With the bad housing market you would think that right now is the time to rent a home instead of buying one. While it’s a personal choice, I’d like to list a few of the reasons why buying a house, even right now, is still a good idea.
- Low prices. While home prices are still dropping, nobody really knows if this is the bottom or not. Soon enough, prices will begin to climb back up. If you see a house you like that’s priced right, jump on it before someone else does.
- Interest rates. At the moment, interest rates are still pretty low. They will climb back up to their pre-recession levels at some point. If you buy a house right now you can lock in that low interest rate for 30 years.
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Cutting expenses is becoming more and more of a necessity in these uncertain economic times. If you find yourself struggling in your finances, then you’ve probably developed your own methods for reduced spending. However if you’re trying to cut costs and still find yourself overspending, consider these four methods to consider for living a more thrifty lifestyle.
Budget Yourself
Before you consider anything else, draw up a budget. Look at your finances: what money you have right now, what money you can expect to have in the near future, and what money you. Estimate a figure that you can reasonably adhere to every month and stick to that number. If you can, try to keep your expenses below your set limit so you can have start saving a small amount every month. If you have a clear budget then you’ll be less likely to indulge yourself with unnecessary expenses because you’ll know exactly where your finances stand.
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This blog is certainly about being frugal and saving as much money as you can. But there are indeed times when it is wise to pay top dollar for something. I’ll be going through a list of items here where it is okay to spend big money.
- Education. Enrolling your child in a good school is a good investment. It can keep them out of trouble (no legal fees later), they’ll be ready for high school / college (no tutoring fees) and set them up to get scholarships (get a break on tuition) in the future.
- Health care. Nothing is more important than your well being. Getting regular medical checkups to ensure your continued health is key. In the long run, it will actually save you money since you’ll be avoiding / delaying the costs that medical conditions bring on that could have been caught early on.
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If you have a credit card do you know how to use it wisely? Having a credit card is a lot of responsibility. New credit card users especially can get carried away with spending and before they know it they could have a pretty hefty bill with no funds to pay it. If you are going to use a credit card you need to take responsibility of ownership. Here are some great tips that you will want to follow.
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Having credit history will make it easier for you to borrow money later for things like a car or a house. Having a good credit score also makes it possible to borrow money at a lower rate. One of the best ways of establishing your credit is through the responsible use of credit cards.
If you’re young and want to get a credit card, you’ll most likely be denied for having no credit. But that was the reason you wanted a credit card in the first place, to build up your credit. So what can you do? There are some options I’d like to discuss that will help you get your first credit card.
- Start with a secured credit card. Almost everyone qualifies for a secured credit card. Here’s how it works. You can load the card with an amount such as $500. You can then use the card just like you would use a credit card, but your credit limit is $500. The credit card company isn’t at risk of losing any money since they’re not letting you borrow any. These types of cards are great if you can’t get credit either because you have no credit or because you have bad credit.
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If you’re trying to save money the biggest roadblock in your plan can be spending money foolishly. Here’s a list of the most common ways people waste money.
- Leftovers. If you go out to eat, take home your leftover food. If you make too much food one day, save the rest and serve it the next day again. Don’t throw it away and needlessly waste food.
- Groceries. Buy only what you plan to eat. If anything, buy less than you think you’ll need. You don’t want to buy 5 avocados and end up throwing two away.
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Maximizing your bigger purchases with your credit cards can be beneficial in several ways. If you use your credit card for large purchases you could potentially be saving money. A large purchase can be anything from a car to a TV or that luxury holiday you’ve been waiting for.
First off, if you have enough money to pay for the actual item, at the end of the month, you can pay back everything that you owe due to your recent large purchase; this will improve your credit score and show that you are able to service large debts.
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We all have had times in life when we have to cut back on expenses or change our way of life. Those were difficult times because it was a change of lifestyle. Downgrading is never a good experience to go through, especially when it’s forced upon you by bankruptcies or mounting debt.
But have you ever considered downsizing your lifestyle, even when you don’t need to? Learning to live on less doesn’t mean you can’t live a fulfilling life. In fact, some of the most rewarding things in life are things that don’t require you to spend a dime. Here are some free and low cost things you can incorporate into your life.
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1. Think used cars break down? New cars break down too and are costlier to repair. It can also be more difficult finding parts for a new car rather than an old one. You’re also more likely to repair a new car at the dealer, while taking your used car to a cheaper auto mechanic.
2. The thinking of some is “Why buy a used car if I have to buy 2 used cars in 10 years, I’d rather just buy 1 new car for 10 years”. But it’s not true that a new car will always outlast an old one. A properly maintained used car can last you 10-15 years.
