Whether it is recession or inflation or just the rise of prices, we all can do with some saving. But how can you save effectively bearing in mind your mounting debts and other responsibilities? Let’s look at some pointers.
- Decide what is a necessities and what is luxuries
A new flat screen T.V. in the living room is never “needed”, even if your household consists of 8 people. Food, clothing, toiletries, transportation, electricity and a bed are necessities. Don’t spend money on improvements if your budget does not allow it. We recommend including health insurance here too. Health should not be a luxury.
- Avoid buying useless items
The new knives set that you saw in an advert that will “never go blunt” is not needed, provided you already have a set of knives. Remember, marketing companies will forever be searching for new ways to grab your attention in order to sell their goods. Try out the product first. Maybe the quality and workmanship is not as great as advertised, or the product is simply not as effective and necessary as you initially thought. Spend your money wisely.
- Budget your money in advance
Before spending your next paycheck, decide what you need to buy beforehand. This excludes luxuries. Start with your utility bills, rent or mortgage, health insurance, important deductions like investment portfolios etc, and groceries. Cover everything you need in order to maintain your lifestyle, without sugar coating it. If there is money left, you may buy that tailor made golf club, Gucci handbag or treat your spouse/girlfriend/boyfriend to a nice dinner.
- Compare products from different stores
Many stores carry the same product range but at different prices. The reason a giant like Wall-Mart can offer you spaghetti/pasta at a lower price than Ed’s Grocer on the corner, is that Wall-Mart and Ed might share the same supplier, but Wall-Mart buys 200,000 units of the same product ensuring a much bigger discount than Ed with his 10,000 units. Buying in bulk ensures more savings for you the consumer. Also remember, if the amount you would save on a specific item by buying at Wall-Mart instead of Ed’s, but have to travel much further resulting in more fuel expense, the saving is nulled. Choose your routes well.
- Go “green”
Save electricity as much as you can to lower your utility bill. This might result in you getting solar panels on your roof and using gas instead of electricity. Do it only if your budget allows it; there’s no point in spending thousands of dollars for neat solar panels, but you are broke for 3 months. Buy a Hybrid car or trade in that lumpy 8 cylinder automatic gearbox car in the drive-way, for something more fuel efficient. Also car-pool more and write down important errands you need to run when you drive to work etc. This will cut your travel expense.