How can I save when I'm almost broke?By
Jeff Wuorio
• Bankrate.com
Dear Money Matters,
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?
Stacy
Dear Stacy,
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.
Automotive: 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: What with the competition
these days for your long distance bill, shop around to see which
carrier might save you the most money. Here's another tip -- rather
than using any long distance service, my sister-in-law just buys
those long distance cards and uses them as she needs them. She swears
she saves a chunk of change that way.
Food: Provided 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. 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.
Automate 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
U. 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.
Good luck.
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