Credit Cave

While many nations are accruing more and more wealth, as individuals we are increasingly less wealthy, burdened with debt and struggling to live a full life.

Easy access, an all-pervading consumer culture and a lack of emphasis on saving help consolidate the division between rich and poor and are actually working to increase it.

So we need to adapt and start saving, here’s a few tips to help.

Credit Cards

1. Don’t pay interest, get a card that offers an interest free balance transfer. As soon as the interest free period expires on the credit card, find another one and move your balance. Just watch out for the fee they charge to transfer the balance, if you have a significant balance on your credit card the charge could be quite significant.
2. While you are in the interest free period, start paying back as much as you can. Make the most of your interest free period to pay back your credit card debt, because you aren’t being charged interest you’re money will work harder for you and you’ll reach a zero balance faster.
3. Rewards points, get a card that gives you rewards on purchases. You can then save the points and put them towards a purchase. Just make sure that you use any points earned within the allocated timeframe.
4. Cashback, get a card that pays you a percentage back. Therefore when you do use your credit card, you’ll get some of it back. It won’t be very much, but every little helps.
5. Avoid late payment fees by sending in your payments as early as possible, taking into account any weekends or public holidays that may slow down the payment. A late payment can set you back with a hefty financial penalty, which in turn means you owe more.
6. Setup a monthly standing order or direct debit that will cover your minimum payment. While this will go some way towards paying off your credit card debt, it will also ensure that you do not incur any late payment fees.
7. Ask for a lower APR. If you have to have a solid credit history behind you, call your credit card company and ask them to reduce your APR. If they aren’t being very forthcoming, you could threaten them with an account closure.
8. Keep your credit healthy, which will mean you will be eligible for those better credit cards. The easiest way to keep your credit healthy is never to miss a payment.
9. Watch out for ID theft. There are so many scams where criminals aim to get your credit information and start making purchases in your name. There are ways to avoid becoming a victim of credit card fraud such as never emailing your credit card details to anyone, shredding your statements (and any other financial documents) before throwing them out and being cynical about emails purportedly from your bank.
10. Keep any eye on your credit card report. Sometimes the details on your report are old or inaccurate, which means you can develop bad credit. In the US you are able to request a free credit report once every year, guaranteed by law. Get yours here.

Loans

11. Pay for your car in cash, up front. Let’s say you get a car loan for $15,000 at a rate of 6.80% over 10 years. You end up paying back $20,714.49, a full $5,714.49 in interest alone.
12. Forget about a broker, apply for your mortgage online.
13. Get a mortgage that tracks the base rate of interest. Loans 101 here; the lower your interest, the less you pay back.
14. Research the fees and penalties for your mortgage. Most lenders charge for setting up your mortgage, some more than others. Be on the lookout for mortgages that charge a fee if you want to move to a different lender.
15. Try and get a mortgage where the property survey is free, this will save you several hundred dollars.
16. Get a mortgage that calculates your repayments based on your daily amount owed. This means that if you paid in $1,000 extra on the first day of the month, your interest would be calculated on the new balance. Many mortgages calculate interest on a monthly basis, so watch out.
17. Some banks offer what is called a ‘one account’. Basically they will incorporate all your savings, credit card debt and loans into one. While you don’t earn any interest on your savings, the balance of your account is subtracted from the initial capital of your mortgage. So if you had a $150,000 mortgage and $25,000, you would only be charged interest on $125,000. Over the course of your mortgage term, this will save you many thousands of Dollars in interest and get you mortgage-free much faster.
18. Take out repayment protection. If you lose your job or simply can’t afford to make a payment, you’re in trouble. The lender hits you with a penalty and you’re worse off than ever before. One easy way to avoid this and save is by taking out a repayment protection plan. Yeah it’ll cost you per month, but it’s more than worth it in the long run.

