Twenty five ways to save money each month

Twenty-Five Ways to Save More Each Month

The more we spend unnecessarily, the less money we save for our true priorities and
future needs. That's especially important in challenging economic times.

BusinessWeek asked financial advisors for tips on how to reduce expenses and boost
savings. Changing spending habits can be difficult, but here are 25 suggestions to get
started.

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Track Every Expense

Financial advisors say the best way to control your spending is to know precisely where all
your cash is going each month. There are several options: Make a budget; keep a
spreadsheet of all spending; or buy a computer program designed to help manage your
finances.


Vacation in the Off-season

Reston (Va.)-based financial planner Frank Boucher says he is taking his beach vacation
in early September, when he found a luxury condo for half its cost during July and August.
Vacationers can also save by staying with friends or visiting low-cost locations like
developing countries.


Cut Out Investment Charges and Fees

Jeff Seymour of Triangle Wealth Management in Cary, N.C., points out that many
investors end up paying 2% to 3% off the top each year for investing costs. Lower-cost
mutual funds and index funds can slash that bill, savings that compound over several
decades of investing.

Also, save more by taking full advantage of your employer's matching contribution to your
401(k) account.


Cut Back on Eating Out

Food is a daily expense that can add up quickly over time, so office workers can save a lot
just by bringing their lunches to work rather than buying every day. Meals eaten at home
almost always cost less than evenings out, even at more casual restaurants.


Downsize Your Car

Drivers stuck with a gas-guzzling SUV might consider selling it and finding more
fuel-efficient wheels. (Of course, that could mean a financial hit given falling prices for the
behemoths.) You can save on fuel and also on auto loan payments. High car payments
are a frequent budget-buster, financial advisors say.


Cut Utility Bills, Especially Electricity

Experts are full of advice on lowering electricity and heating bills: Buy efficient light bulbs;
lower the thermostat; turn off the air conditioning whenever possible; turn off lights and
unplug appliances when not needed.


Make Sure You Don't Have Too Much Insurance

Life insurance can be a bad deal if you don't have dependents. For auto and home
insurance, deductibles are often too low, advisors say. "You can save quite a bit by going
from a $250 to $1,000 deductible," says Kirk Kinder of Picket Fence Financial in Bel Air,
Md. "Also, shopping these for prices every couple years is important."


Find Cheaper Beverages to Drink

If you can break your addiction to fancy coffee, the free office coffee can be a money-saver
over time. Unwilling to give up out-of-office coffee breaks, some thrifty consumers switch
to a cheaper drink at their local Starbucks (SBUX) or other coffee shop. For alcoholic
drinks, quality wines, beers, and liquor can be found at lower prices with a little research.


Examine Your Phone Service

Do you need both a landline and a mobile phone? If you have a cell phone, do you need
long-distance service on your home phone? Canceling one line could mean one less bill
every month. Many people have phone packages that are too expensive for their needs,
so read your bill carefully.


Stop Paying for Premium Cable

Some penny-pinchers cancel cable service entirely to save $100 or more each month.
Others lower their bills by cutting out premium movie channels.


Drive Less; Consolidate Trips

Think before jumping in the car. By planning and running many errands on the same car
trip, you cut your fuel usage. Rather than driving, consider using public transportation, or
walk, bike, or rollerblade somewhere nearby.


Use Warehouse Stores Wisely

Warehouse stores like Costco (COST) or Wal-Mart's (WMT) Sam's Club can be great
places to get deals, but they can also encourage over-spending. "Just make sure you go
with a list and only buy those things that you are actually going to consume," financial
planner Frank Boucher says. "It makes no sense to get a 'bargain' on a bulk item if you are
going to throw half of it away."


Lay Down the Law with Your Free-Spending Friends

It can be hard to keep up with wealthier or less thrifty friends. Some financial planners
advise cash-strapped clients to seek out social companions with similar budgets. However,
if you're honest about your spending limits, true friends should be willing to adjust their
plans by, for example, choosing a less pricey restaurant.


Find Free Entertainment

Movie rentals, cable TV packages, book purchases, concert tickets—it can all add up. Use
your local public library to read books and rent films for free. Depending on where you live,
it might also be possible to find free concerts, performances, and readings.


Consider Alternatives to a Gym Membership

The health benefits of a fitness club membership are only worthwhile if you go often. But
there are other options: Exercise at home, outside, or at a local parks facility. Or, sign up
for individual exercise or yoga classes rather than a full membership.


Cut Your Own Lawn

Michelle Goldstein of Goldstein Financial Future in Dallas estimates her family saves $40
each time they mow their own lawn instead of calling a lawn service.


Be Smart with Credit Cards

Financial advisors admonish clients to pay off their bills each month to avoid interest and
finance charges. For those stuck with debt, move cash to cards with low interest rates.
Some find they spend less on impulse purchases if they cut up their credit cards and use
only cash instead.


Annualize Your Expenses

When reviewing your spending habits, roughly calculate how much they're costing over
the course of a year. "Realizing how much things cost over the course of a year can really
help put things in perspective," says Bob Nusbaum of Middle America Planning in
Pittsburgh. For example, if you spend $10 for snacks and lunch each weekday, that adds
up to $2,500 in a year.


Force Yourself to Save

One way to save more is to trick yourself. Transfer money automatically from paychecks
into savings or investment accounts. With less available in your checking account, you'll
be more careful about your spending. Gradually increase your automatic savings rate over
time.


Institute a Waiting Period for Major Purchases

Wait at least 48 hours before deciding to buy anything over a certain price limit—$50 for
example. After the waiting period is over, "You may decide that the object desired really
isn't worth the price," says Jennifer Hartman of Greenleaf Financial Group in Los Angeles.


Pay Bills Online—Save on Stamps, Avoid Late Fees

Set up your finances so bills are paid automatically or online at the click of a mouse.
"There's no reason to pay for stamps and envelopes and run the risk of a late-payment fee
when bill-pay programs are usually free," says Walt Mozdzer.


Make Sure You're Deducting All Business Expenses

Chris Long of Long & Associates in Chicago says clients often make the mistake of mixing
personal and business expenses on one credit card. That makes them less likely to get
reimbursed for expenses by employers or to deduct expenses from taxes.


Buy Generic Drugs and Groceries

Store-brand products in grocery stores are often made by the same manufacturers as the
brand-name items. If you take prescription drugs, ask your pharmacist if a cheaper,
generic version is available.


Buy Used

Cars, books, furniture, and even clothing can be bought used for a fraction of their original
cost. New cars in particular often aren't worth the extra cost; a lightly used vehicle can
save you thousands of dollars with little or no extra maintenance expenses.


Shop Smart

Coupons are a classic way for shoppers to get great deals. Supermarkets vying for
shoppers will frequently run "double coupon" promotions. Comparison-shopping on the
Internet is easy thanks to a variety of sites designed to help shoppers find the best deals.
When retail Web sites ask for "coupon codes," try to find one by using a search engine.
But whether online or in person, avoid the temptation of bargain-hunting for items you
don't really need. "Most of the time if an item is 20% off, we waste $8 to save that $2," says
Neerja Bhutani of Bhutani-Palmin Financial Planning in Walnut Creek, Calif.


Twenty five ways to save money each month

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