How can I save
when I'm almost broke?
By the time all of the bills are
paid for the month, I am lucky to have $200 left. How can I save and perhaps invest?
Without knowing more about the particulars of your situation,
I can't offer specific advice on how you can free up money for saving and investing.
However, I can provide a few global ideas that you can pick and choose from according
to what fits:
Housing: If you
own a home and have a mortgage that's, say, more than a year old, look into refinancing.
Interest rates are at historic lows -- that alone may save substantial money from
one month to the next. If you rent, consider moving to a less expensive apartment
or home or give some thought to taking in a roommate. Either option can serve
up significant savings.
Likewise, check out to see if refinancing an existing auto loan might save you
some cash. (I did an earlier
column on this topic. If you drive to work in a metropolitan area, look into
car pooling or public transportation (the latter can save big on gas and parking).
To save on your auto insurance, give some thought to raising your deductibles.
If you drive an old clunker, don't spend the extra cash on collision coverage.
Telephone costs: Shop
around to see which carrier might save you the most money. As most
cell phone plans offer free long distance within the United States
and free nights and weekends, be sure to take advantage of those
perks. Don't call out of state on your home phone if you can do
it for free on your cell.
you have the storage space, buying food and other things from bulk warehouses
such as Sam's Club and Costco can offer significant savings. If you don't have
enough room to accommodate bale-sized packages of toilet paper, ask a friend or
neighbor to chip in for what you buy. But unless you have a large, ravenous family,
stay away from perishables, as they may go bad before you have a chance to chow.
Credit card debt: If
you're dropping a lot of money on one or more high interest credit cards, check
out consolidating them into a single lower rate card. If you feel it's possible,
go with a teaser rate card that has an exceedingly low interest rate (but only
for a specified amount of time). My colleague Don Taylor wrote a piece on consolidating
credit card debt. Use Bankrate's credit
card search engine to find the best card for you.
Pay yourself first: Perhaps an old cliche, but
one that got there by containing more than a grain of truth. Rather than doling
out money to everyone else and praying that even the slightest crumb is left over,
make saving or investing the first "bill" you pay every month. You may
be pleasantly surprised how easily you can make ends meet thereafter.
payments: To help earmark funds for saving or investing in the least painful
fashion, set up an automatic withdrawal program where you bank. That way, an amount
you specify is withdrawn from your checking account on a regular basis and invested
as you direct. It can be a whole lot easier than steeling yourself to write a
check every month.
Put the pieces together:
Far too many of us look for a savings grand slam -- that one coup that will free
up all the money we need. Instead, look to save more modest sums on a number of
fronts -- once they're all added up, a few dollars here and there may turn out
to be more money than you ever dreamed possible.
Bankrate has a channel devoted to tips for saving
money, called Frugal
$ense . One feature you should check out is the monthly money-savings
tips contest. Read through the dozens of money-saving tips from
the finalists -- and maybe you can win $100 by contributing one
of your own.