Start with an Ira

The best way to save money is to make a budget and determine exactly what you require to live. You need to know what you owe and to whom. Once you know these figures, you have a place to start your savings plan.

Saving money should be the first thing you do every payday. Whether it is a savings plan your job offers such as a 401K or a 403B or a Roth IRA you set up yourself. This is the first item of business every single paycheck. It doesn’t have to be much, even $5 a week will begin to add up over time.

If you have a mortgage, you should consider refinancing it now that the rates are lower than ever. If you can bring it down one point then it is worth the cost of the refinancing process. You can save several hundred dollars a month on this item alone. This money can be then split between long term savings and short term saving.

Short term savings are a way to pay for Christmas gifts, vacation and emergencies. Everyone needs to have a safety net. Ideally this should be at least six months pay but start with whatever you can.

Look at the rates you are paying on your credit cards, if it is more than 10% call your credit card company and ask for a better rate. It can’t hurt and very often they can lower your rate several points. If you don’t pay your balance in full every month, you need to pay more than just the minimum, even if it is only $10 more.

Try to break the credit cycle. Use your credit cards as little as possible and when you are tempted ask yourself, “Do I really want this enough to be paying for it for 3 years?” If the answer is no, walk away.

Make sure your car is in good running order. If you have a SUV or other gas guzzler consider trading it in for a more fuel efficient car. With the price of gas skyrocketing you just can’t afford to drive around in a car that gets less than 20 miles per gallon. If it isn’t possible to trade your vehicle, consider car pooling or using public transportation if it is available.

Why not shop at consignment stores. They are sprouting up everywhere these days and you can get some very stylish and practical items at much less than retail. It goes without saying that you need to shop the sales racks. Stores like Kohls and Macys have sharp discounts at the end of the season and if possible this is the time to be thinking ahead to next year.

Make a grocery shopping list and stick to it. Buy in bulk if the price warrants it and use coupons whenever you can. Stock up on items you use often like paper towels and toilet-paper  when they are at their lowest price. Consider doing some of your grocery shopping at discount retailers like Walmart and Target, they are often cheaper on some items.

Don’t waste electricity. When you are not in a room turn off the lights. When you are not using your computer or TV, unplug it. Use your washer and dryer when you have full loads and if possible dry your clothes outdoors on a clothes line. Make sure to get your furnace cleaned every year so that it runs efficiently.

Don’t give away or throw away your old or unwanted items. Have a tag sale, send them to the consignment shop or sell them on eBay. There is almost always someone out there who will buy what you no longer want.  If it isn’t possible to sell it, consider donating it to a charity and getting a write-off on your income tax. Never waste anything.

These are just a few practical tips that anyone can use to save money. Be aware of where every penny you spend is going. Before long, these savings will begin to mount up giving you the financial security that you really want and need.