Most of us have a certain weakness when it comes to spending, even if we do not realize it. The areas where we waste money may be small, but over time, these can add up, worsening our financial situation. Finding these and addressing them may allow us to stop living from one paycheck to the next and even begin investing or saving for our future.
Step 1: Stop carrying credit card balances and pay off the amount due in full each month. Carrying a $1,000 balance on a 20 percent interest rate credit card means we spend $200 each year on interest. That money can be better spent elsewhere or saved in a high-interest savings account.
Step 2: If your auto owner manual states that regular gasoline can be used in the car, use it rather than premium gas. Ensure that tires are properly inflated because this ensures the optimum gas mileage. Check the owner manual for recommended frequency of oil changes, rather than listening to the repair shop recommendation of every 3,000 miles.
Step 3: Adjust the cell phone plan to reflect the level of usage. Billshrink.com is a Web site that allows individuals to evaluate their usage and determine the best plan. A pre-paid cell phone is another option. Plan rates can be compared at myrateplan.com.
Step 4: Eliminate unhealthy habits like smoking. In addition to the cost to purchase cigarettes, smokers pay more for health, life, auto, and homeowner’s insurance. Indoor tanning is another habit that should be eliminated, as it carries a ten percent tax and is one of the worst carcinogens, according to the World Health Organization.
Step 5: When their prices are lower, select generic or store brand food, prescription drugs, and clothing rather than brand name products.
Step 6: Stop purchasing single-serve bottled water, soda, and coffee. Instead, drink tap or filtered water, brew coffee at home, and buy soda in bulk.