How to Save Money in Today's Economy, 10 Ways

Saving money is complex. It is not just about controlling expenses and being more rational; it also requires you to place your money where it will do the most good. There are few financial analysts who deny that the dollar is under pressure, so investing abroad is important. Preparing for future inflation is far from irrational. When planning out your financial future, go from the most general ideas to the most specific actions that can both save money and put the money you have to very good use.

Difficulty:

Challenging

Instructions

1. Reevaluate your needs and desires. Keep in mind that the latter can often masquerade as the former. This is the first step because it is the most general, and dictates how you will approach any plan to save cash.

2. Write out a budget. Make a detailed list of income --- including interest --- and your expenses. Stick to it. It sounds simple and obvious, but keeping to a budget requires a great deal of discipline.

3. Transfer all credit balances to the lowest interest card you can be approved for. Set aside money to pay the principal down steadily. In terms of financial activities, make this a top priority.

4. Destroy your credit cards. Removing the temptation to overspend is important, and credit cards are a permanent source of temptation. This sounds radical, but it is hard to deny having credit cards in your pocket is a temptation to overspend.

5. Control how much you drive. Gasoline is expensive, and wear and tear on a car can be even worse. Combine trips. Never make a single trip to one place. Plan out how you drive and where with an eye to efficiency.

6. Take your car in to be serviced every 3,000 miles or so. This is a small expense that can save you thousands later on.

7. Invest in a health savings account. As of 2011, HSAs are tax-free. You can buy a cheap, high-deductible plan and set aside a certain amount of money each month for the HSA. If you are healthy and make a good living, this can save a small fortune.

8. Place any investment monies overseas. Invest in Chinese currency and Russian oil. Avoiding the dollar is probably a good thing for the time being.

9. Invest heavily in energy stocks, especially alternative energy securities. There is nothing out there but indications that these will continue to climb in value and importance.

10. Buy Chinese currency securities, as much as you can afford. The Yuan is state-controlled and has a history of solidity. The Chinese economic boom shows no real sign of slowing down. This can act as a hedge.

Tips & Warnings

• It is always best to seek professional investment advice and assistance before investing in anything, especially foreign currency or commodities. While investing in the Chinese economy is smart, make certain to discuss this with an investment broker or bank experienced in these foreign investments before committing any of your cash to it.

References

• "The Financial Times"; Dollar Seen Losing Global Reserve Status; Jack Farchy; June 27 2011
• Seeking Alpha; Investing in the Chinese Yuan: World's Reserve Currency by 2030?; Brian Fogila; January 16 2011
• IRS: "Health Savings Accounts"; Publication 969
• Wall Street Cheat Sheet; Investing in Energy: Why Energy Stocks Are On the Rise Today; Emily Knapp; June 9 2011