At the end of every month, I am always broke. Sometimes, before payday I can barely spend any money at all or I'll go right into the red. Right now I don't have any credit card debt, and I'd like to keep it that way.
I make an OK salary; it's enough to cover my rent, food and bills with a little bit left over but I can never manage to save anything for the following month. Can you offer me any advice on how to be more financially savvy? Cash Poor Cassie
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Dear Cash Poor Cassie
Saving money isn't easy, but there are ways; some harder than others. Sometimes you don't even realize that all of the little things you are spending your money on can add up to be hefty bills at the end of the month, not to mention the year. Hopefully I can lend some perspective. Here are five helpful money saving hints for you:
- Save Your Pennies Being penny wise will add up by year's end. Start off small and take your change from the end of each day and stick it into a piggy bank. At the end of the year, I'll bet you'll be pleasantly surprised how much you've saved. Also, try and cut back on little things that you buy each day while you are out that you can take from home or buy at the supermarket for a cheaper price. Don't buy sodas, or snacks. You can pack a snack or buy a six pack of soda and bring it with you for about 1/3rd of the cost. You'll be surprised how quickly the dollars add up.
- Check Your Habits Do you smoke? Cigarettes can cost up to $5 a day. That's about $1,800 a year. How about designer coffee? A mocha latte can cost you another $5 a day. Do you get expensive haircuts? Do you indulge in your favorite pasttime such as shopping for clothes and beauty products too often? How about magazines? Ordering subsciptions can save you tremendous amounts off of the cover price than if you bought them at the store each month.
- Pay With Cash Whenever Possible It's the old philosophy, "If you don't got it, don't spend it." This means, that if the money can't be taken from your checking account then don't charge it. You could wind up in debt and only having to pay large interest fees on that debt. So, whenever possible, pay with cash. Keep one credit card so you can create a credit line for yourself and so that you have something to use in case of an emergency. For everything else, use your Benjamins.
- Create A Savings Account Invest in a low risk mutual fund, a CD (certificate of deposit) or a money market. These earn you a little bit of interest, and if need be, you can access them.
- Tie The Knot! Of course I mean this only if you are deeply in love and feel ready to commit. Getting married can save you tons of dough on taxes and insurance. Besides that, studies show that married couples have higher median incomes than singles (the nest, fall 2006).