Insurance

19. The best tip for insurance in general is to be careful. The fewer claims you make, the less you will have to pay out.
20. Shop around. Insurance is ultra-competitive, so find the best deal possible then get your insurance company to either equal or beat it. If they don’t want to, tell them you’re leaving and see how quick they change their mind.
21. You’ll find the cheapest insurance deals online because there are fewer overheads.
22. Avoid driving over the speed limit because if you get caught you’ll be served some penalty points, which are then put on your license. Once that happens, you can bet your bottom dollar that your premiums will go up. So slow down.
23. If you have an old car that has lost it’s value, you can save substantially by assuming more risk. This means that you’ll not be covered for the small dings and scratches (that probably adorn the bodywork anyway) but you will be covered for larger accidents. Think about it, why pay more for a car that has already lost it’s value?
24. Taking on a higher deductible (USA) / excess (UK) is another way to reduce your monthly payments. So let’s say you setup a new car insurance policy with deductible fee of $500. If you had an accident that caused $1,000 of damage, you would have to pay up the $500 and the insurance company would pay the balance.
25. Another way to save on car insurance is to garage your car overnight, which insurers typically view as one less risk.
26. If you don’t drive a lot, you might be interested in some of the new pay-as-you-drive (PAYD) plans. Instead of paying a flat rate monthly charge, you only pay to have your car insured while driving and therefore saving you a lot of money. However, there are privacy concerns as some PAYD plans rely on satellite tracking. But if you are apathetic to being tracked and just want to save money it could be well worth looking into.
27. Taking out personal travel insurance per journey can be very expensive and inefficient. If you are a frequent traveler then it may actually cost you less to take out a monthly year-round travel insurance policy to cover you anywhere in the world. If you travel only a few times per year then comparing prices online it the way to go.

Shopping

28. As a general rule of thumb, try and do as much of your shopping online as possible. You’ll get better prices in general and you won’t have to pay for fuel and parking in order to get to the mall.
29. Compare prices. There are so many online shopping comparison sites, so if you aren’t in a hurry why not browse them for a while and get the best deal you can. You know it makes sense.
30. You want a CD with that? Don’t bother with albums, download your music. Legally from iTunes or BT.
31. Same goes for movies, music videos and books. If it’s content, buy (or download) it online.
32. Don’t be fooled by the marketing prowess of the supermarket. They know you are there to buy food and other stuff, so they’ll market and pitch more expensive products to you all the way to the checkout. Your mission, should you choose to accept it, is to get out of the store with as much stuff as possible while spending the least amount of money. The easiest way to do this is to avoid brands, keep your eyes down and go for the stuff in boring packaging. It’ll cost less.
33. Did you buy something that you haven’t even opened yet? Or did you get a gift that you don’t need. Sell it to a friend or stick it on eBay. Whatever you do, don’t hold onto it. Get the equity out of your junk!
34. If you have to go out and shop, do it at night. You’ll find that stores will mark down perishable products as they near closing time because they need to get rid of the stuff. Take advantage of this and save money on everything from bread to meat.
35. Draw up a list of what you need, then stick to it. If you don’t know what you need, you will overspend.
36. Would you like an extended guarantee with your purchase sir? Let me think. No! These plans are easy money for retailers, avoid them like the plague. Unless you have splashed out on a new 42″ LCD screen, give it a miss.

Eating

37. You don’t need that extra coffee. In fact why bother buying a coffee from Starbucks when you can make your own at the office or home just as easily and for an awful lot less. When you think about it, that one tall latte costs about as much as a full jar of your favorite roast blend.
38. Take your lunch to work, you’ll save a lot of cash. Just think about it; if you ate out for lunch 5 days in the week at a cost of $15 per lunch, you’ll be spending $75 just on lunch. Now consider how much you earn per hour, and how many hours you have to work just to pay for lunch.
39. Cut back on eating out at night. It’s easy to get lazy and head out for dinner, but you’ve got to remember that your meal will cost a lot more than staying in. It’s also not the healthiest option.
40. If you do want to go out for a meal, hunt round for deals first. For example, one of the best restaurants in our area has a cheaper bistro menu that runs from 5PM - 6:30PM. Get in early, have a nice meal and pay less.
41. Drink water with your meal, it cleans the palate and costs less. Yeah I know it’s probably the boring option, but you’re supposed to be saving money not spending it.
42. Don’t buy bottled water from the store. It might taste better but you pay through the nose for it.
43. Don’t get a starter, you’ll not need it. Especially when most appetizers are the size of a main course anyway.
44. Resist the coffee after your meal, you can get one at home for much less.
45. Don’t buy readymade meals, they’re expensive and not very healthy. Anyway, you can grill some chicken and steam some veggies in about 20 minutes. It’s healthier and much cheaper.
46. Only buy what you need to eat, buying too much food means it’ll go out of date fast and you lose money on it. I’ve found that the best way to work it is to buy what you need, when you need it. OK, sometimes this means heading out to the 7/11 where food can be a tad more expensive, but it means you don’t end up going mad and buying too much stuff!
47. Keep your meals simple, meat and 3 veg should be your motto. Forget about all those fancy recipes you see on TV, they’re full of fat, require far too many ingredients and cost too much.
48. Use the leftovers from your evening meals for your lunch the next day. I always find roast is a good option for this, especially when teamed up with a little mustard.

