10 Starter Tips on How to Save Money and How to Make Money Without any Effort.
Many people get overwhelmed by the idea of getting their financial life in order and consequently they never end up doing it. To get you started, I’ve listed a few tips so you can get a handle on your financial life and finally start saving and making some money with almost no effort.
1. Know your Credit Score
According to a survey, only 42% of Americans know their credit score. This is pretty appalling to me. Knowing your credit score may be the single most important piece of information you will need at any stage in life and is incredibly important to save money on big ticket items. Obviously, you can still do things like buy a home, or a car without knowing it. The point here is that once you know it, you can start improving it.
When I first started with Credit Karma, I had a score around 680. Now, almost two years later I have a 751.
I ran everything I did through their built in credit score simulator. It allows you to increase credit card limits, add new credit cards, add loans, etc., and then shows you what your credit score will likely be based on the parameters you input. This is pretty critical when it comes to determining how many credit cards, if any, you should sign up for, as well as monitoring your hard credit inquiries, too many in a month can do serious damage.
I highly recommend signing up for Credit Karma if you haven’t already as they are the best and only real player in the industry as it stands now.
2. Start a Budget
This one is pretty self explanatory. The best way to do this is to take a week and track your spending. Try your best, although it may be hard, to do things as you normally would. When you track everything you spend, you’ll automatically become more aware of your spending habits and save money. This will give you a good idea of where your paycheck is really going and what you can cut out of your weekly budget.
From there create a budget, some people like to micromanage and categorize their budgets into groceries, entertainment, gas, etc., but in our experience it’s easier to put a set dollar amount for each week. For example, Let’s set your budget at $250 dollars a week. This means you can start the week at the grocery store, get what you need and see how much money you have left. Factor in gas if you need it and you know what you have left for entertainment, date night and anything else. The first month that we budgeted in this manner, we saved just over a thousand dollars.
4. Get Credit Cards (aka. Make Money)
I might get harassed for this particular strategy but it has truly worked for me and my family. The key with any credit card is to never carry a balance, ever! I started using credit cards 3 years ago and to this day have never carried a balance. So, I guess the question you’re asking is why in the world would I choose credit cards, why not a bank issued debit card? Well, the answer is fairly simple and can basically be summised in one word, “Rewards”. But I’m obviously going to expound on this, why else would I put it on the list.
We pay for everything with credit cards. I literally mean everything. Utilities, groceries, entertainment, amazon purchases, gas, dining out, etc, etc.. [pullquote-right]I have bought well over $1,500 dollars in merchandise using only points.[/pullquote-right] We also receive ridiculous amounts of rewards points for doing it. In the past 2 years that I have been using credit cards in this manner, I have bought well over $1,500 dollars in merchandise using only points. This includes a fifty inch smart TV, an xbox one(yes, I’m a nerd), four fifty dollar gift cards to various stores and the list goes on.
The secret here is to go after the bonus offers that you so casually discard when you receive in the mail every so often. I have a particular love affair for Chase credit cards as their reward points are 100:1 with Amazon. Meaning 100 points equals 1 dollar. As opposed to American Express who is closer to 150:1.
We have a Chase Freedom and a Chase Sapphire, both of which came with 50,000 point bonus offers. that equates to 500 dollars on Amazon for doing nothing but using the card. Did I mention thats on top of the regular points you get for using them? They usually come with a time limit, the Sapphire was 3,000 in 3 months, which is pretty easy for most families and couples, if your single and renting, try paying your rent with it. They usually charge a service fee, but it’ll be worth it until you hit the 3k, then turn it off. [pullquote-left]If you don’t have an emergency fund then it can act as a security blanket in case you get stretched or have an unexpected expense come up.[/pullquote-left] The last point here, it also offers a certain level of security. If you don’t have an emergency fund then it can act as a security blanket in case you get stretched or have an unexpected expense come up. Just to note once again, I’m not advocating blindly using credit cards and racking up insane amounts of debt, thats obviously not the goal here. The goal is to get free stuff without spending extra money.
4. Trim the Fat
This one really bothers me, here comes a rant. If your buying coffee 2-3 times a day, stop. if you really need it that badly, invest in a large thermos and brew enough at home to take with you for the day. It’ll take an extra ten minutes of your morning and will save money, lots of money. Let’s do the math shall we? 1 16 oz cup of coffee will run you a conservative $2.50. Twice a day, five days a week, is 25 dollars, not too bad, but notice I didn’t include Saturday and Sunday. That still puts us at 100 dollars a month. Which is our power bill every month. also, $1,200 a year. Can you really afford to do that? maybe you can, but I can make it at home better than I can buy it out. even if you buy the expensive stuff at $15 dollars a pound, that one bag will likely last you 2 weeks or longer making 48 ounces a day.
Eating out is a worse offense. Generally, you can make healthier meals for cheaper than you can go out and get something for you and your spouse, and you’ll likely have leftovers the next day for lunch.
Bottom line here: Stop doing stupid things with your money and you’ll have more of it.
5. Don’t Use Cash
Refer to #3. Cash is outdated, it doesn’t allow us to track our spending, and there is no record of it to analyze our pitfalls. I understand the envelope system, but is it really practical. I won’t carry around all that money all the time in envelopes and I don’t get my precious rewards points for using it.
6.Start a Savings Account
Having a savings account is not about the interest, because these days, there practically is none. It’s about having a place to store the money you are not supposed to touch. A prime example of this is the all important “Emergency Fund”. The money that is there basically in case you lose your job. It needs a place to live that is safe from your everyday desires so that you don’t just drop it all on the new ten thousand dollar curved 5k super HD TV that came out yesterday or the new line of MK bags(The ladies know what I’m talking about).
7. Put Money in That Savings Account.
I opened a savings account in college, with the intent that I would save money and one day find myself with an insurmountable amount of money that just happened to end up there. Well, to open it, I only had to deposit five dollars. So that’s exactly how much I put in. A year later, there was still exactly five dollars in it. See where I’m going here? If you don’t commit to putting money in it, then there’s no point in starting it. I suggest doing a little every week. Search Pinterest for 52 week savings plan and adopt one immediately.
8. Find an Inexpensive Hobby
This can be anything that alleviates the boredom that causes you to want to go out and spend money. In most places in the U.S, you can’t do much of anything without spending money. So finding something to do that doesn’t cost a lot will end up saving you a fortune. One of my favorite ideas, assuming you enjoy reading, is to join a public library. If theres not one close to you, go a county over and pay the fee to join. It is almost always insanely cheap, usually 40-60 dollars a year and you will have plenty to do when you get bored.
9. Be Aware of Your Spending
This is echoed throughout the previous steps but it’s worth hitting on quickly one last time. If you don’t know where your money is going, then you’ll never be able to save it. The best strategy here is to create a spreadsheet listing the expenses you are definitely going to have every month. Rent/Mortgage, Utilites, Power. Then take the rest of the money, and find a reasonable amount to spend each week that will leave you with some savings at the end of the month. You can always adjust the amount you spend at the end of each week if you find your having to starve yourself to hit your goal, or if it was just way too easy. It should take some effort to stay in budget.
10. Be Responsible.
Consider this your last warning, Credit cards are not for the weak hearted. If you don’t think you have the self control to keep yourself from spending more than you are supposed too. Then do not apply for one! The rewards are not worth going into debt over, and that is exactly what the big CC companies want you to do, it’s how they make money. Try easing yourself into it by using a debit card first and tracking your spending, we keep a simple ledger of the totals of each purchase so we can see where we are at all the time.
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