There are few pleasant associations in such scenarios, but the truth is that saving money does not have to be painful.
In fact, once you have a plan in place, it’s likely that your life will go on the same as usual.
You’ll be saving money without even thinking about it. Here’s how to get started.
Assess Your Insurance Policies
Insurance is one of the easiest areas to begin with, if not the easiest. Yes, there is some pain up front, maybe an hour or two at most, as you examine the state of your current auto, home, or renter’s coverage, among other areas. After that initial time investment, though, you are home free. (That said, it’s wise to check every two years or so that you’re getting the best value for your money.)
So, whether your insurer is online or is a local insurance agency, get in touch with your agent. Ask about any discounts you qualify for, and review whether the coverage you had initially makes sense now that your vehicle is, say, four years older. Get a new quote from the agent, and shop around with a few other insurers. You could end up with savings of $50 or even $100 a month just from examining your various insurance policies.
Turn to Automatic Payments or Reassess Your Current Ones
Automated processes are a time-saver. They’re also your new best friend. For example, if you pay monthly on your mortgage, setting up automatic withdrawals every month ensures you will never be assessed a late fee again. You could even set up payments with an extra $100 or $200 a month toward the principal, and end up with your house paid off early.
Utility bills, credit card payments, and internet payments are a few other areas in which you can set up automatic payments and no longer have to worry about stamps and late fees. One caveat, though: If you know there is no guarantee you will have enough money in the bank for these expenses, you might want to skip the automatic withdrawals. Otherwise, you could face overdraft charges that are just as high as late fees, or higher.
Also, look at the automatic withdrawals you currently have. If you contribute 5 percent of your pay to a retirement plan but have gotten a pay raise, you could raise that to 7 percent, perhaps. You could increase what you’re paying toward your mortgage and car too, or boost what goes into your savings account.
Get Rid of What You Don’t Use Much
If you watch TV only a few hours a week, canceling cable TV and getting something such as Netflix instead could result in tremendous savings. Similarly, if you buy a lot of books, whether print or ebook, and read them only once, you could consider using the library more. This principle even applies to food, although you’ll have to be honest with yourself. If you buy fruit because you feel like you should but at least half gets spoiled and thrown out, start buying only what you will actually consume.
The above strategies do require some upfront action, but it’s smooth sailing from there on. As with anything, though, take some time every year or every two years to look at your insurance plans, automatic withdrawals, and general product and service usage patterns. A lot can happen in two years: A teen driver in your household could move out, you get a huge pay increase, or you start taking up biking and watch much less TV, to name just a few possibilities.