Clothes

49. Don’t get too drawn into the fashion-frenzy. You’ll only end up buying an outfit, wearing it once and then dumping it because fashion has moved on. I suggest we move on and have the balls to dress whatever way we want without some French fashionista telling us what to wear.
50. Aim to build your wardrobe up with classic pieces that match. This way you will be able to interchange everything, so you won’t have to buy as many new pieces.
51. Go to the factory depots, they’re much cheaper. Name brands at a low price, nice!
52. Shop in the sales. Ok they can be stressful, but if you get stuck in you wil save money. Just keep your eyes open so that you get the best deals, the longer you wait the bigger the discounts.
53. Hit up your local charity store for cheap clothes. It might sound a bit cheap, but you’ll find that people throw out some of the coolest stuff. Anyway, half of the A-listers shop in charity stores because that’s where all the quirky stuff is.
54. Dry your clothes outdoors, you’ll save money on electricity. Save money, and the environment.
55. Kids are expensive enough, and they have absolutely no respect for their clothes. Mud, dog hairs, food; you name it and they’ll manage to cover their clothes with it. Get hand-me-downs for your kids, they don’t need to be super-stylish because they’ll wreck everything anyway.
56. Learn how to sew and fix your clothes. Where I used to throw out a T-shirt with a missing button, now I just sew the thing back on and keep wearing it.
57. Take back clothes for a refund that you have bought and then realize you don’t like. My wife used to buy a new top, take it home and then find out that she didn’t really like it. Each one of those garments that didn’t get taken back to the store was a waste of money.
58. I don’t really like doing it, but asking for discount works. The clothing industry is so competitive that many (family-run) stores will give discount just to get the sale.

Utilities

59. Only buy home appliances that have been certified as energy efficient, they may cost more to start with but you’ll save over time on running costs.
60. Replace your old light bulbs with energy efficient light bulbs, they last longer and save you money.
61. Lower the thermostat and burn less fuel. If there are rooms that you don’t really use in your home, turn off the radiator then close the door. If you live in a 2 storey house, you can turn the thermostat down even further upstairs because heat rises.
62. Buy oil when it’s cheap. As we all know, the price of oil is very erratic. If you can, buy your home heating oil when the price is low.
63. Insulate your home. Install more insulation in your attic, replace old curtain liners with new insulating curtain liners and seal any draughts. If you have a big enough budget, I’d highly advise installing double or even triple glazed windows. These are very efficient means of insulating your home, saving you money on heating costs. They also boost the value of a property significantly.
64. Turn off lights. If you aren’t in the room, turn the light off. There’s no point in being charged for light that you don’t use. Simple as that.
65. Switch off electrical devices. Televisions, DVD players and computers all have standby modes that mean they still consume electricity while on standby. Turn them off at the wall and you’ll shave up to 10% off your electricity bills. This is such a good way to conserve energy that the UK government is bringing in legislation that will make it compulsorary for all new applicances to not have a standby mode.
66. Think about some form of micro-generation. You can buy small wind turbines and solar panels for your home that can generate enough electricity to provide for 30% of your energy needs. In some countries there are government grants to help homeowners start micro-generation.
67. You can save a lot of money on your water bills. Always shower rather than bathing, and spend as little time in the shower as possible. Install new low-flow toilets that use less water. Reduce your use of the water heater. Install a rain-catcher (otherwise known as a barrel) and use the runoff water from your roof to water the garden.
68. Shop around for a different supplier. In the US and UK the energy market is free and open, so find the cheapest provider and switch.

