If the ongoing recession has taught people anything, it’s the need for saving money. Many people were caught off guard by the recession, and studies have shown just how little men and women had saved before the bottom fell out on the economy.
In a 2011 poll from the National Foundation for Credit Counseling, 64 percent of respondents admitted they would not be able to rely on their savings account if a $1,000 unplanned expense suddenly popped up. And the problem of not saving enough is not exclusive to Americans. A 2011 survey from the Canadian Payroll Association indicated that 57 percent of the nearly 2,100 respondents admitted they would be in financial trouble if their pay was delayed by just one week, while 40 percent expect to delay their retirement due to lack of savings.
Such figures should be enough to motivate men and women to start saving, not only for retirement but for an unforeseen event like a layoff that could put finances in serious jeopardy. There are ways to save money that don’t require too much sacrifice.
Re-examine existing insurance policies. An insurance company is not likely to call you and offer lower rates. However, a consumer often finds his or her company is willing to lower rates for those who initiate the conversation. For example, motorists who have gone a significant amount of time since their last speeding ticket or traffic accident can often renegotiate their auto insurance policies and earn a lower rate. Some companies will automatically lower these rates, while others need some prodding. Often the threat of cancellation is enough to motivate a company to reduce insurance costs. But policy holders won’t know unless they try. If the company claims there’s no wiggle room, start shopping around for a new company, and don’t hesitate to jump on a more affordable policy, even if it can be a hassle to change companies and policies.
Another thing to consider when examining insurance policies is whether the level of coverage is still necessary. For instance, men and women who opened an auto policy when their car was brand new might not want full coverage now that the car has gotten older. Reducing coverage can save significant amounts of money.
Shop sales. Shopping sales is a simple way to save, yet many people still don’t take advantage of sales. Whether grocery shopping, shopping for home furnishings or adding on to your wardrobe, shopping sales is a great way to save substantial amounts of money. When visiting the grocery store, sign up for the store’s club membership, which in many cases automatically earns you sale prices as long as you remember to swipe the club card before paying. When shopping for clothes, peruse the clearance racks, especially at the end of the season, when stores simply want to get rid of items and, as a result, mark them down heavily. The items will still be wearable next season, and you will have saved a lot of money without doing much work.
Contact your credit card provider. Credit card holders in good standing almost always have the means to saving money at their disposal. That’s because the credit card company will likely be willing to lower your interest rate if you are a customer in good standing. Lowering the interest rate can save card holders significant amounts of money, but it’s still ideal for card holders to pay off their balances each month and avoid interest accruing in the first place.
When speaking with a representative of your credit card company, discuss any additional benefits the company might provide. For example, some cards have an incentive program that provides cash back on qualifying purchases, which might include groceries or airline tickets. If your card offers such incentives, take full advantage of them, just be sure to pay off the balance in full each month.
Pay extra each month on loans. If paying extra money each month sounds like an odd way to save money, keep in mind that paying ahead on loans can substantially reduce the amount of interest that accrues over the course of the loan. Some loan agreements include prepayment penalties that actually penalize customers for paying ahead. But if the loan agreement has no such penalties, sending a little extra each month reduces the loan’s principle faster, meaning borrowers will pay less in interest and pay off their loans faster.
Saving money is something many people insist they will start doing tomorrow. But it’s the little changes you make today that can add up to significant savings down the road.