5 Ways to Save Your Hard Earned Money

Whoever coined the pithy adage “Pennywise and pound foolish” was probably right in his perspective; however, in the context of saving it is totally off-key as it is the pennies that add up to the pounds. Unfortunately, most of us have the uncanny ability to fritter away our resources to regret at leisure at our foolishness.

Money, a powerful resource, has the power to enable achieving most of  the life goals and aspirations that we desire. Money saved is money earned to be used wisely. And it does not require a genius to save money in simple ways in all our daily activities.

Here is my list of ways of saving money without scrounging. So read on and benefit from them

1. Credit Cards –  Beware of the Debt Trap

Yes, you heard it right – death rap and death trap are homophonous. Millions of naive people have fallen into the credit card debt trap because of sheer carelessness. A study shows that the the average American family had a debt of $15,960 in 2012 And this is based on one card per family! You can save money by adopting some simple ground rules:

• Get rid of your Credit Card. Go in for a debit card instead. By this you spend what you have and it limits your spending.
• Beware of hidden charges. Some cards charge a “small” service  charge on every purchase. This can off-set any discount which may be offered to the benefit of the credit card company.
• Don’t be fooled by “free” credit cards. Many of them charge annual fees upfront after the honeymoon period is over.
•  Have one single card instead of multiple cards. Having many cards leads to uncontrolled spending and messed up payment schedules
• Avoid add-on cards. These may give freedom to purchase for the add-on members but you lose control on spending.
• Never use your credit card to pay off debt on another card. This will only add up your debt and one fine day the recovery agents will come calling.
• Do not fall into the trap of paying only your minimum balance. This could lead to  accumulation of debt at heavy interest rates with little to nil effect on outstanding principal.
• Arrange for refinancing or changing over of your outstanding debts to one card. Some credit card companies are willing to reduce the burden if you switch over.
• Use an ATM of the card company instead of other ATMs to avoid paying extra charges.

2. Home Loans – Home Sweet House

Do you own a home? Not till you pay off the mortgage for the house! Once you have started on the long route to repayment of the loan, it becomes a habit to pay off the instalments on schedule. This can make you overlook significant changes in the realty market and can impact your capacity to save.

• Be aware of the trends in interest rates of home loans. Study the market trends – are the rates going up or down in the near future? Should you go in for a fixed or floating interest rate? Can you change the plan later? A correct decision on this can save a lot in the long run.
• Pre-pay your instalments, if possible, Paying in advance before the scheduled date has the advantage of reduced interest burden.
• Pre-pay your principal. This could lead to a reduction in instalments or the tenor. Check for any penalty clause for pre-payment.
• Re-finance your debt. Check for banks which can transfer your outstanding loans at more advantageous terms and transfer your loan from your present bank.
• Negotiate at all stages of the home loan process – you will be surprised at how much you can save this way.

 3. Work – Earning to Save

Well, the workspace is the starting point of the whole concept of saving. Here’s where you earn the money to meet your needs (and wants, and luxuries). Sometimes you end up spending more than required in the process of earning. Here’s how you can trim some of the expenditure and save up substantially.

• Car pool with friends and colleagues. This not only saves spends on fuel but also helps in bonding better with your mates.
• Use public transport. Use passes instead of paying daily for the commute.
• Use a bicycle if possible. It is the ultimate cost cutter, and it is good for health, too.
• Relocate to a place nearer to the workplace to cut down commuting costs.
• Make use of company food coupons; better still get your lunch from home.
• Many companies give good discounts on goods and services to their employees. Make good use of them.

4. Keeping the Home fires Burning

Home is where the hearth and heart is. It is also the place where the maximum savings can be affected in simple ways. It only requires a change in outlook in the way we look at things, a paradigm shift as the lofty call it.

• Pay utility bills promptly when due. Electricity, water and gas are what we just can’t do without. You just cannot afford a disconnection due to late payment. Also reconnection charges and the effort itself are not worth it.
• Cut down on wastage of utilities around the house. Keeping lights and power equipment on when not needed, not fixing that dripping faucet in time, wasting gas, all lead to unnecessary and avoidable increase in bills.
• Utility companies use the complacence and reluctance of customers to discontinue their services and unreasonably hike up their rates. Question this practice. Change the company to another one. Save.
• Cut down on your internet, phone and cable bills by using pre-paid option. This avoids fixed charges and you pay for what you use.
• Go for bundled services for internet, cable and phone – they are cheaper.
• Use a router or set up wi-fi hotspots at home. This cuts down on individual and expensive cell phone data rates.
• It is not necessary to rush for that expensive new cell phone or gizmo that has just hit the market, How often do you use all the features on the gadget you own? Save the difference in cost by not buying.
• Start a kitchen garden if you have the space. You can grow herbs and other smaller veggies if you don’t have a backyard. You’ll be surprised at the ease and beauty of it and the money you save..
• Declutter the house. Get rid of all that you don’t need. Sell them on-line or have a bargain sale to make some money.
• Use multi-purpose equipment in the kitchen instead of having one for every function. This saves up a lot of space as well as money.
• Reuse your leftovers, don’t throw them away. There are plenty of tasty recipes on the net for remodelling your leftovers.
• If you love to read, borrow books or join a library. This way you avoid paying for the expensive book which just might gather dust on the shelf, many times unread.
• Read e-books if you have the inclination. There are a lot of books on the internet which are quite cheap or even free.

 5. Shopping – Don’t We All Love It

I think I wouldn’t be wrong to state that the basic pleasures in life are sex, food and SHOPPING, not necessarily in that order. Shopping, especially for women, and I hope I am not sounding sexist, is the most pleasurable activities ever. Impulsive and compulsive shopping has resulted in the birth of the – shopaholic. Great savings lie in this area for a sensible shopper.

• Look for bargains and discounts. These are given as promotions for new products, products nearing expiry, clearing old stock, or simply to attract customers to prop up flagging sales. Go for only genuine discounts after comparing the prices at other outlets.
• Make a list before shopping. Lay out a budget. Just stick to the budget and the list. Don’t look right, don’t look left. Buy and exit.
• Do not shop when hungry or thirsty. You tend to go over budget and end up buying unnecessary stuff.
• Buy online. Now-a-days the competition is so tough that no reputable company can afford to sell spurious stuff. The goods are also way cheaper than store bought items as the online stores have better supply chain management. The retailing mark-ups are lower and benefits are passed on to the customer. And look how much you save on transport, food and other sundry expenses.

Saving is not rocket science. Awareness and prudence is all that is required. Little drops of water an little grains of sand indeed make the mighty ocean and the pleasant land. And pennies and nickels saved over time make mighty bank balances. Save today, and tomorrow, prepare to invest.