Archive for the ‘Saving Money’ category

Save Money By Cutting Out The Extra

January 13th, 2010

More people than ever are trying to save money. According to a New York Times report, more Americans are saving money now than they have been since 1993. People are putting away, on average 6.9 percent of their income. That is a great place for many to start, especially after the financial difficulties of the last few years. But, saying that you will save and putting this act into practice are two very different things. And, they can be incredibly limiting to those who think they do not have any money to put away. You do.

Save Money By Cutting Costs

The best way to save money is to have more money to put away. You could get an extra job (and this is something you want to consider if you hope to build your savings faster.) However, consider the following ways you can reduce your costs significantly and put those funds back into your savings account.

  • Do you work in the same five-mile radius as you live? If so, jump on a bike to go to work and leave the extra car at home. In fact, moving from a two or three car household down to a one or two car household could save you hundreds of dollars in interest fees (if you still have a loan) and hundreds of dollars on insurance costs, not to mention the discounts in fuel.
  • Find your money waster. This is the item that you buy every day or every week that you just do not need to. It could be that $5 gourmet coffee in the morning or the $10 a week you spend on soda at work. Cut it out. Put that money towards your savings. $5 a day savings equates to $150 a month for savings, or $1825 a year.
  • Eat out less. Buy a $30 slow cooker, start your meals in the morning in it and then skip the take out. This in itself can save most families between $50 and $150 a week in eating out. That is money to put into your savings account so that you can take a trip or even just pay down debt.
  • Cut utility costs. When was the last time you called your cable provider to reduce your monthly costs? Have you taken the time to consider bundling your services (phone, Internet, cable) into one to reduce your costs? How about the water bill? you can save hundreds by repairing leaky faucets and reducing shower time. A programmable thermostat keeps the home warm when you are home, but decreases costs when you are not. Unplug those electronics.

One of the biggest money savers is to have a budget. Work out a budget that you can live with and then stick with it. Do not rely on credit cards at all for your monthly costs. Rather, focus instead on a cash only budget. Give yourself money to eat out or for entertainment, but limit these costs so that you can actually be putting money away.

You can save a great deal of money by simply learning how to cut out the extras in your budget. However, to know what those extras are, you need to keep a record going of what you are spending money on. Everything from parking meters to the kid’s school lunches should be part of it. This gives you a clear idea of where your money is going. Then, you can cut out the extra and start saving money.

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Before The End Of Year Tax Advantages

January 7th, 2010

The end of the year brings new opportunities for next year. However, keep in mind that there is more work to be done right now. Some of these opportunities may spill over into next year, too. Taxes are coming. However, if you take a few minutes right now to consider any deductions you may be entitled to, you may be able to reduce the amount of tax you owe to the IRS. This is an excellent way for individuals to save money. In some cases, you are getting more back, too.

What Dedications Can You Take?

You do want to work with a tax professional who is willing to spend a bit of extra time with you right now (and there are many that will) to help you to minimize your tax liability. The following are a few of the tax deductions many people can take. Whether you qualify for them or not is determined through your tax professional.

  • Tally up your medical expenses. However, you do have to reach a specific limit, if you have been putting off a procedure or a doctor’s visit that would qualify, do it now. If you have spent enough on medical costs, you can deduct them. This includes things like crutches, hearing aids, contact lenses, medications and even prescription glasses.
  • Job seeking expenses may be a deduction. Tax code allows for any costs associated with locating a job to be included as a tax deduction. This cannot be your first job out of college and there are a few other qualifications. However, those who have spent a lot on travel expenses or other needs may be able to take advantage of this.
  • The small business owner has plenty of tax discounts available to them. Did you keep track of your mileage for business use? Do you use your cell phone for business transactions? Are you factoring in half of the self-employment tax paid as a deduction? Do you need specialized clothing not suitable to wear outside of the work place? Did you invest equipment into your business? These are all deductions you may qualify for.
  • Deduct gambling losses up to the amount of your gambling wins. You do have to have some proof of these losses to qualify for them.
  • Have you donated significant value to charities? If not, now is the perfect time to do so. Donate that car you do not use. Donate old items around the home. Get a receipt. Do take into consideration monetary donations as well. These all help you at tax time and do help those in need at the same time.

In addition to these tax deductions, do check out your investments. Have you invested as much as you can for the year? For those under 50 years of age at the end of the year, you can contribute as much as $5000 or the amount of your taxable compensation in 2009. For those over the age of 50, you can contribute $6,000 or the amount of your taxable compensation. Both of these go into your traditional or Roth IRA. If you have not contributed enough, now is the time to do so.

Saving money just makes sense. There is no reason for you to put more money into your taxes than is necessary. In fact, now is a good time to access just how much money you are giving to the government out of each check. If you are getting a refund, remember that this is simply an interest free loan you are giving to the government. Adjust your withholdings to ensure this does not happen.

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Personal Finance: Establishing the New Year’s Goals

January 5th, 2010

With the New Year upon us, there are many things individuals and families need to take into consideration outside of the resolutions you may make to lose weight or to spend more time together. Everyone can utilize this time of the year to look back at their financial goals and look forward with new ones. Each person is unique: some want to save more; others want to pay down debt. There may be an important big purchase coming up this year. On the other hand, you may want to think about retirement a bit closer. The New Year brings opportunity. What will you do with it?

Minimize The Crush Of Debt

Beyond anything else, individuals need to focus on their debt. Not only does it physically tax the body through stress, but it is holding you back from living a debt free lifestyle. Consider the following goals to help you reduce your debt:

  1. Spend less overall. Find one way that you can spend 10 percent less of your budget.
  2. Avoid credit cards. Try to use a cash only system when purchasing anything. It will teach you how to be a better saver, too. Make the drastic decision to cut up credit cards if you cannot control spending otherwise.
  3. Pay an extra 25 percent on your monthly payments. Perhaps you are not sure you can do this. Use the funds you cut out of your budget to make it happen.
  4. Contact each of your lenders and request a rate reduction. They may say no, but they may say yes and a yes can save you thousands of dollars over the life of your loan.
  5. Commit to no new credit cards, loans, pay day loans or other debts in the coming year. This commitment to yourself could change your financial future.

Which of these (or all of them) can you tackle in the New Year?

Save More

The second most common goal people have when planning goals for the new year is save more money. Of course, this is a great idea. The problem is, many people do not actually put in place strategies to make it happen. Just saying you will save more money will not help you. Consider the following goals. Which can help you to get more money in the bank?

  1. Take the time to invest in yourself first. If you do not have a 401K or an IRA, or other retirement savings account, find out if your employer offers one. This money comes directly out of your paycheck, has tax advantages and it is not something you need to think about. Did you know you could withdraw from most accounts, without penalty for big expenses such as medical care and down payments on homes?
  2. Focus on the shopping cart. As you walk through the grocery store or department store, keep a calculator in hand. Each item that goes needs tallied as you go. Why bother with this? You are more conscious of how much you are spending. When you see the bill approaching your budget limit, take items out as you need to.
  3. Save more at home. Read up on how to be environmentally friendly and energy use conscious. Find ways to cut costs at home. Is your water heater set too high? Are you using too much electricity during the day? Will a programmable thermostat cut your bill?

Although this is the time of year to be thinking about tomorrow, make sure you put your New Years plan in place today. Write it down. Give yourself specific goals to reach per week or month. As you go along, you will find yourself spending less, paying down debt, and putting more money away so you can achieve your long-term goals.

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Posted in Personal Finance, Saving Money