how
and where you spend your money is a
matter of personal choice and priorities
but those choices can affect the amount
of money you have left to save
i present ideas on how to get the most
from spending and how to spend less
housing and its associated costs such as
insurance
utilities furniture maintenance and
repairs for homeowners
are the largest or second largest
expenditure for most people
keeping these costs and taxes under
control which i explain how to do in
this section
goes a long way toward being able to
save some money
living solo is a pricey luxury that most
younger people can't afford
doing so definitely has its benefits you
have more privacy and control over your
home environment
ranting may sacrifice some of these
advantages to living alone
but having roomies also has its pros if
you share a rental with roommates
the per person costs should be
substantially less than if you live solo
before you choose to share a dwelling
with someone make sure you can live with
the person
for the length of the rental agreement
if you break the lease
you may owe a hefty amount of money
which defeats the purpose of saving
money with a roommate
you may realize that you're currently
living beyond your means and you need to
make some adjustments
you may have allowed your champagne
tastes to exceed your beer budget when
you went shopping for a home rental
so long as you're completing your
current lease there's no reason you
can't move to a lower cost rental
the less you spend renting the more you
can save toward buying your own place
just be sure to factor in all the costs
of moving to and living in a new rental
of course a lower cost rental may be
lower quality and not up to your
standards
don't accept living in a high crime
neighborhood a poorly maintained
building
or a location that causes you to burn
much of your free time commuting to work
every year some landlords increase their
tenants rent no matter how good the
tenant has been
and regardless of the state of the
economy if your local economy is weak
and the rental market is soft
or your living quarters are
deteriorating negotiate with your
landlord
you have more leverage and power than
you probably realize
a smart landlord doesn't want to lose
good tenants who pay rent on time
filling vacancies takes time and money
state your case to your landlord through
a well-crafted and polite note and or
personal visit
explain how you have been a responsible
tenant always paid your rent on time and
cared for your unit
and convey that your research shows
comparable rentals going for less
briefly explaining any challenging
financial circumstances
such as reduced pay from your job may
help your case as well
if you can't stave off the rent increase
perhaps you can negotiate some
improvements you value
purchasing a home always seems costly
however over the long term
owning is usually less costly than
renting a similar property
and as a homeowner you build equity the
difference between the home's value and
what you owe on it in your property as
you make mortgage payments and as the
homes value increases over the long term
if you purchase a property with a
30-year fixed-rate mortgage
the biggest expense of ownership your
monthly mortgage payment is locked in
and remains level
by contrast as a renter unless you live
in a rent-controlled unit
which means that local government
dictates and limits the percentage by
which the rent may rise annually
your entire monthly housing cost is
fully exposed to inflation
if you own a home or are about to buy
one you can take many steps to keep your
ownership costs
down and under control without
neglecting your property or living like
a popper
even if you can afford the monthly
mortgage payment on a house you're
looking to buy
if you have too little money left over
for your other needs and wants
such as taking trips eating out going to
concerts
enjoying hobbies or saving for
retirement your dream home may become a
financial prison
owning a home may be more affordable if
you have some monthly rental coming in
consider renting a bedroom or separate
or in-law unit if you're lucky enough to
have one
to someone who can pay monthly rent as
well as possibly help with utilities
through services like airbnb.com
homeaway.com
vrbo.com tripadvisor.com
tripping.com and so on you can get an
idea about what you may be able to
charge and rent and find possible
renters
you should also inquire with real estate
agents who are active and experienced in
your local rental market
and consider websites like trulia.com
and realtor.com for listing your rental
if you decide to take on a renter or
renters make sure you check the renter
or renters thoroughly through references
in a credit report
and be sure to discuss ground rules and
expectations before renting to someone
sharing your space
vet prospective renters before agreeing
to meet them or show them the rental
you don't want to waste your time
showing rentals to someone who can't
afford it
isn't a good fit for your situation or
has a shady background
also ask your insurance company to see
whether your homeowner's policy needs
adjustments to cover potential liability
from renting
you can take steps to keep your utility
costs down whether you own or rent a
home
first don't waste energy even if you
don't pay for it out of pocket as a
renter
landlords absolutely factor your energy
consumption into future rental hike
decisions
paying for your own utilities should get
you to consider wearing layers in the
winter
you shouldn't be walking around then in
shorts and not expecting your home to
feel like a meat locker in the heat of
summer
adjust your thermostat to save energy
allow it to be cooler than normal in
winter
and warmer than normal in summer when
