For the vast majority of people, paying off debt and saving money can be done painlessly. That is to say, most people can pay off their current debt and start a saving fund without making major changes to their current lifestyle. How can this be done? By simply rearranging how you spend your money.
Although we don't often think about it, there is an art to spending money efficiently. Like any skill, it's a matter of study and practice to get better at it. While some people are better at picking up the skill than others, anybody can easily learn the basics of this art which can save them thousands of dollars a year.
Lets take an easy to understand example. Let's say that you purchase a cup of coffee on the way to work everyday at a local shop for $2.00. This would meant that you spend $40 (20 days x $2) a month. Most people would probably do this without even thinking twice about it.
Now if you made the same cup of coffee and placed it into a thermos each morning before you went to work and took it along with you, the same coffee it would cost you about $0.50 a day. That adds up to a total of $10 a month. By making your own coffee instead of purchasing it at a store on the way to work, you save $30 a month (over $350 a year) without giving anything up (you still get your coffee everyday). All you have done is rearranged the way that you spend your money.
Let's take another example. You have your phone service and pay a certain amount each month for it. But are you getting the best deal on your service for the way you use the phone? Chances are you aren't, but the phone company isn't going to tell you that on their own. Most people can save over $100 a year on their phone service by calling their phone company and signing up with a discount or bundled plan geared toward the way they use the phone as opposed to the standard plan with extra options that most people have. Here again, you are getting the exact same service you currently receive, but are paying less for it by rearranging the service to your advantage.
There are literally hundreds of ways that you can rearrange the way you spend money. In the process, you will get the same goods or services that you are currently receiving at a fraction of the cost that you are currently paying. The money saved can then be put forth to eliminate your current credit card debt and start a savings plan. All it takes is a little understanding of the art of spending efficiently and to actively look for ways you can rearrange how you spend your current income to make your purchases more efficient.
Another way is to use your direct deposit. My company allows you to deposit into several different accounts so I just set it up to put 15% (net) into savings and the rest in checking. This way even when I get a raise at least a portion is going to increase my savings. It is a practically painless process because like taxes, insurance and 401(k) contributions it is gone before I even see my checking deposit slip.
You still can get the same thing for less, but you might have to do some extra work like cooking, repairing, look for the best deals and coupons. But it's well worth it. Because the money saved is better than money earned ( doesn't count towards your income [might put you in a lower tax bracket] and you don't have to pay tax on it)
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MONEY SAVED IS BETTER THAN MONEY EARNED
Why?
Because You Don't Pay Tax On It !!!
Spending money more efficiently is something that I get better and better at everyday. Thank you for posting this. Things like this keep me focused and let me know that I am doing the right thing.
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BEATING DOWN DEBT AND FINANCIAL APATHY
It's good to think of where our money is going. When we find savings we can use them to remove debt more quickly.
After a seminar recently I was chatting with an aunty who was taking me to the airport. The dicscussion turned to some of the topics I'd been speaking about.
She was horified when I told her about my annual review of bank accounts. She would never change the bank where her accounts are!
Each year around my birthday I check my bank accounts to see if I'm getting the best deal. If needs be I change. The results can be quite large savings as different banks etc keep changing what is on offer.
This idea of an annual review can be pushed a little further and it can include insurances, telephone as mentioned above and just about any service you regularly buy.
Help Please: I haven't been able to work out how to get the best prices for dental. Has anyone worked out how they can compare prices for services such as dental, hospital and legal?
To be honest with you guys, coupon clipping is probably old news for many people and i just read a story in local paper about the new discount program that took the regular coupon book to a completely electronic level, i just purchased my membership for the max card at their website , The Max Card - Mega Coupon Book In A Card - Save on Dining, Shopping, Travel, Attractions ! and to say the least there are about 4,000 local stores in my area that give me a discount but most of all the national discounts is where the really big savings come in.
Trying to redirect your spending can be hard for those who don't know how.
I am learning how to spend less on take-out food, saving gas, and all around money tossed away.
There are numerous ways to save, I mean truly save. The key thing is that you learn to discern the offers out there to make sure you won't be *had*. I have a checking account with US Bank, which offers cash rewards if you use the debit card to purchase items from their connected shopping link to 150 sites.
For me it's worth it, since drugstore.com is one place I buy from every month. For clothing, it's Land's End and Eddie Bauer. What's key is that I hit drugstore.com the first week of each month because that is when GNC has their 20% Gold Card savings. I also treated myself to a few Vera Bradley accessories, including a small handbag from e.bags. All the items were on sale, AND, I received $5.00 cashback. This is actual money that *collects* in my rewards account. I can transfer this money to my checking account in increments of $5.00. Not a bad deal.
Discernment is important to know if you are truly saving. Since I go to GNC via drugstore.com, I can tell if prices are deliberately inflated to get their money back. They aren't.
For now, that's not a bad deal. It's also a good way to add to my $20 Challenge account.
One of the best and easiest ways to save money is by dropping your landline and using Skype. It is $3 a month vs the $50 a month you probably spend on your landline and long distance. That is $600 a year you can save with no loss of service. One thing to keep in mind is that skype does not support 911 calls. So you will need to have a cell phone (which you probably do) for that. Or, I suppose you could just keep the list of emergency numbers handy (police, fire, ambulance)...
The Art of Saving Money Painlessly
