they like to think that they’ll always have a leg up on the saving money mentality simply because they never stop looking for ways to make money.

Of course, you have to have a budget that takes into consideration how much you make and quite simply what you spend as far as expenses. If you’re obviously well over your expense amount versus what you’re taking home, then revenue streams are a moot point.

But if you’re someone who has budget carefully but wants to save more than the amount that is showing in the black, you’re always going to be on the prowl for paying a little more on those credit cards, putting a little more into your savings account and just having that peace of mind that a few hundred dollars can go longer than not having anything at all.

Most assume that making extra money simply means getting a second or even third job, but that isn’t always the case. You might have extra money just lying around and if you’re not adept at seeing it, you might miss cash on hand.

Think about your at home electronics (or even the on the go ones) and you’ll see a boat load of money that can be used to pay bills or put in your savings account. Your old cell phone is just asking to be traded in for cash, and the same goes for old PC’s, tablets and anything else gadget wise that might be considered outdated by those who have to have the latest and greatest but could be seen as valuable by others, yourself included.

When you talk about extra money and the idea of getting another job comes into play, you want to work smarter not harder. All the rage these days is becoming a driver part time and making your own schedule (Uber comes to mind immediately). That, coupled with other making money ideas, should adhere to your schedule, such as being a freelance writer or babysitting a neighboring child so you can walk to work. Furthermore, making money can be just about not spending double, and the easiest and most obvious example are those individuals and families that spend money on groceries and yet eat out at restaurants as well. Why not take the time to meal plan, rather than have that food sit, while you spend $20 on a dinner for one and up to $50 for a family of four.

No one can argue that saving money can be difficult but that doesn’t mean you can’t keep you eyes wide open for even the smallest way to earn just a little more

Retirement Fun: How to save when you’re behind

Preparing for retirement is something we all think about, no matter if you’re 30 something or in your 50s, but the latter demographic tends to think a little longer and harder since calling it quits at work is much closer and at the forefront of their mind.

That said, being a 30 something should signal that retirement comes sooner than you think, and that saving starts from the moment you take that job and you’re asked if you want to pay into some sort of retirement fund, and you decide to jump on it, versus the alternative of letting free money (company match) fall by the wayside.

But those who are in their 50s tend to fret a little more than the 30 something crowd, particularly if you’ve been saving (or not) and are close to retiring but need one last gasp to get to the dollar amount you want and need in order to feel comfortable leaving work once and for all.

Those who want those extra dollars for retirement start by focusing on one huge elephant in the room, and that is paying off what should be very little of your mortgage leftover.

Those payment turn quickly into money saved, and that fact can’t be undersold when you are talking about heaping amount of money in your pocket for retirement.

If you aren’t in a position to pay off your home, consider downsizing your living area, perhaps selling your home for the last five years you plan on working and taking a $2,000 mortgage and turning it into a $800 per month rental in the form of an apartment. That, over the course of five years, means $1,200 per month in your pocket or $72,000 in that time period, for some an entire year of salary.

And as far as that work retirement plan, 401K or IRA, you might want to rethink your contribution there in relationship to your budget at home. That means increasing how much you’re putting toward your retirement and cutting expenses on your budget currently. For example, maybe that $200 per month for cable can be better served going into your retirement account when you change your contribution from the bare minimum, let’s say four percent, to eight percent. Yes, that’s more out of your paycheck but consider where it is going and that you might not miss cable all that much when you’re able to retire at 55 or 60, exactly as planned and without reservations that money is going to be a problem.

Save Bet: Some saving money tips are simple

Anyone who has ever tried to save money knows just how difficult it can be. But why is it so easy for some?

When you talk about “easy,” you have to put that term into perspective. “Easy” might be defined as someone who has money, and the rest of the world sits back in awe and wonders just why you can’t be the same way and how they did it with what seemed to be effortless.

The truth is those who save money with the greatest of ease aren’t supermen or superwomen, but rather have the whole saving money mindset with everything they do, and everything they buy or how they track both of those items.

It begins and ends with a budget, but beyond that they know how to save money in ways that aren’t difficult but common when you dig a little deeper than surface saving.

Food, surprisingly, is a cause for concern and one of the main reasons why you can’t save money. Ironically, it’s one of the easiest ways to save when you start to think about it.

First, you should be planning meals ahead of time and shopping accordingly. The biggest downfall as it relates to saving money and food is that you’re not necessarily overpaying but you’re paying twice.

