5 frugal tips for 30-somethings

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At this stage in life, you might be considering your first home purchase, buying a family car or preparing for your first or second child. While all these exciting life events cost serious money, you can make the most of your finances with these simple guidelines.

1. Don’t buy a house until you’re ready. A common money mistake is to become overburdened with too much debt from a huge mortgage, new furnishings and a new car. Remember that the monthly payment involves more than just the mortgage, there’s also insurance, taxes, maintenance and maybe even association dues.

2. Get more for your wheels. When it’s time to buy a new car, sell the old one rather than trade it in at the dealership.

3. Compare health insurance plans with your spouse. It’s almost always cheaper for a couple in which both people work to keep their individual health plans. Then again, not all plans provide the same coverage, so switching to the spouse’s plan with better coverage may cost less in the long run.

4. Ladder CDs to boost savings. You can maximize the earning power of CDs by buying different certificates at varying maturity dates. For example, instead of buying one big CD, parcel out your money into three-month, six-month and one-year certificates. Known as laddering, this gives you flexibility to adjust your savings as rates change. Laddering allows you to lock in when rates are high and when rates are not so good, so the process keeps you from being stuck for too long with low earnings.

5. Go basic for baby. Keep the clothes simple — Junior sure isn’t going to the opera, and he’ll have outgrown everything you’ve bought by the time you get home. As for furniture, skip antiques and hand-painted specialties, as well as fancy drawers, breaks and locks. Dressers, rocking chairs and shelves are all much cheaper when they come in simple pine — and, incidentally, when you buy them at regular furniture stores rather than special baby stores.