Give Yourself a Raise

It is said that at least half of Americans have no idea where their money goes from day to day. If you are planning to save money this year, one of the best ways to do so is to figure out exactly where your money goes and cut out (or at least reduce) unnecessary expense wherever possible. Here are just a few unnecessary expenses that may be draining money from your wallet:

Magazines: Magazines may be fun to read, but they are expensive when you buy them on impulse at the grocery store. If you really enjoy a particular magazine, it’s much less expensive to subscribe to it. For instance, a popular women’s magazine that normally sells for $6 an issue is less than $10 a year for a subscription. Search to compare prices.

Buying the snack pack size: If you pack a lot of lunches or carry small portions of snacks, you may find yourself purchasing pre-packaged snack size products. It is actually much more inexpensive to buy in bulk and portion the product into snack sizes yourself.

Extended warranties: Buying the extended warranty isn’t always the right decision. If your purchase is already covered by the standard warranty, your credit card and/or your homeowner’s insurance, that may be good enough.

Eating out: If you keep track of no other expenditures, keep track of the money you spend when eating out. Yes, this includes lunch, dinner and snacks. Many people are rather shocked when they add up their food purchase for a day. Making your own coffee in the morning and bringing a lunch to work, could save you literally hundreds of dollars each month.

Buying name brands: If you’re still buying brand name goods at full price, it is long past time to start buying store brands or generic. Compare the labels. Most products have the exact same ingredients, or similar enough that you won’t be able to tell the difference. It doesn’t hurt to give them a try.

Paying too much interest and fees on debt: You’re making the credit card company richer while you make yourself poorer. Fees for late payments, cash advances and sky-high interest rates can add up to thousands of dollars each year. All money that could be going into your pocket instead of theirs. Pay off your debt as quickly as possible, make payments on time, don’t bounce checks, and request that the credit card company lower your interest rates.

Buying a new car every few years: The average American buys a new car every 3 to 5 years, yet modern cars last 10+ years. Consider also that a brand new car loses 20-40% of its value within the first year that you own it, roughly 15% the second year, 13% the year after that and so on. A new car can be a huge money drain on your wallet. In the end, it’s a far bigger money saver to repair your car (or just learn to live with the older model) than it is to buy yet another new car.

During rough economic times it is more important than ever to realize where your money is going and make as few expensive and unnecessary expenditures as possible. Spend, and save, wisely and when the recession is over, you may be in better financial shape than you were when it started.