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Eight tips to reduce spending and start saving

[Oct 1, 2010.]

 

Easy payday loans can sometimes be too easy, allowing consumers to lurch from one financial crisis to another without stopping to reassess their budget. While low income and high expenses create money problems for many people, some individuals still find a way to set aside money in a savings account or a money market fund that they can use when unexpected expenses arise. Without that cushion, consumers can sometimes go from using occasional cheap payday loans to finding themselves in a situation where they cannot repay their payday loan debts.

In order to build an emergency fund, every individual has to find a solution to the same problem--how to increase your income or reduce your spending (or both) in order to save money. Increasing your income can mean taking on another part-time job, adding more hours to your current job or selling a car or another possession, but these days, spending less may be easier than finding that extra job.

Here are eight tips to reduce your spending:

  1. Consider moving or bringing in a roommate. If your rent takes up too much of your paycheck, you might want to look for less expensive housing or share your space (and the cost) with someone.
  2. Cut your cable bill. You can save money by switching to a basic plan, switching companies or canceling your cable service completely.
  3. Cancel your landline. Plenty of people use only a cell phone to keep their phone bills lower. If you want to keep your landline, call your phone company to see if there are services you can skip to reduce the cost.
  4. Try bundling your cable, phone and Internet service. Combining these utilities with one company can often lower the expense.
  5. Reduce your utility bills by conserving energy and water.
  6. Switch your car insurance. Carry the minimum required and make sure you get all the discounts you can.
  7. Eat out less and shop the sales at the grocery store.
  8. Shop at thrift stores for clothes and accessories.

The important step to remember as you cut costs is to keep track of those pennies and dollars and transfer them into a savings account. The easiest way to do this is to set up an automatic transfer each month. For instance, if you are saving $25 per month on a new cable plan, arrange for $25 on the first of each month to be transferred to a savings account. While building a substantial savings account can take time, the slow and steady effort can result in plenty of peace of mind.

 

About Author:

Michele Lerner is a freelance writer with twenty years of experience writing articles and web content for newspapers and magazines on topics related to real estate, personal finance, and business.

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