Americans have become increasingly bad at saving their income – 62% of American households have less than $1000 in savings. But saving money is one of the best ways to achieve financial freedom. By having large cash reserves, you allow yourself the opportunity to reduce costs in your everyday life. In addition, you have the ability to make investments or take advantage of opportunities as they arise. In this article we will outline various easy ways that you can save money for the future.
1. Smart Car Buying
Cars are a depreciating asset – meaning they lose value over time. Some economists think that purchasing a car is one of the worst investments anyone can make. Luckily, there are a few tricks that can help you reduce costs when purchasing a car.
Firstly, avoid purchasing a car through a dealer. Private listings are traditionally cheaper because you cut out the middle man. If you do purchase a car through a dealer, make sure to shop around for a car loan prior to purchasing. Dealers sometimes charge higher for financing than other private lenders because they can rely on customers being too lazy to do external research. There are plenty of websites that help you compare auto loans from multiple lenders.
Secondly, avoid buying a new car. Cars depreciate as much as 11% the minute you drive it off the lot. If you want a new car with a manufacturer’s warranty, look for used cars that are less than a year old – you can save thousands.
Saving money when buying cars is one of the smartest financial decisions you can ever make for your future.
2. Save When Buying a Home
Purchasing a home is a great decision for those who can afford it. Paying off your own mortgage instead of someone else’s has benefits that run long into the future. The initial process is expensive, but there are a few ways to reduce the cost of purchasing home.
Firstly, be patient. Don’t purchase a home without doing thorough research on the area, and both it’s advantages and disadvantages. It’s often better to decide on a neighborhood, and then wait for a good deal to appear before purchasing a property.
Secondly, spend less money. Saving money when you buy a house is huge. Financially, saving money when you buy a home is a major advantage.
Thirdly, shop around for a mortgage. Most mortgages last 30 years, it’s very important that you visit various lenders to find the most affordable loan. This has the ability to save you money long into the future.
Get Rid of Cable and Home Phone Lines
As technology advances, cable and home phone lines are increasingly unnecessary. Ditch the past and sign up for a premium streaming service like Netflix, HBO Go, or Amazon Prime. These services allow you the on-demand content you want, for a fraction of the price – you’re currently paying for channels you never watch. If you insist on having cable, consider calling your provider and telling them you’re thinking of canceling, they’ll often offer a reduced price or additional services at no cost.
Home phone lines in modern times are almost entirely useless. The advent of mobile telephones means there is no need to pay for a fixed line in your home. Get rid of your home phone line, many Americans already have!
While the cost of an individual pack of cigarettes seems low, a pack-a-day smoker in the U.S. can expect to spend at least $2000 a year on their habit. Drinking is also an expensive habit for someone who regularly consumes alcohol. Cutting down on these habits not only drastically improves your finances, it also reduces your risk of disease.
In addition, goods such as soda, coffee, and bottled water cost money over time. Try drinking tap water instead, or purchasing soda in bulk in order to avoid inflated prices at convenience stores.
When we say stop gambling we mean this both literally and figuratively. Many Americans waste money gambling in casinos around the country. Statistically speaking, over time you cannot win money at a casino. Those occasional big wins don’t reveal how much your truly losing.
Also, many Americans gamble in the stock market. While the pay-offs can be large, it is an extremely risky investment strategy. Stick to safer investment options such as infinite banking and other smart, safe investments.
Don’t Carry Credit Card Balances
The average U.S. household has over $16,000 in credit card debt. This is especially worrying considering interest on credit cards often falls between 10% and 25% – meaning many households are paying thousands of dollars in interest payments annually. Make eliminating or avoiding credit card debt a priority – it may take time, but the savings are worth it. If you can’t eliminate your debt straight away, consider transferring your balance to another credit card. Creditors often offer long periods interest free on balance transfers, which can alleviate stress and help you pay off your balance faster.
Saving money is a lot easier than it sounds. Making smart decisions can help increase your savings dramatically without changing your lifestyle. Remember, most people waste money through laziness – being aware of unnecessary costs can go a long way in reducing your expenditure.