You’re spending hundreds in groceries, and if you’re not thinking about your meals, you might end up throwing food away and losing hundreds via your garbage can. Furthermore, if you’re eating out at restaurants on top of the groceries, you’re planning and buying food in a store and also out, so what happens to the food in your fridge if you keep eating breakfast, lunch and dinner outside of your house.

In addition to saving money by not eating out, another simple way that the smart money managers use is their acumen and ability to cut out of their budget and modify accordingly. They may cancel cable in exchange for streaming, or make date night an actual night and not something that occurs every single weekend.

They’ll forgo the Starbucks in favor of Maxwell House, and they’ll buy their clothing in the offseason, such as that winter coat in April or the swim trunks in September.

No matter how you slice your savings, you can always do better. The once who do it best are the ones that look at it with a sense of casual common sense and no urgency, just in a way that is cool and calm, while of course they collect that extra money to save.

Money Mistakes Run Rampant when you don’t Budget

The term “budget” is overused considerably by the masses who act as though they have their money allotted in all the right places when in actuality they’re making one financial mistake after another.

Case in point, ask yourself not so much if you have a budget but if you actually track your spending and stick to what you have on paper. Remember, your budget is only as good as your tracking method and often certain line items get left off your list because they’re not main points of payment like your car and house.

That daily cup of coffee or the movies you rent on cable through your DVR box once a week for Saturday date night don’t fall under an entertainment or food piece of budgeting that goes unnoticed, when in actuality they add up considerably.

Your spending also tends to become more difficult when you ironically can’t spend at all. A budget needs to be looked at as though you actually have the ability to spend money, and if that means cutting back on other expenses, then so be it.

If you need to build in a budget item that allows you to buy shirt once per month or a DVD, that shouldn’t be off the table. You have to be able to enjoy your income and so if cutting cable television or lowering your phone payment is the alternative to being able to take a vacation or go to the movies, that’s the give and take that budgeting has to take.

Budgeting also means you have to have your savings account in mind or putting aside that nest egg that we all need when we move toward retirement. Again, it goes back to looking at the entire scope of your income versus your expenses, and getting rid of the latter in spots where you can turn spending into saving.

And far too many people look at budgeting as something they have to do, not a beneficial tool to save money the way it is intended to take place. Budgeting needs to take on the perspective of a means to secure your financial future, to still enjoy life and live comfortably within your means, rather than depravation and deciding between what you can and can’t have.

Budgeting is about what you need to survive and what is expendable, and not so much living in the moment but realizing one day after the next is a balance between how to save money and spend the right way.

Line by Line: Why exactly can’t we stick to budget?

How often do you hear someone clamor on about just how easy it is to stick to a budget?

In the simplest form, the budget is nothing more than tracking what you spend versus what you make, plain and simple. Budgeting really is not made to be complicated but truthfully taking your expenses and making sure that number is less than what you make, whether that means cutting your cable cord, saying so long to your data plan or eliminating that shopping spree you’ve allowed yourself to enjoy on a regular basis at your favorite department store isn’t quite as simple as some make it.

Yes, you can just go ahead and start hacking away, and that can get you so far, but what if there isn’t enough money coming in as far as income goes? Can you really begin to even contemplate saving money if you’re not making enough to pay even the essentials? At that point, the budget process is tossed aside quickly and with extreme prejudice and you instead decide to scrimp and save where you can and simply wait to pay bills when you have the money, which leads to lower than average credit scores and a reputation that lenders don’t exactly love to see.

Another budget breakdown that you often can’t account for are expenses that you really don’t take into consideration. That two a day coffee habit, stopping for lunch every day and spending money on something as simple as a newspaper or candy bar can lead to thousands of dollars spent per year and even as much as hundreds per month. Ask yourself, how often do you eat out at restaurants, is it breakfast, lunch and dinner some days, and if so, do you realize that accounts for nearly $500 per month in added expense?

When a particular bill or expense, like a gym membership or cable, goes up due to rate hike or added services, do you pay attention to that? Do you adjust your budget? Chances are, you don’t.

Not sticking to a budget is nothing new, but it also isn’t beyond the realm of expectation to not have one at all simply because you haven’t the slightest idea where to start. Sure, a budget can be set up rather easily but staying the course and examining it beyond the norm or not taking into consideration a lack of income or literally all the purchases and expenses you have daily is going to translate into a lot of effort and very little results or outcome as it relates to being able to save money or plan financially for any sort of future.