In a world where there is always a new gadget to buy or candy to try, saving money isn't easy. The good news is there are several ways that you can save money without turning yourself into a miser. In fact, you won't have to change your behavior at all. In this article we'll explore five handy tips that don't involve canceling the cable TV or downgrading your Italian vacation into six nights on your grandmother's sofa. You may be surprised how a few simple changes can really add up.
Virtual Piggy Banks
It used to be that when we had change in our pockets at the end of the day, we'd toss it on our dresser or put it in a bowl or piggy bank. Budding scrooges rejoiced at how this loose change could quickly add up to a few hundred dollars that could then be used on groceries, entertainment or even placed in a Roth IRA.
The problem is that fewer and fewer of us actually use real money to buy things. Plastic has become the norm, and piggy bank makers have been forced into early retirement. There is an easy solution to this problem however: "Keep The Change" accounts.
Bank of America came up with an account that allows plastic addicts to create a virtual piggy bank. When you use your check card to make a purchase, the bank rounds the total purchase price of the item up to the nearest dollar. The difference is then transferred to your savings account. For example, if you buy a book for $7.25 for your nephew, a purchase price of $8.00 is charged to your checking account. The 75 cents is automatically popped into your savings account, and you get a chance to create savings and disappoint your nephew all at the same time.
Previously, Bank of America would match the virtual change deposits during your first three months in the program – for up to $250. While the program no longer offers a matching rate for new accounts, it is still a useful program for savings.
Education Matching Accounts
If you have kids, an easy way to add to their education savings is through a "Upromise Account." Membership is free and it will allow you to effortlessly squirrel away savings just by making regular consumer purchases. Retailers participating in the program agree to match a portion of the purchase price and contribute it to an education savings account. Currently more than 600 companies participate including Gap, Apple, Amazon.com, JC Penney and Office Depot. After you buy from a participating merchant, you then receive between 1% and 25% (depending on the purchase) of the money in cash back. The money can be used to save and invest or pay down a student loan. You can also choose to cash out the earnings. Unlike a 529 plan account, a Upromise account is not interest-bearing.
The merchants like the program because it provides cheap advertising and breeds customer loyalty, but what's really important to consumers is this is essentially free money if you were going to make the purchase anyway.
Be Smart With Your Car
Maintenance manuals for many cars suggest you should fill the tank with premium fuel. Often you can get away with a lower grade without hurting your engine or your performance. Check with a mechanic to see if you can downgrade; the savings of 20 to 30 cents per gallon can easily add up to $100 or more for the year. One hundred bucks for pressing the "89" button instead of the "93" seems like a pretty good deal.
Here are some additional tips from the Car Care Council on how drivers can save money.
- Properly inflate your tires. This simple move can help prevent an accident and provide you with better traction. It could also give you better gas mileage.
- Replace your air filter. A dirty air filter causes an improper fuel-to-air mixture, which ruins fuel efficiency. Replacing your dirty filter can improve mileage.
- Don't drive aggressively. Hard accelerations and aggressive driving can cost you as much as 33% of your efficiency on the highway and 5% in the city.
- Keep it under 60. Gas mileage suffers badly at speeds above 60 mph. Every 10 mph above 60 mph costs you as much as an additional 10 cents per gallon.
- Clean out your trunk. Those golf clubs you drag around every day (despite the fact there is snow on the ground) cost you. Every 100 pounds of extra weight costs you between 1% and 2% fuel efficiency.
- Check your gas cap. About 17% of vehicles have a gas cap that is either damaged, loose or missing, the Car Care Council estimates. Without a proper cap, the gas in your tank vaporizes, and so too does your money.
Use Less Juice
One of the biggest expenses that comes with owning a home is the utility bill. The good news is that there is a way to save a bundle on your electric, again, without really trying.
By simply replacing your existing light bulbs with energy-saving compact florescent bulbs, you can save a surprising amount of money in the long run. These bulbs use up to 75% less energy than a normal bulb. In addition, they are said to last five-to-10 times longer than the more traditional bulb. The initial cost can be a downer; they cost anywhere from $2 to $8 each depending upon the merchant. But think of it as an investment, as over time they can save the homeowner a lot of green.
Other simple tips include turning the lights off when you leave a room and purchasing a thermostat with a timer that will automatically adjust your house's temperature when you are sleeping or at work.
Give To Charity
In addition to helping people in need, giving can be a great way to obtain a tax deduction. Every year consider going through your attic or your basement and giving away old toys or clothes to a registered local or national charity such as the Salvation Army. It's what the IRS calls a charitable donation; giving away something you no longer need or want is much better than simply tossing it in the trash.
Always take a picture of the things you donate in case you are asked to provide documentation. In addition, always obtain a receipt from the charity itself in order to support the deduction on your tax return. If you are giving for the sake of the deduction, it is important to make certain that the charity you are donating to is legitimate and that you will receive a deduction for your donation.
Saving for the future doesn't have to mean a big sacrifice in the here and now. The trick is to watch for things in your everyday life that can be handled more efficiently and to watch for deals and promotions that already coincide with your current spending habits.