Save your money with these helpful tips
One, of course, is to generate more income. That, however, is often much easier said then done (and, in many cases, not possible). The second is to decrease the amount of money you spend (here ‘a penny saved’ truly is ‘a penny earned’). This, too, can be difficult, but, for the overwhelming majority of wage earning consumers, never totally impossible. Its simply a question of setting priorities, and taking two steps: first, where available, finding and choosing less expensive options for those goods and services that you need, and, second, recognizing that there’s a difference between those things that you need and those things that you like or want, but can do without. Towards that end, now and going forward, Cash-Flow Tips will present less expensive options for those goods and services that people need, and point out and suggest goods and services that consumers might consider decreasing or eliminating altogether from their monthly budget. Here’s the first six.
I. Cable TV - Many, if not most people now subscribe to cable television, and most include in their cable “package” some and often a number of movie “premium” channels. The question is – do you really need these premium channels? And, even if you admit that you don’t, but you simply can't bear to give up your “movie fix”, much less expensive options – “Netflix” movie rental by mail service, for example – are now available.
II. Newspaper Subscriptions – You, like many, may be in the habit of subscribing to one or more daily newspapers. But, think about it, how often do you actually read the newspaper(s) delivered to you? And, if you do, are the newspapers available to you elsewhere (for example, copies may be available to read at your place of work, or, available without charge online). I am a BIG advocate of people staying informed, and reading one or more newspapers daily is one of the best ways to do so. But, if you don’t actually read the newspaper(s) you subscribe to at least 5 out of the 6 or 7 days its delivered to you (or if its available to you free of charge elsewhere) consider cancelling your subscription and only buying the newspaper – from a news stand when you know you’re actually going to sit down (or, if you’re a subway commuter stand up) and read it.
III. Magazine Subscriptions – As with newspaper subscriptions, people often tend to order magazines, then automatically renew their subscription each year even though they only (sometimes barely only) leaf through the publication(s) when they receive it. So, here’s a rule of thumb for magazines: Unless you actually look forward to receiving your copy of Whatever Monthly, and you actually read at least 50% of Whatever Monthly each time you receive it, cancel your subscription.
IV. Loans – Check your payday loan rates and coverage from time to time, or whenever your situation has changed (for example, if you’ve moved to a different town, or, even, neighborhood) to see if you qualify for a lower premium. If there are a number of drivers in your family, check to see if a family plan or individual policies is less expensive (the former will almost always be cheaper). If for some reason you’ve recently purchased an umbrella loan policy (for example, to cover investment real estate you’ve purchased) check to see if this will allow you – as it sometime does – to lower the repayment o your personal loans (since the umbrella policy will now kick in at higher amounts). You can look into Jamie's Pay Day who offer a payday consolidation loan.
V. Cell Phone Service – Evaluate your cell phone service from time to time to determine what you really need in terms of coverage area and monthly hours. For example, if you make all or most of your long distance calls from a home land-line, see if you can lower your monthly cell phone bill by reducing your cell’s coverage area; if you don’t use your allotted minutes each month, switch to a less expensive plan with less minutes and/or one that allows you to roll unused minutes forward for future use. If your cell service includes any add/on services that you pay for but seldom use, cancel them. Conversely, if you find that 75% or more of your calls are made from your cell phone, check to see if it may be cheaper for you to expand your cell service and get rid of your home land-line all together. Once your initial (in most cases) one or two year mandated cell service contract period is up, shop other cell companies. There’s a lot of competition in the industry, and you can often find better service, better coverage and/or a better overall deal with another company. For example, if most of the people you call use a particular service, and that company offers unlimited calling minutes to others on their service, you monthly cell phone bill may be much less expensive on that service’s cell network (and, now that cell phone number portability is required, moving to another cell phone company is relatively easy).
