There are two ways to approach saving money. The first approach is for younger people who are just getting started in their earning years. The second approach is for people whose lifestyles are well established. For people just starting out on their own or willing to try a new lifestyle, consider the following ideas:
1. Consider value when buying a home. Carefully consider what you want and need in terms of living quarters. Mortgages and rents are the biggest expense for the average person or family and you will have these expenses all your life. Think about what you really want from a home, condo, or apartment.
When you are making decisions about living quarters, functionality is king. If you have a large family you need space, if you are single you might be comfortable in smaller quarters. If you are trying to save money, forget about keeping up with the Jones’ when you buy your home. You can have a very nice home without doing that. Focus on value, functionality, and comfort-not status.
2. Buy a car you like but can afford. You want to be comfortable in your vehicle. Like a home, a car is an extension of your personality. You want it to say something about you, but you don’t want it to scream, “You can’t afford me” when you write that monthly check. Again, forget about keeping up with the Jones’. Your bankbook will thank you down the line. And don’t buy a gas guzzler!
3. Study the costs of utilities before you purchase them. If you get this right from the start you’ll save a little money every month. There are so many packages for telephone service, cable, satellite, and Internet services these days it can make your head spin. That’s just what they want. Take the time to find suitable packages that meet your needs but cut your monthly costs.
4. Develop a budget you can follow. Track you expenditures every day for several months. See where your money is going. Most people spend more on gas, food, and entertainment than they do on their mortgage every month. You have to know where your money is going before you can focus on what costs you want to cut.
5. Don’t buy so many groceries! I know so many people who have their cupboards filled with junk that they have never opened. When they go to move they have to move their food! I like variety as much as the next guy, but if you have to move your food you are wasting money. Eating is a pleasure but let’s not get carried away. You can save money if you put a leash on your appetite.
6. Stay home! Most of us really enjoy going out to dinner or a night on the town. We all need that once in awhile just to keep sane in this wacky world. But what you don’t need is to blow money every other night at burger joints or worse yet expensive restaurants. And when you go out, do several errands at once. It will save you gas which has become outrageous!
7. Don’t spoil your kids. Show some discipline in spending. Get them something cool once in awhile but teach them the value of a dollar. Put them to work and see if you can get them to make some money instead of spending all yours.
-For those of you already settled in the American dream with your home and favorite car, you need a different approach because you have to integrate money saving tips into a lifestyle you probably won’t compromise. These tips will suit your lifestyle better:
1. Make sure you have a very good estimate of the net income coming into your home on an annual basis and the amount that is flowing out on an annual basis. Track it closely for six months if you have to and estimate the rest of the year based on the first six months. This will give you a great starting point to control spending.
2. Follow a written budget and force yourself to choose when making decisions as to how you will spend discretionary income. Most of us can’t have it all. Save a little money by spending moderately on things you enjoy instead of wanting it all, all at the same time. Keep in mind that gas, grocery, and weekly entertainment costs over a one year period often outweigh the annual costs of an average mortgage for the average single, couple, or family. Gas, food, and fun are three areas where there is room to move in terms of reducing spending.
3. Cut down your driving and save gas. You can spend as much money on gas as you can on food these days. Combine your trips. It looks like the days of “cruising” around in your car are gone for good.
4. Cut back on the extras at dinner. When you dine in a fine way, look out for the alcohol. Drinks can really run up that already hefty bill. And skip dessert. They get you there too. Grab something sweet at home or crack open a cold one.
5. Reduce the number of vacations you take and the dollar amounts you spend on each vacation. Take shorter driving vacations to save on airfare, and if driving long distances, consider flying instead. Sometimes flying is actually cheaper. Stay with a family member or friends to save on hotel bills. Some of us don’t mind staying in a hotel that is not the absolute top of the line either. You don’t always have to have the very best hotel. Look for nice places that are a value.