you're not going to be home for a while
for example while you're at work or away
for a weekend
especially if you have to pay for
garbage service recycle as much as
possible
seek the replacement of old energy
guzzling appliances
and where possible beef up your
property's insulation
obviously if you're a renter you have no
control over these things
but you should certainly ask about
utility costs and whether any appliances
and
insulation could be upgraded as
necessary
alongside the costs of owning or renting
a home taxes are the other large
personal expenditure for most folks
everyone gets sucked with taxes when
earning income and when investing in
spending money
that's the bad news the good news is
that you can reduce the amount of taxes
you pay by using some relatively simple
yet powerful strategies the following
two tax tremors can help
use retirement savings plans to take
advantage of such plans
you must spend less than you earn only
then can you afford to contribute to
these plans
many of these plans immediately reduce
your federal and state income taxes
and once money is inside such an account
the investment returns are sheltered
from taxation
reduce the amount of sales tax you pay
to do so you must spend less and save
more
when you buy most consumer products you
pay sales tax
therefore if you spend less money and
save more in retirement accounts
you reduce your income taxes and sales
taxes
not eating is one way to reduce food
expenditures however this method isn't
very realistic
the following culinary strategies can
keep you on your feet
perhaps even improve your health and
help you save money
discover how to cook take a course and
read some good books on cooking
learn from those around you parents and
friends come to mind who can teach you a
thing or two
consider that most people eat three
meals a day 365 days a year
that's more than one thousand meals
yearly a lot of eating
if you don't know how to cook for
yourself and how to do so healthfully
you may end up spending a lot more money
on food and eating out
and have poor health to boot cooking
meals for yourself doesn't mean having
to make something for each and every
meal
you can cook in larger quantities than
you need for one meal
and put what you don't eat in the
refrigerator or freezer to eat at a
later meal on another day
making your own food saves you money
helps you enjoy your food more and makes
you more attractive to a mate
learn about nutrition and prepared foods
no
this point isn't contradictory with the
first one about learning to cook
everyone is busy and buying prepared
meals including some frozen foods that
are easy to heat or ready to eat
can make sense for some of your meals
but you want to be sure to buy healthy
nutritious affordable food name brand
companies spend a lot of money on
advertising and marketing
which you the consumer end up paying for
through higher prices
you can save a considerable amount of
money by buying the store brand
for example trader joe's or whole foods
365
everyday value which is usually the same
quality and sometimes the same product
as the name brand but priced
lower buy in bulk you can save
substantially by shopping at stores that
are able to sell groceries for less
because of their operating efficiencies
topping that list are wholesale
superstores such as costco and sam's
club
the catch is that you must buy most
items in bulk or in larger sizes
an additional advantage to buying in
bulk it requires fewer shopping trips
hence less gasoline and results in fewer
instances of running out of things
you may be able to buy some of the foods
you find you like in bulk online just be
sure to order from a reputable online
retailer that stands behind what it
sells
if you decide to buy in bulk be careful
with items that can spoil
make sure that you buy what you can
reasonably use or freeze when necessary
if you're single consider shopping with
a friend and splitting the order
although tap water often does leave
something to be desired
lab analysis of bottled water shows it
has its own problems
you can save hundreds of dollars
annually and drink cleaner water by
installing a water filtration system at
home and improving your tap or well
water
also consider pitcher-based water
filtration systems like zero water
and brita pack your lunch sometimes
eating out daily can rack up a lot of
expense brown bag it sometimes
spend carefully when dining out eating
out can be fun and a way to socialize
with friends
but keep in mind that you're essentially
hiring someone to shop
cook and clean up for you you can save
some money when eating out by
remembering these points
eat out for breakfast or lunch rather
than dinner you can generally get the
most bang for your buck then
and this may be better for your health
studies show that the meals you eat
earlier in the day should be the more
substantial ones
not dinner go easy on the beverages
alcohol is especially expensive when
dining out and beverages in general are
usually the biggest profit margin items
at restaurants
when you're considering the cost of
living in different areas don't forget
to factor in commuting costs and wear
and tear
not just on your car but on you getting
to and fro on a daily basis can get
expensive if you don't keep an eye on
your expenses
many people rely on cars for their
transportation
buying and operating a car can be a
tremendous financial burden
especially if you borrow to buy or lease
the car
you can control your transportation
costs by following my suggestions
opt for public transportation choose to
live in an area that offers reliable
public transportation
such as a subway or bus system you can
often purchase monthly passes at a
reasonable rate
