“Money can’t buy happiness, but it can buy you the kind of misery you prefer.”
- Author Unknown
Note: This guest post was written by personal development blogger Alex Shalman. You can check out his website here.
It’s definitely a good thing if you’re looking at an article about improving your finances. You’re either trying to pay off debt, or looking for better ways to invest. Both happen to be very productive activities. During the course of my winter break from school and holiday season, where I deviated from my regular schedule, I racked up a bigger credit card bill than I would have liked.
I’m certain that I’m not the only person around that was taken by immediate gratification, and I’m certain I won’t be the last. Regardless, what’s done is done, and now it’s time for us to strategically pay off the debt, and get back on the savings track.
Here are the strategies I have used for getting out of debt in the past, and the ones I’m going to employ over the next couple of months.
1. Don’t get into debt to begin with.
Right, I just told you that I didn’t do #1 this time around. So it’s not a lecture, rather than a statement of the obvious. Sticking to the budget, and saving up for large purchases is a much more effective way of being a consumer.
If you’re in debt and worried about the creditors it’s easy to forget to do this. However, it’s important to remember to put in at least 10% of our income into savings. Truth is, if you have been doing this all along, you might have had a savings account that will take care of that holiday spending without incurring interest on the credit cards.
3. Make extra debt payments.
Mortgages and other debts tend to accumulate thousands of dollars in interest debt. By making extra payments each month toward our dept we will be able to eliminate some of the interest and save in the long run.
4. Live beneath your means.
Consider that you don’t need the engine upgrade on your car, an extra bedroom in the house you aren’t using, or the latest ipod when you already have one. There are certainly endless ways to cut costs, and what you’re cutting can be tucked away.
5. Direct deposit your earnings.
When you direct deposit your paychecks, you can mark a certain amount to be automatically transferred to a savings account. This way you aren’t tempted to spend, and you don’t have to worry about it.
6. Ignore your raise.
If you happen to get a raise at the ol’ j.o.b. ignore the difference. Instead of taking this opportunity to spend more, use the opportunity to pay off more debt, or put more into savings, while not changing your life style one bit.
7. Create a second income stream.
If you happen to have a hobby that you enjoy doing, and can monetize it at the same time, this would be the ideal way to make a secondary income. Another good way is to create an information source, such as a blog, or ebook, in which you can share your expertise, and receive a monetary compensation in return.
8. Find out where your local library is… and actually go there.
This advice is coming from a person that is in the process of ordering 62 books from a list he just made. Seriously though, I regularly use my library in order to borrow free books, and free audio CDs to listen to in my car. For someone who’s biggest passion is personal development, this adds up to a big savings.
9. Downgrade your toys.
There are many things you can downgrade that will not only save you money, but save you time as well. You can downgrade your phone plan, your cable television, your blockbuster online membership, the monthly tanning salon charge, or whatever else you aren’t using, but are getting charged for.
10. Sell what you don’t use.
Many of us having things around the house that we haven’t used in ages such as clothes, gadgets, jewelry, etc. Not only can you declutter, but you can earn some extra money by auctioning your items off on ebay, or hosting a garage sale.
11. Freelance.
If you have a skill that is in demand there are many freelancing job boards, such as craigslist, where you can pick up a client in your spare time, and make some extra money.
12. Keep a little black book.
Keep records of people who borrowed money from you, and make sure gently remind them that the money is owed to you. Might as well tie up all loose ends.
13. Request a raise.
If you’ve been putting in good work at your job, it may be time that you deserve a raise. An employer can often overlook giving you a raise if they believe that you are willing to work for what they are paying.
14. The Fundamental.
Earn more than you spend. It’s that obvious, so let’s do it!
15. Cut down on meat.
Not only is meat more expensive than vegetables per serving, but you’ll also be saving the environment in ways you might not have considered.
16. Weather-proof your home.
Insulating windows, doors, attic entrance, basement entrance, and garage doors. Keep your heat in, in the winter, and keep your cold in, in the summer. Don’t you know that it doesn’t pay to air condition the whole neighborhood?
