To my Pinoy readers, just for fun – – click on the audio below. I am a solid fan.
Being a big fan of Suze Orman, I have always paid close attention to her advice on saving money. Mentioned in my blog entry before – little things that you do, do count. Morning coffee from Starbucks that would cost 3.00 to 4.00 USD a pop could easily be saved and invested if you make your own coffee at home. There are more ways you can save and make your money work for you. I practice most of these but would like to find other means. So if you have any thoughts or suggestions, let’s discuss it.
* If you are using a credit card to pay your monthly bills only to pay off the whole thing at the end of the month anyway, you should look for a card that will provide you cash back in return. I had Citibank Select at one point and they used to offer 5% cash back for any groceries or gas purchased using the card. The rest of your purchases gathered 2% cash back. What I did was to pay my bills with the card and pay off the entire bill every month. In a six month period, I received 300.oo USD as a cash back check. Citibank got wiser and changed the percentage of cash back to 1% for every purchase. I cut the card in half. There are always better cards out there and if you take care of your credit, it wouldn’t be difficult to switch to another card.
* Invest money on a Mutual Fund account using dollar-cost-averaging. If you can spare 50.00 to 100.00 USD a month, purchase mutual funds in increments. If you purchase 50.00 USD worth monthly, the price of the mutual fund may increase or decrease -you may get more funds in one month than the other – yet you will be at a bigger advantage than purchasing the funds once at one price. If the stock market declines, like it did yesterday (Dow lost 400 something points), you would have lost more of your money than if you had purchased your funds in increments. I’ll show you the computation at a later entry and discuss that at length.
* When shopping online, use the price shopping engines to search for lower price such as Froogle, Nextag, MySimon and other services. Online prices are not usually the lowest so you better be careful. Sometimes, it would be cheaper to drive to your local Target or Walgreens to get the cheapest price.
* Pay yourself first.
o Invest in your 401K
o Create an automatic transfer from Checking to your Savings
* Technology will always continue to change. Buying things later than sooner when new items come out may payoff for you. Plasma TV’s used to cost 5,000 – 10,000 USD when it first came out. Now, the plasma TV’s have dropped significantly in price with better quality. Again, the question to ask is, ‘Do I really need it right now?’ Avoid instant gratification. If you can wait – wait.
* Try to pay cash for everything. Credit cards have become pits of hell when it comes to interest rates these days. I cannot believe credit cards are charging as much as 24% in interests. If you can’t pay cash – don’t play.
* Do not be afraid to return items. If you purchased something and you never opened it, and later changed your mind and want to return it – DO IT! I know people who are ashamed to return items. If the item is in the same condition when you purchased it and regretted the purchase later, stores give ample time for you to return the item. I recently bought Prada sunglasses, and an Abercrombie Jacket. All in all it cost me approximately 400.00 USD – – two days later, I thought – ‘Wow, I really don’t need this right now. ‘ I went back to the store and gained 400.00 USD back.More…
* If you are purchasing a high-priced item and you know you have the cash to support and pay it in full, use a major credit card. In this way, you are protected most especially if you are purchasing online. I have found American Express to be the best in customer service when it comes to assistance in getting your money back from a merchant.
* If you inadverntently miss a payment to your credit card, don’t be afraid to call your credit card when you are charged a late payment fee and ask for a waiver. They will usually waive it for you as a one-time courtesy. Make sure you don’t miss a payment the next time.
* As much that this is a cliche, save your pennies cause – a penny saved is a penny earned.
* Last but not the least – – open your heart to charities. This doesn’t mean you are giving your hard-earned money away, you are just making room for more money to come in.