As the old saying goes, money is the root of all wealth. No one is sure who said it, but the words cut right to the basis truth. Everyone wants to figure out the most efficient ways to save, earn, spend, store, leverage, invest, and otherwise use money for maximum effect. But, in today’s fast-paced economy, what can consumers do to face all the challenges that come with a world based on the use of money? Here are 12 hacks that can come in handy for money-conscious folks of all ages, occupations, and backgrounds.
Ditch High-Interest Debt
One way to keep more of a desirable item is to use less of it. That’s why it makes sense for credit card holders to get rid of high-interest plastic. For example, if you have seven cards, pay off the ones with the highest cost of use and keep the low-interest ones. Getting rid of costly debt also applies to vehicle and home loans that can be refinanced now that your credit and income have improved. A simple refi on a $250,000 home can reduce monthly payments and chop off a large amount of long-term interest expense at the same time.
Earn a Degree and Pay for It the Smart Way
Education is worth its weight in gold. Plus, the old adage is true that no one can ever take a degree away from you after you’re earned it. School work is tough enough without having to worry about how to pay for it. If you’re considering going back to school or are getting ready to start, a student loan from a private lender can make college more affordable from day one. Private loans offer realistic terms, workable repayment periods, and competitive interest rates. Few people can afford to pay for higher education from savings, which is why it’s wise to consider private sources of borrowing to cover all the expenses involved with acquiring a diploma.
Join a Wholesale Club for Fuel and Groceries
Want to save $1,000 or so each year on groceries and gasoline? Join a wholesale club and take advantage of member benefits like 10 cents off the cost of every gallon of gasoline, grocery bargains for bulk buying, and monthly specials that offer staples for up to 50 percent off regular store prices.
Build a Detailed, Realistic Budget
Budgeting is a boring but extremely rewarding endeavor. Plus, if you are one of the many people who hate doing it, download a free app that will help you get the job done without hassles or headaches. The key to effective budgeting, even if you use an app, is including every one of your expense items. Most apps will walk you through a series of questions in order to catch all the typical spending categories. Then, once you have all the numbers crunched and recorded, the other half of the battle is sticking to your plan.
Adjust Your Tax Withholding Percentage
Do you receive a W-2 each year from a primary employer? If so, check with the accounting department and set your withholding level carefully. The goal is to get it just right, so as not to owe taxes and not to have too large of a refund. Big refunds seem like a windfall when you receive them, but they cost you in lost interest income and delayed use of the funds.
Adjust Your Spending Habits
Try an experiment. Use your phone or a notecard to record every penny you spend for one full month. Don’t overlook anything, including coffees at the convenience store, the occasional candy bar, groceries, regular bills, fast-food stops, meals out, trips to the local pub, and everything else that incurs a monetary cost. At the end of the month, you’ll have a solid idea of where your cash goes, and will be able to eliminate a few budgetary leaks with ease.
Download a Free Savings App
Look online for a savings app you feel comfortable with. Some are super-simple, while others include sophisticated components. Try out a few and choose one to download. These clever little pieces of code work by rounding up all your purchases and sticking the odd cents into a savings account automatically. Sure, it might just be a few dollars per month, but every little bit adds up. If you make a lot of small purchases, don’t act surprised if you’re able to sock away as much as $250 per year just by using the app.
Make Monthly Contributions to an IRA
Start saving for retirement early and you’ll enjoy the amazing effect of compound interest. The trick is to set up an IRA as soon as possible and max out your contribution each year. Even if you don’t earn enough to do the max, contribute whatever you can afford. The earlier the better, because interest will magnify every penny you put aside.
Monetize Attic, Basement, and Garage Junk
Kill two birds with one stone by getting rid of your home’s clutter and selling everything of value via an online or in-person sale. This win-win strategy leaves you with a cleared-out attic, garage, and basement as well as a few extra bucks earned from whatever you can move on eBay or in a yard sale.
Automate Savings Account Deposits
If your company offers a payroll savings plan, sign up for it and send a portion of every check directly to a savings account. Consider a timed account, like a bank CD, if possible. If there’s no PSP where you work, create your own by choosing a specific percentage of each paycheck and depositing it every payday. If you choose a timed CD, be careful to fund it with money you won’t need to withdraw before the time limit. Otherwise, you’re defeating the purpose of the CD’s higher interest rate, and might have to pay an early-withdrawal penalty.
Get a Micro Job
Increase your income by taking on a micro job. Consider online and in-person opportunities. Possibilities for five-hour weekly jobs include freelance writing, dog walking, house sitting, being a personal shopper, or doing online tutoring. Even though this hack is more of a one-time than an ongoing thing, many people find that they can make a thousand dollars or more by getting rid of their unwanted appliances, artwork, clothing, tools, baseball cards, furniture, and sporting goods. Remember to clean up and refurbish the goods, take high-quality photos, and write sales-worthy descriptions for online sites.
Minimize Restaurant and Fast-Food Meals
One of the biggest budget leaks for most working adults takes place in restaurants and at fast-food drive-through windows. There’s no need to get extreme and stop enjoying life just because you want to save money. Instead, consider cutting down on the frequency of eating out, whether at nice restaurants or burger joints. Most people are amazed at the amount of cash they save by changing their food-related habits even slightly. The reason behind the power of this hack is the high relative cost of restaurant food. A smart way to make the technique work is to eat at home more often. You’ll likely discover that you end up consuming better-tasting, more nutritious foods, and that prep time is not as bad as you imagined.