17. Use a digital thermostat.
You can program your AC and heat to turn off while you’re away at work, and turn on right before you arrive. This way you’re still comfortable, but save when you’re not using it.
18. Trees in the yard.
If it’s climate appropriate, planting deciduous trees such as maple, oak, or elm will provide shade in the summer to save on AC, while being leafless in the winter to not block the sun.
19. Use compact fluorescent light bulbs.
…instead of regular incandescent light bulbs. According to about.com if every US household switched just one bulb, it would be equivalent to taking 7.5 million cards off the road, and save energy to light 2.5 million homes for a year. To you it means you will be saving money on electricity while saving the environment.
20. Cook at home.
By cooking all your meals at home, and bringing food with you to work, you will be eating cheaper and healthier at the same time. It’s hard to make a healthy choice when you’re out and in a hurry, but cooking yourself you know exactly what you’re using for ingredients.
21. Plan ahead.
It’s easy to overlook periodical and seasonal expenses when formulating your budget. Think about the holiday shopping, important birthdays, car maintenance, and school supplies that you may need in the future. Put extra money in your budget for these things so you don’t deviate later.
22. Figure out your debt.
Take a sheet of paper and identify where you owe debt to. Use this information to formulate a pay-back strategy.
23. Highest interest first.
Take the highest interest debts that you owe and pay those first. You’ll end up saving a potentially significant amount of money.
24. A necessity list.
When you’re craving for the latest fashion accessory or gizmo that isn’t necessary to your immediate survival, write it down on your list. After a month has passed, see if the urge to get it has subsided. Chances are this is something you could do without and would be bored with in a month anyway.
25. Join a group.
Meetup.com offers free meetup groups and seminars for just about anything. Join a finance or get out of debt group in order to surround yourself with like minded people. Maybe you’ll meet some new friends whom you can enjoy low-budget activities with instead of the ballers you hang out with now.
26. Get the last model.
Some people live impulsively and must have the latest everything. From cell phones to cars, if they’re not in the newest model they aren’t satisfied. Take advantage of the fact that items depreciate in value very quickly and buy some things used. You get something functional for a fraction of the price.
27. Shop smart.
Ebay, buy.com, bens bargains, and an array of other frugal shopping sites give you the ability to find great deals. Save hundreds of dollars by shopping around and never pay retail.
28. Bring your lunch.
Whether you have to cook ahead for the week, or make time in the evening to just cook a day ahead, bringing your own lunch is cheaper and healthier. You know you use fresh ingredients, pay super market prices, and avoid traveling to get lunch. Save $3-5 a day for lunch and that’s $1460 a year on average.
29. Change that habit.
The daily latte ($4), the pack of gum ($0.75), the super-size meal ($0.60), the late night drive-through ($7.50) - you get the point. That alone will cost you nearly $4444 a year. Think you can live without it?
30. Have a monetary goal.
What is the reason that you want to save money for? Is it for retirement, an exciting adventure, or a material item that you’re just dieing to have? When you have your goal clearly defined you feel more motivation to achieve it. You’ll feel better saving money for the big pay out instead of blowing it away on instant gratification.
31. Save your change.
Let’s say that on average you have 50 cents left in your pocket at the end of the day. If you collect that money, and use the free coin star machines at Commerce banks, you will have saved $182.5 at the end of the year.
32. Public Transportation.
Instead of owning a car, paying a lease, splurging on gas, and insurance on top of that, simply take the bus, train, subway, or ferry. You’ll save big while saving the environment.
33. Use Rich Dad’s Percentages.
60% Expenses/assets/investments. 10% Donation. 10% Long-term savings. 10% Short-term savings.
Stay away from places, such as malls, where you will be tempted to spend.
35. Curb your addictions.
Every vice, such as tobacco, drugs, alcohol, porn, and junk food takes a toll on your health, wallet, and time. Eliminate the vices, and greatly improve your life.
