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