3. Buying a new car means paying more taxes. When you buy a car from another person you just pay for the cost of the car, while at the dealership you pay for the car and all sorts of other fees.
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1. No credit history – Having no credit history is almost comparable to having a poor credit history. Lenders are hesitant to loan out money without knowing about how you have previously handled loans before.
2. Too many credit applications – Making a number of applications in a short period of time will probably set alarm bells ringing in the ears of creditors. They’ll think that you keep getting denied and are desperate for money fast.
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A house cannot be run without having a budget. If you’ve never done a budget before, start with a simple budget. First, total your monthly income. Second, track all your expenses for that month. Lastly, do the following math: income minus expenses. That’s the gist of what a budget is.
If your result shows more income than expenses you have a surplus. You can use this money to pay down debt to eliminate it faster or you can put it into a savings plan.
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Sure every now and then you want to hit up a restaurant and there’s nothing wrong with that. I’ve amassed some tips though on how you can keep the expenses to a minimum.
– Go during happy hour and sit at the bar. Contrary to what you might think, it’s not all about the drinking there. Usually appetizers are half off as well as alcoholic beverages. I’ve found that appetizers can be as big as an entree but cost way cheaper.
– Share a drink or get water. A soda will cost you nearly $3 so if you don’t need one, save some money and sip on some water.
– Pay with cash in exact change. Your server doesn’t really like it when your total is $17.12 and you give them a 20. You’ll just be sticking them with 2 dollars and 78 cents to take home. Instead give them $20.12. That way you get rid of spare change and they get an extra dollar.
– Skip the dessert. You might have gotten used to ordering an appetizer, entree and then dessert bit that’s really too much. Your entree alone probably has a thousand calories as it is already.
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When you’re rushed and want a quick bite nothing brats going to the drive-thru but those quick trips can quickly add up if you make them daily. For example some of those combos can cost about $5-$7. Here’s some quick tips to save on those fast food cravings.
– Order from the dollar / value menu. McDonalds has he McChicken and McDouble while Jack In The Box has a delicious Big Cheseburger for a buck.
– Skip the fries. I know you think that your meal is not complete without fries but you can live without them. Fries cost almost $2 while you can buy a potato for about a quarter.
– Get your drink at home. Sodas at these joints cost almost $2. A can of soda when you buy a 12 / 24 pack at the store only costs about 35 cents. These places make their money on the soda, not the sandwich.
– Finally, pay with spare change. Don’t let your change accumulate. Pay in quarters, dimes, nickels and pennies. That way it’ll feel like you almost got your snack for free.
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Is picking up pennies off the floor a waste of time? Well if you’re thinking of depositing it into your savings account then yes you won’t go very far doing that.
Here’s why I always pick up loose change off the floor though. When I go shopping or to grab a quick bite to eat and the charge is $9.22 I make sure and give them the 22 cents. This way I don’t lose that extra dollar every time which can really add up.
Sure sometimes you’re in a hurry or don’t want to make people wait for you so don’t do It those times and use that change you get next time.
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Clipping coupons is always a good idea. If there are items you usually buy every week, odds are you can find a coupon for it. The sunday newspaper is a great place to find literally hundreds of dollars in savings. There are also online coupons available you can print out and take to the store. They add up over time. Look for double coupon days at the grocery store too.
When going to the grocery store, always have a shopping list with you when you go the the grocery store. Stick to it too. No impulse buys. Another good tip is to eat before going to the store, otherwise everything will look yummy.
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Eating a big juicy hamburger is great, but if a hungry child is looking at you do it, you can’t help but feel like you’re doing something wrong. Likewise, in times when people are losign their homes to foreclosure, losing their jobs, filing bankruptcy, in debt due to medical bills and under water on their home loans, it’s simply not “cool” to spend money on ridiculous things just because you can.
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You can call it trying to keep up with the Jones’ but I’ll call it being financially irresponsible. It seems like in every neighborhood you want to be the one with the best car, amongst friends you want to be the one with the nicest clothes and with family you want your vacations to be the best. Ultimately it’s all about your ego, but when you stretch and blow up your budget to compete, you don’t win anything, you actually lose, because sweet rides and vacations are great, but paying interest on them because you couldn’t afford them is not. It turns out that sometimes a full ego equals an empty wallet.
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You’ll save loads of cash if you have your priorities set straight. Here are what “needs” are: food, clothing, shelter and transportation. Everything else is a luxury. But don’t fool yourself into thinking a BMW is a need, staying at a four star resort is a need, fine dining is a need or designer clothing is a need. Sure these are food, clothing, shelter and transportation, but in fact they are luxuries, and thes luxuries are only to be done if they fall within your budget.
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