if you live close to work or at least
close to a public transit system
you may be able to make do with fewer
cars or no car at all in your household
ride your bike during warmer months
consider jumping on your bike to get
around
you can save money and get some exercise
just be sure to be safe
wear reflective gear and be sure your
bike is easily visible
stay off high traffic narrow roads and
be on guard for bad drivers
if you must have a car look at cheaper
options than financing or leasing one
having provided financial advice to many
folks over many years
i can tell you from direct observation
that spending on cars
is one of the leading causes of
overspending and under saving
but if you can avoid having your own car
by all means do so
you can also consider renting a car when
needed if you don't find yourself
wanting to use one frequently
or take an occasional taxi or use a lift
or uber type service
the main reason people end up spending
more than they can afford on a car
is that they finance the purchase when
buying a car you should buy one you can
afford with cash
which for many people means buying a
good quality used car
when shopping for a car don't make the
mistake of simply comparing sticker
prices
consider the total long-term costs of
car ownership which include gas
insurance registration fees maintenance
repairs and taxes
sales and personal property and be sure
to consider
the safety of any car you buy as driving
is surely the most dangerous thing you
do
see the national highway traffic safety
administration's website
safercar.gov which has lots of crash
test data as well as information on
other car safety issues
buy and drive cars that have the highest
crash test safety ratings
5 stars the good news for you as a
consumer is that in the fashion industry
global competition has driven down
prices for consumers
here's what you can do to look like a
million bucks on and off the job
while spending fewer of your bucks
don't chase the latest fashions ignore
publications and ads that splash
celebrities wearing the latest looks
you can enjoy pictures on social media
like instagram but recognize some of
those photos are nothing more than
veiled ads to promote particular lines
of clothing and brands
also keep in mind that the person
wearing the clothing and the setting for
the photo greatly influence how the
clothing appears and appeals to you
you don't need to buy lots of new
clothes every year if your clothes
aren't lasting at least 10 years
you're probably tossing them before
their time or buying clothing that isn't
very durable
of course when you enter an office job
for the first time you're probably going
to have to buy some new clothing
true fashion as defined by what people
wear changes quite slowly
in fact the classics never go out of
style
if you want the effect of a new wardrobe
every year store last year's purchases
away next year
and then bring them out the year after
or rotate your clothing inventory every
third year
set your own fashion standards shun
dry cleaning required clothing stick
with cottons and machine washable
synthetics rather than wools or silks
that require costly dry cleaning
consider buying gently used fashion at
consignment shops vintage shops or
online
you can find great bargains at these
places that others may have worn only
once or twice and didn't like
look for deep discounts some stores have
occasional big sales with major price
reductions
and if you can wait until you're well
into a particular season you can get
items on clearance when there's still
time left to use them
for example when stores are ready to put
out fall or winter coats in august
they put their swimwear on clearance
depending on where you live
you may be able to wear that new
discounted suit for several weeks
and of course in future years
minimize accessories shoes
jewelry handbags and the like can gobble
large amounts of money
again how many of these accessory items
do you really need
the answer is probably very few because
each one should last many years
don't purchase accessories and then not
use them
having fun and taking time out for
recreation can be money well spent
however you can easily engage in
financial extravagance which can wreck
an otherwise good budget
here are my favorite tips for getting
the most from your recreation spending
don't equate spending more money with
having more fun
many movies theaters museums and
restaurants offer discount prices on
certain days and times
cultivate some interests and hobbies
that are free or low cost
visiting with friends hiking reading and
playing sports can be good for your
finances
as well as your health hang out with
people who share your values and aren't
material
it's especially important that you find
a partner who isn't a spendthrift and
isn't overly impressed with material
things
take vacations you can afford don't
borrow on credit cards to finance your
travels
try taking shorter vacations that are
closer to home
for example have you been to a state or
national park recently
take a vacation at home visiting the
sites in your local area
for longer distance travel go during the
off season and off peak times and days
for the best deals on airfare and hotels
if you've been disciplined about paying
your credit card bill in full each month
check out some of the better reward
credit cards that offer benefits
like free hotel stays and airline
tickets
it seems there's no end of ways to stay
in touch and be entertained
as well as a never-ending stream of new
gadgets the cost for all these services
and gadgets adds up
leading to a continued enslavement to
your working full time and earning more
money
err on the side of keeping your life
simple doing so costs less
reduces stress and allows more time for
