- First and foremost, if your company has a 401K and you are not participating because you think you can't afford to, do it right now. A 401K is the best vehicle available to painlessly save money because it is taken out before taxes on your check.
- Save money for a specific goal - If you want to go on a specific vacation or want to buy something special, start saving a dollar or your change everyday. At the end of the year, you'll be surprised how much you've saved
- Cut out eating out. Some of us do not like to bring our lunch to work (I admit, I hate it. I need the time away from the office) But, if you find yourself eating out for dinner at a nice restaurant more than once a week, consider putting the money you would have used for the dinner into savings instead. And, if you can bring your lunch, you could potentially save an extra $100 a month minimum. That doesn't sound like much, but consider this. I'm 36 years old. $1,200 invested a year in an IRA earning an annual return of 9% would grow to $162,369 by the time I'm 65. Consider how much more that would be with more invested. And, this is just investing money that you normally are just throwing away....
- Lastly, they recommend cutting up all credit cards but one and only use your one for emergencies. However, one point they make that is important is this: If you are paying 17% interest on a credit card with a large balance, put the extra money towards paying off the card rather than into a savings account. Putting money into a savings account earning 1 or 2% while still paying 17% interest isn't getting you anywhere. Paying off high interest cards is the same as saving money.
Thursday, January 04, 2007
How To Save Money On A Limited Budget
HappyNews.com has a great section on their website featuring Money Tips. The one I am focusing on today is "How to Save Money on a Limited Budget". Some of the tips they offer are:
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