Alex runs AlexShalman.com, a practical personal development blog that has enhanced the lives of many readers, moving them out of suffering and into a life of joy, love and success. He is committed to helping you discover your potential you.
You can check out his blog here (subscribe here) or check out some of his other popular articles: Seven Questions That Will Change Your Life, How To Become An Outstanding Person In Twelve Weeks, The Broken Myth of Relationships and 10 Traits To Be Perceived As A Winner.
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Awesome. Thanks for getting this up Ririan.
Don’t be invested in a crashing stock market …………………….
Great tips for long term saving,
thanks a lot,
Good Luck
Tracy Ho
wisdomgettingloaded
Excellent advice. Stay away from stores for sure and if you go, always know what you’re shopping for. Anything that tempts you, ask yourself whether you really need it.
Pretty good list, but I just cannot give up my crack, so no go on 35.
Another suggestion would be to give up any subscriptions to newspapers or magazines, a lot of that content can be found for free online anyways, and if you’re reading this list you obviously have internet access.
Great list. Curbing back our living expenses made it possible to save enough for our home– honestly, I never watch television so why would we have things like satellite or cable tv? I would also add that taking a walk or riding a bike when weather permits for entertainment as well as small errands adds up into some rather massive long term savings (as in one less car, no insurance, no gasoline charges, etc)
The toll of porn on your health and wallet cannot be overlooked. Imbalanced muscle building and a package of Good News every week for palm shaving really adds up.
Just yanking your chain. Great tips. Here’s one: look around your house and identify all the items you would sell back, if you only could. Think of the cash for the clothes you bought but never wear. Now resist buying them.
yes, yes, YES!
the only real way to help the environment is by having a smaller impact.
which happens to be its own form of ‘remuneration’.
reading this list and thinking about people sort of getting into it
(maybe spurred on by recession and credit worries)
makes me think about the signs that one sees when one is headed in
the right direction- correlation that one is traveling the
“wide and generous path” (lao tzu)
seriously they are not sneaky ways to save cash thats common sense!! i thort u were gonna give us some massive insight on how to earn quick cash or wipe out your debts lol sneaky tip for you————–if you buy a train ticket to london from manchester buy indivdual tickets for each stop of a couple of lengths rather than the ful journey and you can save up 2 £50 bargain!!!
Succesful garage selling would quickly improve our finance. I did this several times. Also it eliminate cluttering, but you should control your purchases afterward to keep it.
Colin Joss
East Lothian, Haddington
United Kingdom
Great ideas, thank you… This guy makes sense too
http://popblogculture.blogspot.com/2008/01/everyone-is-financial-guru.html
In all fairness the 35 suggestions on how to manage one’s finances are not sneaky. Iny fact their downright common sense. Although i agree many people are too senseless to understand these 35 tips prior to reading this page, there is nothing on this page that someone who graduated high school shouldnt know.
Good info overall, but I tend to disagree with the idea of paying the highest interest debt first. Usually, if you can start with your smaller debts, get those out of the way (while still paying at least the minimum on the rest of your debts), you can use the “additional” funds you were throwing at the smaller debts towards driving down the bigger ones. Plus, along the way, you get the satisfaction of feeling like you’re really accomplishing something by taking more and more creditors off your “to pay” list, rather than a year from now having just as many creditors, but just owing all of them a little less than you did the prior year.
Adding to Deuce’s great idea..
I sometimes follow his same strategy. This is important, because usually each debt usually has fix amount of fee, so eliminating small debts strategy can be good to apply to eliminate these fixed fees.
But it is important to remember that we must make sure that the total fee amount is much bigger than the interests..
Colin Joss
East Lothian, Haddington
United Kingdom
I think diversifying your income is the best way! I like that one. Great article, thanks.