VI. Energy Bills – Making even small changes can sometimes drastically reduce your energy bill. Two examples – yearly furnace check-ups and tuning, and installation of programmable thermostats. In other cases, larger changes – such as installing energy efficient windows and/or attic insulation can greatly lower your energy bill (thus paying, relatively quickly, for the cost of the upgrade, while increasing the value of your home). In some cases, special financing may be available for ‘energy efficient’ upgrades (or for building a new home that is energy efficient). Check with your heating contractor, fuel supplier and with the U.S. Department of Energy
VII. Overseas Calling Cards – Whenever calling overseas, be certain to purchase and use an overseas calling card specific to the country you are calling. (I.E. If you’re calling India from the U.S., buy an India International Calling Card, not a general International Calling Card. The savings can be astronomical. For example, the cost of calling India, from Boston, using a regular long-distance carrier, from your home phone, for just 20 minutes, costs approximately $75. The cost of calling India from Boston using a general international calling card for 2 hours would be approximately $5- $10. However, there are international calling cards directly to India, that give you unlimited calling time for one call (i.e. – so long as you don’t hang up, you can talk as long as you want) for as little as $2. (International calling cards are available at most convenience stores.)
I. Cable TV - Many, if not most people now subscribe to cable television, and most include in their cable “package” some and often a number of movie “premium” channels. The question is – do you really need these premium channels? And, even if you admit that you don’t, but you simply can't bear to give up your “movie fix”, much less expensive options – “Netflix” movie rental by mail service, for example – are now available.
II. Newspaper Subscriptions – You, like many, may be in the habit of subscribing to one or more daily newspapers. But, think about it, how often do you actually read the newspaper(s) delivered to you? And, if you do, are the newspapers available to you elsewhere (for example, copies may be available to read at your place of work, or, available without charge online). I am a BIG advocate of people staying informed, and reading one or more newspapers daily is one of the best ways to do so. But, if you don’t actually read the newspaper(s) you subscribe to at least 5 out of the 6 or 7 days its delivered to you (or if its available to you free of charge elsewhere) consider cancelling your subscription and only buying the newspaper – from a news stand when you know you’re actually going to sit down (or, if you’re a subway commuter stand up) and read it.
III. Magazine Subscriptions – As with newspaper subscriptions, people often tend to order magazines, then automatically renew their subscription each year even though they only (sometimes barely only) leaf through the publication(s) when they receive it. So, here’s a rule of thumb for magazines: Unless you actually look forward to receiving your copy of Whatever Monthly, and you actually read at least 50% of Whatever Monthly each time you receive it, cancel your subscription.
IV. Loans – Check your payday loan rates and coverage from time to time, or whenever your situation has changed (for example, if you’ve moved to a different town, or, even, neighborhood) to see if you qualify for a lower premium. If there are a number of drivers in your family, check to see if a family plan or individual policies is less expensive (the former will almost always be cheaper). If for some reason you’ve recently purchased an umbrella loan policy (for example, to cover investment real estate you’ve purchased) check to see if this will allow you – as it sometime does – to lower the repayment o your personal loans (since the umbrella policy will now kick in at higher amounts). You can look into Jamie's Pay Day who offer a payday consolidation loan.
V. Cell Phone Service – Evaluate your cell phone service from time to time to determine what you really need in terms of coverage area and monthly hours. For example, if you make all or most of your long distance calls from a home land-line, see if you can lower your monthly cell phone bill by reducing your cell’s coverage area; if you don’t use your allotted minutes each month, switch to a less expensive plan with less minutes and/or one that allows you to roll unused minutes forward for future use. If your cell service includes any add/on services that you pay for but seldom use, cancel them. Conversely, if you find that 75% or more of your calls are made from your cell phone, check to see if it may be cheaper for you to expand your cell service and get rid of your home land-line all together. Once your initial (in most cases) one or two year mandated cell service contract period is up, shop other cell companies. There’s a lot of competition in the industry, and you can often find better service, better coverage and/or a better overall deal with another company. For example, if most of the people you call use a particular service, and that company offers unlimited calling minutes to others on their service, you monthly cell phone bill may be much less expensive on that service’s cell network (and, now that cell phone number portability is required, moving to another cell phone company is relatively easy).
