When the economy takes a down turn, one of the best ways to “weather the storm” is to save money! In this post I will share the top five ways that we see people saving lots of money.
I believe that if you apply these five items, you will save over $1,000 a year. Don’t believe me? Try them out!
1. Home and auto insurance
I know that I have mentioned this several times on the blog, but it is so true! I have had HUNDREDS of stories of people telling me about how much money they have saved by getting new quotes.
Many of them never had to change their current insurer because they took the better quotes back to their current insurer and demanded a better deal. Sweet!
On our Next Steps Insurance page we have links to get both Auto and Homeowner’s insurance quotes. These allow you to fill in a bit of information and receive quotes without the hassle of having to call around to multiple different companies.
Remember when LendingTree said “When banks compete, you win!”? Well, the same is true for insurance companies. Be sure to get your home/renter’s insurance quoted along with your auto insurance because bundling them together will save you 10% – 30%.
2. Life insurance
It is incredible the number of people who have dependents reliant upon their income yet do not have life insurance. According to LIMRA only 59% of Americans have life insurance, and have of those with insurance have inadequate coverage.
As a teacher and speaker on the subject of personal finances, I have seen many examples of inadequate/no life insurance. The impact that it has on the surviving dependents is devastating. I have also seen instances where there was adequate insurance. The result is much different!
I have also seen a lot of people who are paying way too much on life insurance. Some people are paying thousands of dollars a year in life insurance premiums who tell me that the cash value will be worth $1,000,000 when they retire. I tell them that this is great, but if they would have term life insurance and invest the difference in cost, they would have $10,000,000.
I recommend term life insurance equal to eight to ten times one’s annual take-home pay. For healthy people term life insurance is SO CHEAP. I personally carry thirty year level term policies on my bride and me.
You can obtain online quotes without speaking to anyone HERE
Go ahead and check them out. If you do not have life insurance and you have dependents who are reliant upon your income, purchase a policy ASAP. If you already have life insurance, compare the costs.
My bet is that you will save a ton of money.
3. Zero-percent balance transfer credit cards
I do not know how the credit card industry has been so effective at teaching Americans to believe that 15% is a good interest rate. But they are great at it! I cannot tell you the number of times I have heard the following statement during a financial counseling appointment:
“The interest isn’t bad on this card. It is only 17%.” Or 13%. Or 11.99%. Or … You get the picture.
I used to say the same thing (when I was BROKE). I got “unBROKE” by challenging my belief system and realized that I was allowing myself to be legally robbed of my money!
If you are paying high interest on a credit card, you should seek to restructure that debt. One great way to restructure debt is to play the “surf the balance” game. Move the balance to a zero-percent balance transfer credit card and then work like crazy to pay it off. If it is not paid off by the end of the zero-percent period, surf it again. This ensures that all of your payment goes to reduce the principal balance of the debt.
There are several 0% Balance Transfer Credit Cards located on the “Next Steps” tab (HERE). Move the balance and make progress toward 100% debt freedom!
You will save a ton of money by restructuring high interest debt!
4. Online savings accounts
Do you have money in your savings account? If not, it should by your TOP PRIORITY. $1,000 as a minimum or $2,500 if you have kids or a house. I repeat – this should be your TOP PRIORITY!
For those with money in savings, how much interest is your bank paying you? If it is a local bank, it is likely that the interest rate is very, very, very low (close to 0%). Online banks pay much higher interest because they do not have to pay the costs of maintaining local branches (people, buildings, etc). These online banks pay around 5X – 8X the national savings interest rates of other banks. I hold all of my savings in online banks and have done so since 2007. They are FDIC-insured and are very easy to use.
There are several excellent online banks. Click HERE to see the online banks I use or recommend.
The bottom line is that your money should make you money – the most money possible. My online banks allow me to do that for all money that I plan on using within the next five years.
5. Groceries and cash envelopes
Cash envelopes allow me to save a TON of money. How? I have a written spending plan that my bride and I prepare every month. In this written plan there are several items that I tend to be impulsive with. Groceries, dining out, clothing, entertainment, and spending money are the top five impulsive categories for me (can I get a witness?). To control my impulsiveness, we pull that money out in cash. We stow away the debit card and only allow cash to be used to purchase items in our impulsive categories.
This one move saved us over $200 a month in groceries alone! You can read more about how to start with cash envelopes HERE.
You can also use coupons to save a ton on groceries. In fact, my team has prepared an entire section of money saving tips for groceries under the Next Steps budgeting tab. You can check it out HERE.
Our Top 5 Ways to Save Money
Saving money, especially a large amount of money, can seem impossible. Our hope is that after reading this blog post you come away with practical ways to save money NOW!
Some of these savings ideas will take some work. No one ever says, “I’d love to be on the phone with different insurance companies all day!” However, if it means saving $500 or more each year those phone calls are worth it. Not to mention, most companies now offer online quotes that eliminate the hassle of waiting on hold. We’ve heard from numerous people that after they called for new quotes not only are the saving money, but they’re also getting better coverage.
Decide to take action today. Think about the last time you got a new insurance quote. If you have balances on credit cards look into transferring them over. Move your savings to an online bank to earn more interest and save on banking fees. Identify areas where you overspend, and start using cash envelopes and coupons for those things.
I believe that by pursuing these five money saving areas you can save $1,000 or more. Tell us how you did!