People are lazy by nature. I know, I’m guilty of it myself. It’s too easy to set up a process, get it running smoothly, and forget about it. Unfortunately, leaving things in a state of inertia can cost us money. But the good news is that there are probably dozens of things you can do in a few minutes that will benefit your bottom line.
Save and earn thousands with these tips
These tips are broad in nature, and can help you save or earn thousands of dollars over the course of a lifetime, or even over the course of a few years. Not every one of these tips may apply to your specific situation, but chances are you can apply one or more of these tips.
1. Money management and budgeting
The first step to organized finances is knowing and understanding where your money is coming from and where it is going. The next step is being proactive and managing your money instead of letting it manage you. Using a budget will help you control your spending and give you a better idea of where your money leaks are. Plug the leaks and control your spending and you can save thousands over the course of your lifetime. Where to start: Popular money management programs include Quicken, Mint.com, and a host of free online money management tools.
2. Paying and earning interest
Compound interest is one of the most powerful forces in the universe – which is why you want it working for you, and not against you! If you have debt, try this short exercise to see how much interest you are paying each month: Grab a recent copy of your bills, write down much you borrowed, your monthly payment, and how much you pay toward the principle and how much goes toward interest. The result may shock you!
Reduce the amount of interest you pay. Hopefully that exercise above helped you realize how much money you are giving away each month, and how much more money you could direct toward your personal goals. There are several ways you can reduce the amount of interest you pay, including a do it yourself debt consolidation plan, transferring the balance to 0% credit cards, applying for a lower interest loan, and increasing your monthly payments.
Increase the amount of interest you earn. If you are using a local bank for your savings account, you are probably earning less interest than you could with an online bank. Look for a bank that offers higher interest rates, no fees, and other features. You can also check out alternatives to high yield savings accounts for additional ways to earn more interest.
3. Not investing
Unless you are already wealthy you will need to save and invest for your retirement or other large expenses. Even if you are independently wealthy you should invest to grow your money. If you work for a company that offers a 401k plan, then you should be contributing at least the minimum to get the company match. Why pass up free money?
If your company doesn’t offer a company match, then there are other ways you can invest for retirement with a tax deferred retirement plan. One of the most popular ways to invest is with a Traditional or Roth IRA, which both offer tax benefits. I’m a huge believer in the Roth, and if you think it may be for you, then I recommend reading about how to open a Roth and where to open a Roth for more information.
4. Paying too much for insurance
I’ve been guilty of this in the past. Its too easy to set up your insurance once and forget about it. But insurance rates can change and it’s a good idea to get new rate quotes any time you experience a major life event such as getting married, having children, moving, etc. It’s easy to get an online insurance quote – just visit a site like Geico or AllState, type in a few numbers and receive your quote. Here are some additional tips for saving money on car insurance rates, and saving money on homeowners insurance rates.
5. Improve your credit score
Your credit score itself doesn’t make you wealthy or poor, but it can have a huge impact on the interest rates your are able to get when you apply for a loan. Take a few minutes to learn how your credit score is figured, then look at how you can improve your credit score. A higher credit score can save you thousands of dollars over the course of a long term loan.
Just a few minutes work can make a huge impact
None of these tips take long to implement. At most you are looking at 15-30 minutes of your time to potentially save or earn thousands of dollars. That is a small investment of time can pay off for years.