Traveling

69. Book flights early and save a lot of money. While many of the budget airlines will fly to a regional airport, it may actually cost less to fly into an airport closer to a city center (If you are going on a city break) as you won’t have to pay for a taxi to your accommodation.
70. When booking a flight online, and assuming you can be flexible, look out for the ‘calendar view’. This gives you an overview of the month, with the lowest price per day.
71. Some airlines are now charging a fuel surcharge because of the high price of oil. Check that your airline isn’t going to surprise you with another bill on checkin before you book a ticket.
72. Pack light. If you are going on a short haul trip, especially if your wife is making the journey with you, avoid packing the entire wardrobe for the trip. If you go over your baggage allowance you’ll be charged a hefty fee for every kilogram over.
73. Budget airlines such as Ryanair are now charging per bag checked into the hold in an effort to speed up their turnaround times. If you can, pack what you need (minus scissors, liquids) into your hold baggage. This also means you don’t have to wait round to pick up your baggage at arrivals.
74. Book hotels online rather than walking in unannounced and being hit with the typically higher ‘walk-in’ rate.
75. Try and get a room rate with breakfast included. On a recent trip to Bali I saved $50 per day just because breakfast was included in the rate.
76. Book your vacation online instead of through travel agent, you’ll save money and I find that you can be more flexible in terms of where and when you are going.
77. If possible, book directly with the hotel. This way you only need to provide a credit card as a guarantee, so you won’t actually have to pay until you checkout. If you were to buy through a third party you’ll probably have to pay up long before your trip.
78. When you are going away, think about how you can get to the airport and back for cheap. Car parking at an airport is criminally expensive, I’ve often had to pay out $100 or more just for a few days. If you must leave your car at the airport, shop around for the cheapest deals. Often the best value airport parking can be a short free bus trip away. So why not take advantage of it? If you can get away with a lift to the airport, then arrange for someone to drop you off and pick you up.
79. Buy your car rental online rather than arranging for it when you arrive. Car rental is a competitive market and there are plenty of money-saving offers available.
80. Gas is expensive stuff these days. Save money by using one of the many sites that allow you to find the cheapest gas in your area.
81. Buying a new car? Get yourself a hybrid, they are far more efficient than a typical combustion engine and you get far more miles per gallon out of them. Hybrids are expensive to buy new right now, but as the technology becomes more accessible their price will fall.
82. Don’t use your car for small trips around town, they have a terrible MPG rating on short journeys. I know this sounds a lot easier than it really is, but you will make considerable savings if you stopped driving round town and used either your legs or a bike. Either or. Both will work out better for you financially.
83. When your car breaks down, do not take it to your car dealer. These guys are typically very expensive when it comes to servicing cars in my experience and those of others. So go out and find an independent car engineer who won’t be hard to pay. You’ll get the same service and it won’t cost anywhere near as much.

Computing

84. Open source or proprietary? I’d say go with open source all the way if you can. Ubuntu instead of Windows. OpenOffice instead of Microsoft Office. GIMP instead of Photoshop. And the list goes on.
85. Shop around for deals. For example, one of the easiest ways to get a cheap Mac is through their refurbished section. When they release a new model with upgraded processors you’ll find a raft of yesterday’s top of the line models at heavily discounted prices just to clear inventory.
86. Use free web-based services instead of their subscription-based alternatives. In other words, get yourself a Google account and start using Google Calendar, Google Spreadsheets etc. It’s cheaper than .Mac by far.
87. You can save a lot of cash when it comes to ink cartridges. Basically do not buy ink cartridges or laser toners from the OEMs (HP, Espon, Canon) and instead buy some replacement ink cartridges and laser toners.
88. This may be an indirect way to save money, but it is worth the effort regardless. Back up your data weekly or even on a daily basis if you are a heavy user. This means that if you do destroy your hard drive you’ll not need to pay for an expensive data recovery.
89. Get yourself a MythTV PVR to record shows and movies off the TV, DVD or other AV source. No more monthly subscription to TiVo needed.
90. Buy yourself a good surge protector and connect all the power adapters for the display, box, speakers and any peripherals as well as any telephone or ethernet cables. You might ask how this will save money? I had a good computer once, that was until a lightning storm came along, blew up the local exchange and fried it and everything attached to it. Several thousand dollars later I was back to square one.

Communications

91. Drop your expensive mobile phone contract. Or even better, don’t sign up to a mobile phone contract. Off course there are people who would find it cheaper to be on a call plan, but if you’re a light user than pay-as-you-go is cheaper.
92. Get a phone card so that you can make cheap international phone calls from any landline phone. The call quality is the same, it just costs much less.
93. Use an internet phone (VoIP) to call your friends and family. Services provided by Skype, SunRocket and Vonage are very cheap and reliable.
94. Make cheap calls from your mobile phone using Jajah. Calls are routed via the internet, costing much less.
95. Use emails as much as possible, they’re free and instant. They’re also a lot cheaper than sending a text message.
96. Find a cheaper ISP. Because competition is so intense between the major ISPS, they are always lowering prices. Take advantage of this and move, just make sure you aren’t charging a severance fee.
97. If possible try and get a deal where they roll broadband, cell phone and landline into one monthly subscription. UK users will know all about this, just make sure you aren’t subscribing to a service with bad customer service.

Not Strictly Legal

98. While you can easily buy your music and movies online, you might also find a way of getting it for free. BT anyone?
99. Certain consoles can be ‘modified’ to allow certain types of games to play on them.
100. Look at that plain old satellite receiver box. Doesn’t it need something new. Perhaps a well placed chip?
101. Let’s say your neighbor has a wireless network, but forgot to put a password on it. Do you really need that broadband subscription?

This entry was posted on Monday, October 9th, 2006 at 1:18 pm and is filed under Saving Money. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.