Savings tips for living below your means
- Pay off credit cards or move balances to
cards with lower interest rates.
- Avoid using credit cards. If you want a
new stereo or TV, wait until you have the money to buy it. Leave
the credit cards for emergencies -- when the washing machine takes
its last breath or the car breaks down.
- Get that emergency fund started. That way
you won't have to pay credit card interest when the washing machine
- When you get a raise, put 10, 25 or 50 percent
aside for investing or paying off bills.
- Shop around for the best deals and the best
prices. Use the Internet to do this and you'll cover a lot of
territory in a short amount of time.
- Don't tie up too much money in your mortgage
-- not more than 28 percent of your gross monthly income. All
debts -- mortgage, car payments, credit cards, etc. -- shouldn't
take more than 36 percent of your gross monthly income. Reduce
those percentages if you can. Just because the bank will give
you a mortgage that's 28 percent of your monthly gross doesn't
mean you can't take out a smaller mortgage that will let you keep
a little more cash each month.
- Don't worry about keeping up with your neighbors.
The only reason you should buy something is because you want it
-- not to impress someone else.
- Look at your daily lifestyle and see where
you can cut costs. Clip coupons, and don't forget to take them
to the store. It's absurd to pay full price for something when
you don't have to. Eat out a little less often. Pack a lunch for
work a couple times a week.
- Check out Bankrate.com
rates listings to find the best rates on mortgages, car loans,
personal loans, CDs, checking and money market accounts -- get
the most for your money.
How about you? Are you managing to live
below your means and save the difference? If so, why? Do you have
a secret weapon for saving that you'd like to share? Send it to
editors@Bankrate.com and we'll spread the news to the rest of
our readers. Keep saving!