June 29th, 2011
Obviously financial well-being and homeownership go hand-in-hand. When assessing whether or not they’re in the position to become a homeowner, many people fail to consider their financial situation as a whole. If your budget is tight but you’re determined to own your own home, consider cutting from other places. You may find that all it takes is time and a little research in order to save some money.
In his article “12 Simple Ways to Save Money on The Home Front,” Neil Blair-Bennett offers some tips for saving that you may not have considered.
Switch – or threaten to switch – your credit card company. If you’re a potential homebuyer, you know that mortgage rates are competitive, and lenders are competing for your business. What you may not know is credit card interest rates are competitive as well.
Do your homework, and find out if there are any credit cards that will give you a better interest rate than you receive now. If you find one that is better or the same as your current rate, call your credit card company and threaten to switch. The last thing they want is to lose your business, so often they will match or beat the other offer. If you decide to cancel, make sure you have the new rate secured before you actually go through with it.
Make two extra mortgage payments – or any payments – each year. If you already have a 30-year fixed-rate mortgage, your interest will be greatly reduced over time when you make extra payments.
If you don’t yet have a mortgage, determine which of your current loans carries the highest interest rate, and make two extra payments towards that. Any reduction on the amount of interest will save you money over time.
Take the time to trim. There are probably places where you could be saving hundreds of dollars that you don’t even know about. Your cable company isn’t willingly going to call you and say, “hey, do you know you could be saving $50 a month if you combined your internet and cable?” So, do the research yourself. Consider your car insurance, cell phone plan, and any other services you have.
Use direct deposit and online banking. You know the old saying, “money burns a hole in your pocket?” Well, it’s true. If you don’t actually see the money, you’re less likely to spend it.
Keep just as much as you need to pay the bills in your checking account each week, and transfer the rest to savings. After a few months you’ll be surprised at how quickly the saving will build up.
Be thrifty. Being thrifty comes more naturally to some people than others, but make a conscious effort to save money wherever possible.
Using coupons and shopping at discount stores like Dollar Tree can save you tons on groceries and household items. The availability of online coupons and advertisements have made being thrifty a lot easier than it used to be. Some stores will even accept coupons from their competitors.
Sign up for free rewards programs, and shop at those stores consistently. For example, pick one grocery store with a good rewards program (points from Stop & Shop can be used to save on gas from Shell) and do your food shopping exclusively at that store. You have to buy groceries either way, so why not save money while doing it?
If you’re a member of AAA, take advantage of the great discounts you can get at places you probably didn’t even know about. Other memberships like AARP offer such discounts, too.
Recycle as much as possible. Referring to his wife’s grandmother, Blair-Bennett says,
In the 1970’s, she taught me to save bread bags to put chicken bones in, save foil for another days use, save unused paper and plastic bags from the grocer to use as trash liners. She also saved string, pencils, ribbon, christmas boxes, paper, fabric scraps, etc., and she never threw anything away until she decided she couldn’t use it at least twice or more.
Now, I know this can be difficult if you have limited space. You don’t have to go overboard, though. Saving gift boxes, refilling water bottles, and choosing reusable over disposable whenever possible will save you!