How to Save When Money is Tight

During this recession, it is necessary to cut a few corners and tuck away a few bucks. Instead of using the economic downspin as an excuse, look at it as an opportunity to access, and correct, you spending habits. Here are some tips on how to save when money is tight.

Difficulty: Moderately Easy

Instructions

1. Forget about keeping up with the Jones’s. Many American’s fall into the trap of living the “American Dream” or “bigger is better.” It is this mentality that has put us into an economic down turn. Instead of making it your mission to one up someone else, realistically decide what you want and need.

2. Realize the difference between your wants and needs. Go through your finances and honestly look at the difference between the two. A need does not include a $500 pair of designer shoes or a weekly manicure. A need does not entail a luxury vehicle or a Mexican cruise.

3. Set a budget. Break down what you owe for your mortgage or rent, healthcare, car payments, insurance, utilities, groceries, and any outstanding debt. Earmark where your money will go.

4. Tuck away 10% into a savings or retirement account. No matter how dire your financial situation may seem, it is necessary that you start a retirement account. Match your work contributions, and if your work does not set money aside, be sure that a portion of each check goes into this account.

5. Analyze every bill. Many companies charge extra fees, which are unexplained. When looking over my bill for garbage and sewer, I realized they were charging me for a “family” size trash can. My asking them to replace it with a smaller can, I cut my monthly bill in half.

6. Pay off your debts. It may seem counter productive when you are trying to save, but my whittling away at debt you will save thousands in interest payments. Pay as much as you can each month, starting with your highest interest credit cards.

7. Call your creditors, explain your financial situation and see if they will eliminate past interest or lower your APR. A few years ago, this may have seemed ridiculous, but companies want to get paid, and are willing to work with you.

8. Negotiate outstanding medical bills by calling the offices. Insurance companies normally pay a small portion of what your doctor would normally charge. Ask if they will work with you to eliminate debt. Most offices will give you hefty discounts as long as you ask.

9. Renegotiate existing policies. My car insurance sent me a letter stating that because so many clients were leaving in the current economic crisis they would be willing to renegotiate terms. Call your cell phone and ask them to review your phone records and suggest better plans to fit your budget.

[eac913]

on 10/6/2009 Great tips on how to save when money is tight. I am going to follow-up with my insurance company. 5*