Thursday, January 04, 2007

How To Save Money On A Limited Budget 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:
  • 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.
If you're in financial trouble, make 2007 the year you decide to take control of our finances. Good luck and make it a great day!


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