Gud ideas… Anyways hard to follow
ok — so i’m not a big consumer anyway and i earn a lot more than i can spend so all of these seem self-evident except no. 27 — used to shop with amazon regularly (twice weekly). definitely saved on my barnes & noble expense but using buy.com has been a big extra saver. tried ebay but, while it’s great for hard-to-find items, regular purchases are actually vastly overpriced on ebay — there’s no low cost buy-now option on ebay. so ebay is for discretionary purchases only. buy.com is for stuff i really want (and it shows amazon’s prices too so i’ll use amazon if the price is lower).
ben’s bargains? are you kidding me? deal sites encourage you to buy crap you don’t need. that’s all i’ll say on the matter.
buy.com with it’s low fixed pricing for anything normal; ebay for very hard to find (but must-have) collectibles.
Great list. Sometimes people forget simple ways to save and have more money. I do some real estate investing and people always ask where to get down payment money. These are a perfect example of where to get the down payment. Thanks for the list.
www.thenumberslookgood.com
First of all i don’t agree with the whole message that you put out.
A great man once told me: “if you want to truly succeed you must first go in to debt”. Why? you may ask, well it’s pure logic. When you know that you have to work because you have to pay back a debt you will work harder because your survival instinct kicks in. You will work harder!
Saving money by saying that you don’t need something? Then what’s the purpose for saving money? You save money to be able to buy something, but if all your life you say that you don’t need something because you have something that’s less better than what you want, you will never evolve.
There is also a nice phenomenon you have to take in account, it’s called inflation. Inflation is usually bigger than bank interest rates, so if you store your money in a bank you will actually loose money because the inflation is bigger than the interest.
For those who don’t know, inflations is what keeps making the prices of stuff go up. It’s hard to explain but it’s directly related to the country’s economy.
Some of the advice is good but i don’t agree with all of it, lowering some expenses is good but never neglect yourself!
Money was invented so that i could be spent, not saved, to help your economy you must circulate money.
If you want to discuss more about this please feel free to email me.
Best regards, Alex
“Money can’t buy happiness, but it can buy you the kind of misery you prefer.”
- Interesting quote. I always liked my own personal alternate version:
“Money can’t buy me happiness, but it can buy me some time until I find happiness!”
Lots of great advice here. Some of which I’m doing, some of which I don’t.
Also not on the list which is extra “sneaky” and probably not suitable for the general public… when possible, borrow low-interest debt and invest in higher interest opportunities.
For example, some years ago my Dad did a cash-out refinance on his house at a low interest rate and immediately bought bonds yielding a higher interest rate at the time.
I also like to borrow money on 0% balance transfer offer credit cards and invest the cash in Money Market or other safe investments… using the interest gained to then pay down the principal on the borrowed money.
Eventually, I have the borrowed money without the debt.
Great list! I hope that I can implement the tips in my lifestyle.
Many of us having things around the house that we haven’t used in ages such as clothes, gadgets, jewelry, etc. Not only can you declutter, but you can earn some extra money by auctioning your items off on ebay, or hosting a garage sale. In this way we can make good sum of money throughebay strategies .
I think not getting into debt is one of the wisest things you can do. It’s also one of the best ways to improve your finances. The problem with debt that it has a habit of piling up. And even when you do manage to pay them, you are left with the feeling that you never get to save. You only pay for something that has already passed you by.
1. Spend less than you earn
2. Invest the difference
3. Invest again a part of the profit (from 2)
In regards to #19:
To those who would want to get into this, you should be forewarned that the Compact Flouresent Light Bulbs contain MERCURY! I mean, if one breaks in your house, you have to practically call in a hazemat unit to have it cleaned up.
This site explains the process well enough:
http://www.boston.com/news/local/articles/2008/02/26/what_to_do_when_compact_fluorescents_crack/
Also, I wasn’t aware that there were “Cards” on the road
But seriously, in terms of cars on the road, how many are there in the world and what kind of difference can be made with just 7.5 million. Assuming that this statement is accurate, we must also take into consideration that CO2 actually takes up less than one percent of the atmosphere and is also what plants happen to ‘breath’ in.
Don’t forget the financial toll that working extra long hours, or extra long commutes can add. Always a good idea to be sure you can not net more by doing less!