the things that really do matter in life
keep the following in mind before you
spend money on technology
especially when it comes to new
technology and gadgets wait
you don't have to be the first person to
get something new when something new
first hits the market
prices are relatively high and the
gadget inevitably has bugs
wait at least a couple of years and your
patients will be rewarded with much
lower prices
and more reliable products if you're
considering buying a new cell phone
ask about buying the previous model
which is likely far less than the new
model
also do your homework before going
shopping consumer reports and cnet
cnet.com are useful resources
be aware of how much you spend on your
cell phone cell phones are a particular
device that can encourage the wasting of
money
of course if your employer pays for your
cell phone as a perk
or you can afford to buy the latest and
greatest gadgets you can skip what i
have to say in this topic
in addition to downloads text messaging
web surfing and other services
you can find all sorts of entertaining
ways to run up huge cell phone bills
each month
apps are especially problematic in this
regard
sure the company behind most apps claims
the app is free
but of course you'll face numerous
tempting ways to make in-app purchases
ask yourself whether you really need all
these costly bells and whistles
if you don't use your phone a lot
consider a prepaid plan where you pay
only for what you use
if you typically use a few hundred
minutes per month or fewer
you should save money with one of these
plans last but not least
be safe with your cell phone especially
when driving and don't hold the cell
phone to your ear when talking because
of long-term health concerns about the
radiation emitted from these phones
use the speaker phone or get an earbud
or headset for your phone
insurance is a big area the following
tips help you minimize your insurance
spending
while making the most of your insurance
whether health home
renters auto or life insurance use high
deductibles
each insurance policy has a deductible
which is the amount of a loss that must
come out of your pocket before coverage
kicks in
higher deductibles can help to greatly
lower your premiums
however if you have a lot of claims you
won't come out ahead by
instead choosing a low deductible
because your insurance premiums will
escalate
obtain broad coverage don't buy
insurance for anything that won't be a
financial catastrophe if you have to pay
for it out of your own pocket
for example buying simple dental or home
warranty plans
which cover relatively small potential
expenditures doesn't make financial
sense
and if no one's dependent on your income
you don't need life insurance either
who will be around to collect when
you're gone always shop around
rates vary tremendously among insurers
take care of your health exercise at
least a few times per week and eat
healthfully
lose and keep off that extra weight if
you're now overweight
you only get one body and one life to
take care of it
although your life may be relatively
simple now sometimes you may have to
deal with new challenges
and you may benefit from a seasoned pro
at your side
tax legal business and financial
advisors can be worth more than their
expense if they know what they're doing
and you pay a reasonable fee
here's how to get the most out of your
spending when you hire advisors
get educated first how can you possibly
evaluate an expert on a certain topic if
you don't know much about the topic
yourself
printed and software-based resources can
be useful low-cost alternatives and
supplements to hiring professionals
use professionals only when needed not
constantly
most people most of the time should hire
a professional only on an as-needed
basis
but be wary of professionals who create
or perpetuate work and have conflicts of
interest with their recommendations
scrutinize and interview thoroughly
before hiring
do background research to evaluate each
prospective advisor
strengths and biases be sure to check
references
and conduct an internet search to see
what you can find out about the person
check regulatory associations in your
state for any citations or actions taken
against an advisor
when you're young and in good health you
usually don't give much thought to
health care expenses and health
insurance
but you have health insurance for a
reason and unfortunately the cost of
health care continues to rise
faster than the overall rate of
inflation use these tips to protect
yourself
shop around for health insurance and
health care many different plan designs
are available with a wide variation in
costs
also like any other profession medical
providers have a profit motive
so they may recommend something that
isn't your best option including extra
testing that you may not need or benefit
from
don't take any one physician's advice as
gospel
always get a second opinion for any
major surgery
examine your employer's benefit plans
take advantage of being able to put away
a portion of your income before taxes to
pay for out-of-pocket health care
expenses
especially in health savings accounts
investigate
alternative medicine and tread carefully
alternative medicines focus on
preventive care and treatment of the
whole body
or person are pluses just keep your
antenna up for pie in the sky promises
and charlatans out to empty your wallet
check with your physician before trying
any alternatives
kick your addictions smoking alcohol
drugs and gambling can cost you
financially and emotionally
be honest with yourself about the damage
that excesses in these areas are causing
in your life
and take action now to get on a
healthier path
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