Monday, June 9, 2008

Tips For Creating Extra Room In Your Budget

With gas prices rising, many American families are starting to feel a financial pinch. My family and I have experienced a pinch for several years now due to layoffs and slow growth in the airline industry (I made less than $15,000 in 2005). We have learned several lessons about how save money.

First, take a close look at your spending. Most of us spend a lot of money on things that we don't really need. For example, do you really need a fancy new cellphone for $200 when you can get a free one? Do you really need all those extra cable channels? My cable company offers a minimum package of network channels for about $8 per month, a savings of $45 over the next package. Buying bottled water and $3 coffees also adds up quickly and is not necessary. Go to the library instead of Blockbuster and the bookstore. Most of us can find some areas where we can trim the fat.

Cars cost Americans a lot of money. Keep your old car after it is paid off. This will free up the amount of your car payment ($300-500), but that is not all. With your car paid off, you can reduce your insurance and drop the expensive collision coverage, saving more money. By shopping around for gas, you can also save money. Visit src=Netx to check gas prices in your neighborhood.

Another great source of savings is eating at home. A typical restaurant restaurant meal for my family of three is at least $15, even at a fast food restaurant. Multiply that by several times per week and it adds up quickly. Clip coupons for what you need and browse local supermarket sale papers. Many neighborhoods have a discount grocery store, such as Sav-A-Lot. Also, buy generic brands of food. The generic brands meet the same FDA standards as more expensive brands. In most cases, you can't taste the difference. In some cases, generic brands actually taste better!

Finally, a long term solution to solving your credit crunch is to get out of debt. It takes time, but paying off credit cards and loans will free up hundreds or thousands of dollars each month. It will also relieve the stress of wondering where your next payment is coming from. It will also enable you to start saving so that you won't feel the pinch in the future.

No comments: