If you’ve ever sat down to categorize your spending for the past month, you’ve probably noticed those sneaky small purchases which seemed to be harmless at the time, now add up to hundreds, even thousands of dollars every year. It seems like fighting gravity to build your money market account.
The sad thing about little expenses is after some time, you usually have nothing to show for it At least if you spend $500 on a couch, you’ll have something soft to sit on, but what about the hundreds spent on going out to eat, buying gas for inefficient vehicles, barely used gym memberships, bank fees, credit card interest, inefficient appliances and light bulbs, and paying for unused cell plan minutes and features.
Tips for Reducing Expenses and Increasing Your Savings Account:
- Learn to enjoy cooking, eventually you’ll find restaurants have little to offer because you can fix any dish on the menu as good or better than they can for half the cost.
- Save up to $10 a day by skipping the restaurant for lunch and bagging your own meal.
- Do an audit of your cell phone plan. Make sure you’re not paying for more minutes than you use. Do you really need unlimited texting? Or could you get by with paying $10 for 500 texts instead of $30 for unlimited texts. Removing unlimited texting is an example of how we reduced our Verizon bill by $20.
- If you find that you’re not using many minutes you may want to consider a pre-paid phone. That way you don’t end up paying for minutes you don’t use.
- Take a second look at any memberships you have. Are you getting your money’s worth out of them? If not, get out and put your money to better use.
- Grocery store visits can cost hundreds if you’re not careful. Shop at discount stores and case lot sales. Buy bulk food storage and learn how to use it in every day cooking. I’ve found that cooked cracked wheat can be added to casserole dishes to make the more expensive ingredients, such as meat, go twice as far.
- Overdraft and ATM fees can add up. You may consider choosing a bank that doesn’t charge fees such as Ally Bank. Credit unions can help alleviate ATM fees because of shared branching. If you belong to a credit union, you can withdraw money at any other credit union for no charge.
- When deciding which bank to go with, read bank reviews at BankTruth.org
- Energy efficient compact fluorescent light bulbs can be expensive, but try putting one in each time an old bulb burns out. They use 75% less energy and you can save more than $40 in electric costs for one bulb alone. They also last up to 10 times longer.
- Energy star appliances save up to 50% on your electric bill.
- Tune up your vehicles. Regular servicing can increase your fuel economy by 10%, not to mention help your car last much longer. Get rid of any extra weight in your trunk to increase your MPG.
- Use RateCatcher.com to find the best money market rates.
- Pay off your card every month to avoid interest. Credit card interest can steal away thousands of your hard earned dollars if you don’t.
Here are some scary statistics about credit card use from CreditCards.com (don’t become a statistic):
- The average credit card debt per household with a credit card is $14,750 as of Dec. 2010.
- The average APR of a credit card is 14%.
- More than half of Americans paid interest in the last 12 months on a credit card.
- In a recent survey, 36% of people said they didn’t know the rate they had on their primary card.
It’s better to decrease your expenses than to increase your income. Here is why: taxes make it so that even if you increase your income by $100, you only get to keep $75 (assuming a 25% tax rate). However if you reduce your expenses by $100, you get to keep the full $100 and hopefully put it in a money market account.