VI. Energy Bills – Making even small changes can sometimes drastically reduce your energy bill. Two examples – yearly furnace check-ups and tuning, and installation of programmable thermostats. In other cases, larger changes – such as installing energy efficient windows and/or attic insulation can greatly lower your energy bill (thus paying, relatively quickly, for the cost of the upgrade, while increasing the value of your home). In some cases, special financing may be available for ‘energy efficient’ upgrades (or for building a new home that is energy efficient). Check with your heating contractor, fuel supplier and with the U.S. Department of Energy
VII. Overseas Calling Cards – Whenever calling overseas, be certain to purchase and use an overseas calling card specific to the country you are calling. (I.E. If you’re calling India from the U.S., buy an India International Calling Card, not a general International Calling Card. The savings can be astronomical. For example, the cost of calling India, from Boston, using a regular long-distance carrier, from your home phone, for just 20 minutes, costs approximately $75. The cost of calling India from Boston using a general international calling card for 2 hours would be approximately $5- $10. However, there are international calling cards directly to India, that give you unlimited calling time for one call (i.e. – so long as you don’t hang up, you can talk as long as you want) for as little as $2. (International calling cards are available at most convenience stores.)
What to do
Get the statements
Pull out all recent credit card account statements. You must first make sure the charges are legitimate. Most creditors reserve the right to charge over-limit fees, late fees and annual fees. These are legitimate charges. However, if you find unauthorized charges on your account, you must immediately contact your lender's fraud department, as you may be a victim of identity theft. Add up all of your debt. Then add up the value of your assets: house, cars, retirement accounts and investments. Calculate your total net worth by subtracting the total of your debts from the total of your assets. This may be sobering. It is the first step and will help eliminate any denial. Do the math Calculate your debt-to-income ratio (DIR) if the charges are legitimate. The majority of lenders will not negotiate lower fees, interest or balances unless you can prove--with documents--a financial hardship. To calculate, divide the sum of all monthly bills by your gross monthly income. A DIR over 50 percent shows a financial hardship. |
Investigate
Get credit report
Pull your credit report at Annual Credit Report for a full picture of your finances. Using this document, decide if you need to negotiate a settlement. Debt settlement is a negative mark on your credit that could last for seven years, but it will significantly reduce your total balance. Start negotiating Call your creditors to open negotiations. Have a payment in mind. Ask for the cancellation of all late fees, over-limit fees and any processing fees. Indicate your willingness to begin repaying the account. In addition, be prepared to make a one-time, good faith payment to show your ability and willingness. While you’re at it, simply ask for a lower interest rate. If you have a large amount of debt but pay the accounts on time, your credit may not be too bad. Lenders might be willing to lower your rate to retain your business. |
Talk
Keep haggling
Counter the creditor's offer. You should go through a couple rounds of haggling. You may need to speak with an account supervisor to effectively handle these negotiations. The goal is to significantly reduce the existing and future fees on your accounts. Get agreement in writing Ask for a copy of any agreement in writing. This is especially important if you decide to settle your accounts. Make sure to carefully look over the agreement before signing it. If your debt is extreme … Liquidate your accounts if you are in serious financial trouble. While this may drastically alter your retirement plans, it will quickly reduce your debts, perhaps giving you a clean slate, and put you back on the path to financial health. (Remember that cashing out on retirement plans, such as 401(k)s and IRAs, will trigger serious tax and early-withdrawal penalties if you are under 59 and 1/2.) |
Action
Live within your means
Reduce most of your discretionary spending, especially all luxuries. Reducing these expenses will free up extra disposable income that can be used to pay lump sums against your highest-interest debts. Beg Ask creditors for hardship plans if you still are struggling with bills. These are proprietary programs that help consumers get back on their feet. Understand that most hardship plans are short-term (often six months) solutions designed to give you a brief reprieve. |