Six tips from planning gift giving well in advance to paying down credit cards can help you make financial cuts.
Released September 2, 2009
LOGAN, Utah – In today’s economy, cutbacks have become a way of life. Consider these tips to make your dollar stretch.
- Pay down credit card debt. Interest rates for the safest investments such as money markets and certificates of deposit are currently hovering near 1 percent. At the same time, rates on credit cards have jumped to 25 percent or more. An extra $100 toward a credit card payment saves you more than $2 each month. The same amount in a money market account earns 12 cents a month. It makes sense to put the money on the credit card, and, there is absolutely no risk involved.
- Track your spending. Make sure your money is going where you want it to go. Look over your checking, credit card and other records each month to monitor your spending. If you still have money that seems to disappear, use a small notebook for a few weeks to literally track every dime you spend. A couple of fountain drinks a day can turn out to be more than $3 a day or $700 a year that is flushed away.
- Use the step-down approach to help get your spending under control. It is often counter-productive to drastically change or eliminate spending patterns all at once. Instead, modify your spending a step at a time until you reach your goal. For example, if movie night each week is important to your family, try the dollar shows or rent a movie once or twice a month to maintain the experience but to save on costs. Or, if a haircut costs $15 each time you go to the barber, consider alternatives. Go less often or go to a barber college to save money.
- Establish a short-term emergency fund for your household. Plan to set aside money each month until you have $500 to $1,000 in an easy-to-access account. The interest you might earn on the account is almost meaningless. But if money from the account keeps you from adding a $600 auto repair bill to your credit card balance, the savings can be significant.
- Plan gift giving well in advance. For birthdays, Christmas or anniversaries, you can save substantial amounts of money by taking advantage of sales throughout the year.
- Weatherproof your home. Keeping warm air from escaping through cracks and holes during the winter and cool air from doing the same during the summer can save money. Visit your local hardware store to get materials and advice if needed. Simple caulking and weather stripping can reduce energy costs by more than 10 percent.
These tips and more can be found at http://www.utahsaves.org. Utah Saves is a statewide campaign designed to improve household money management.
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http://extension.usu.edu/htm/news/articleID=6007
Writer: Julene Reese, 435-797-0810, julener@ext.usu.edu
