Money Saving Tips

How to Save Money

Following these tips will put some extra money in your wallet right away. Not sure what to do with the money you will be saving? How about investing for the long run? If you are 30 and start investing $100 a month at 10% interest rate – you will have roughly $380,000 when you reach 65. I will discuss the following areas where you can save money. Let’s talk about cable today and I will discuss Lunch in the next posting.

Cable TV
Lunch
Phone
Internet
Magazine Subscriptions


Cable TV

If you can cut cable TV, you will be able to save at least $480 annually. I am assuming you pay $40 per month for cable subscription and multiply $40 by 12 months, which will give you $480 savings annually. $40 per month is very low assumption. Most of the cable subscribers pay $50 to $80 per month. So based on what you are paying, your actual savings will be more than $480 a year. Living without cable is not utterly unthinkable. Many people are doing it and so can you. If watching TV is something you can’t live without, spend $40 on an indoor antenna and you will still have channels like CBC, CTV, Global and PBS.

If you are doing lunch outside everyday, you are pouring money down the drain. Let's take a look at the cost of doing lunch outside (instead of packing lunch from home) daily. Work-day lunch usually costs from $8 to $12. Let’s assume your daily lunch costs you $10. I am using $10 to make our examples simple. If you eat out everyday, your cost would be as below:

Weekly Cost = $10 * 5 = $50

Monthly Cost = $50 * 4 = $200

Yearly Cost = $200 * 12 = $2,400

$2,400 annually is a lot of money. If you are in a 42 per cent tax bracket, you keep 58% of each additional dollar you earn. When you consider all the taxes and costs associated with earning that after-tax $2,400, saving $2,400 annually means actually saving of $4,000 in pre-tax savings. Let’s put it another way – if you can brown bag your lunch, think of it as you are giving yourself $4,000 raise annually.

Above example looks good but it may not be possible for you to cut eating out everyday. What you do in that case? Cut above number in half. It means instead of eating out 20 days a month, brown bag your lunch for 10 days and eat out the remaining 10 days. You still will be saving half of the amount you were spending before.

Save Money On Phone Bill

Depending on what type of plan you have, you can save money on your phone bill. Here is how to slash your home and cell phone bill.

Home Phone

If you have home phone with features you don’t use, it’s time to get back to basic service. You will be able to cut $10 to $20 dollars per month. Keep your eyes open for same type of service offered by other phone companies at a lower cost. Before you do the switch, call your existing phone company and chances are high that your existing phone company will match other companies’ offer to keep you.

Cell Phone

If you have a monthly plan, added features such as caller ID, voice mail, call forwarding etc can cost you extra bucks. If you don’t use your cell phone in the daytime, switch to Pay As You Go. I have unlimited evening and weekend Pay As You Go which costs me only $30 a month. If you don’t need unlimited evening and weekend plan, use Pay As You Go $20 a month plan. It costs only 1 cent per minute in the evening and weekend and will save you a lot of money. Pay As You Go already includes caller ID, voice mail etc and you don’t pay extra.

Internet Phone

If you have high speed internet, you can use it to have home phone service. This type of phone called VOIP (voice over internet protocol). Plans start at $10 per month  for basic service. You can have phone service with 10 to 15 features for a fraction of land line cost. You can save 35% to 60% on your phone bill with VOIP. Before you jump into VOIP, do you research first. VOIP has some disadvantages as well. One of them worth mentioning - it won’t work in the event of a power failure.

Save Money On Internet Subscription

The easiest way to save money on your internet service would be degrade your service to a lighter version. Most likely you will not even notice the lower speed and you will get used to it within a couple of days. How much you can save doing this? Let me give you an example.

Rogers EXTREME : Approximately $55 Monthly
Rogers Lite: Approximately $35 Monthly

As you can see, it’s a $20 recurring savings right away. This will only work if you are able to switch to a lighter version. I understand that for some of you switching to a lighter version may not be an option. How do you save in that case? Yes, still there are ways. You have to do a little homework. Do a Google search by putting Canada Internet Service or Internet Provider Canada etc. Research search results on first couple of pages and pick a non-brand name internet provider at a lower cost. Yes, you will be spending a few hours doing your research but it’s worth spending a few hours to save money every month.You don’t need to stick to brand names like Rogers and Bell. You can switch to small internet providers and you can get the same speed at much lower prices. Let me give you an example. I performed a Google search by putting Canada Internet Service. I got about 298,000,000 matches for this search. I only checked first two matching websites, Acanac and Canadian ISP, as they looked promising. You can keep researching until you find something suitable.

Save Money On Magazine Subscriptions

Are you a magazine junkie? If you are, probably you are spending $30 to $50 on magazines every month. If you are buying magazines at newsstands, you can be spending even more. Stop buying magazines here and there. If you are subscribing to a few of them annually, take a good look at all of them and keep only one. You choose which one you want to keep. A smart way to read magazine instead of buying would be to read online. You will not find recent articles online buy if you wait a few days, it will be available for free.

This is my last post in Money Saving Tips series. After reading all tips, decide which ones you can do and start doing it. If you absolutely can not do some tips (let's say Tip 1 or Tip 3), that's OK. No worries. Just follow only those which you can. I will be writing about tips like these often. 

First Published: July 2007. ADawnJournal.com

 

Here Is An Example of Tax Refund Scam Text

Income Tax Return Scam

Hard-working Canadians are now rushing to file their tax returns. Also, scammers are working hard to scam more people and extract more money in unique ways. A common form of scam this time of year takes the form of a phone, text, or email scam asking people to pay owed taxes or collect a tax refund.

Today I have the opportunity to present a screenshot of a real scam text that was received via phone. Scammers send this type of text or email asking to collect or pay money to the CRA or tax agency. These texts or emails look so real that some people actually fall for it and lose money. Basically, if you follow the instructions on these texts or emails your banking information will be exposed to the con artists and they will be able to empty out your bank accounts.

Government tax agencies like CRA or others do not send texts, emails, or call asking for money. Their method of communication is postal mail or notifying your accountants (if you chose that option). The other ways you can check your tax balances is by logging onto the government tax website or calling the tax agencies directly.

Vigilance and common sense are your best defence. If you believe you have been a victim of a scam, contact your local police authority or central anti-fraud authority such as The Canadian Anti-Fraud Centre (CAFC).

How Long It Takes to Double Your Money?

Double Your Money

Have you ever looked at your savings account statements and wondered how long would it take to double your money at interest rates mentioned on those statements? By using a simple formula, you will be able to figure it out very fast.

This simple formula is called The Rule of 72. The rule works when your interest rate is compounded annually and you are not taking out any money or interests from your account. To find out how long it will take to double your money, take your interest rate and divide 72by your interest rate. Yes, 72is the magic number here. Let's say your high interest savings account is paying you 3% interest, divide 72 by 3 and it comes to 24 years. If you add more money every month to your capital, your money will double in lesser years. If you have a mutual fund which returns roughly 10% annually, your money will double in 7.2 years. Don't be discouraged by these long years. Investment is a discipline and you should not expect miracles to happen overnight.

First Published: Apr 17, 2007 ADawnJournal.com