Make 2015 the year to save and invest more money than you ever have. The trick is to stop wasting money on expenses you can control. Here are some money-saving tips for 2015 that can help pad your pocketbook.
1. Auto insurance
Television commercials ask you this question all of the time: Are you paying too much for your car insurance? Have you checked lately? The company you having been using for car insurance may not be charging you the lowest rate.
Auto insurance companies use different methods to calculate risk, and the methods sometimes change, so even though one company is lower than the competition one year, it won’t necessarily be the lowest in another year. Further, the methods they use not only include your driving record, but also your age, where you live, the distance you commute to work and other factors to calculate risk. Some companies may try to attract drivers with certain combinations of their favored factors by charging lower rates.
Also, take a look at your needs. Are you at a point in your career when you could afford a higher deductible if needed? If so, then switching to a policy with a higher deductible might be a good choice for you. Likewise, if you are driving an old clunker or simply a car that isn’t worth a lot of money and you’re paying for collision insurance, you’re probably wasting a lot of extra money on insurance.
If you’ve bought a home since you last purchased auto insurance, you may qualify for a discounted, bundled rate if the insurer offers homeowners insurance.
Call around, go online and compare coverages and rates based on your true needs, because it really is possible to save hundreds of dollars on automobile insurance.
2. IRA/401(k) contributions
A good place to put all of the money you save on car insurance is into your retirement savings plan. In fact, any increases to your IRA or 401(k) are going to help secure your future, and most people are not saving enough money for retirement.
An even better idea than just funneling a little bit of extra money into your retirement account is to make a goal to double, or even triple the amount you are putting in now, or at least to max out your contributions if you’re financially able to do so.
If you are concerned about seeing fewer dollars in your pay check, then make the increases gradually. An increase of 10 to 20 percent per month won’t be as noticeable as taking a large amount all at once. Don’t forget that the money you’ll pay in payroll taxes will go down a bit, so the offset will cushion the blow.
3. Close unused credit cards that carry a fee
If you are keeping accounts open for credit cards you don’t or only rarely use, you are probably wasting a lot of money on annual fees or other charges.
It is true that closing an account can have a negative effect on your credit rating, although if you have a lot of credit extended to you, closing a card you aren’t using may improve your score or overall rating over time. Banks count the total lines of credit you have been given as potential debt, even if you don’t owe anything.
However, if your credit rating does decline slightly, it will likely come back up in a matter of time if you keep up with good habits, like paying bills on time, and not applying for new lines of credit often. The short-term hit to your credit will only be a minor issue compared to the amount of money you might be able to save.
Do you feel like your utility bills are too high? There are a number of changes you might be able to make to save money on your utility bills each month, or at least during part of the year.
If you live in an area with a lot of seasonal variability, then you might benefit from taking some steps toward making your space more energy efficient. While some efficiency projects, like new, insulated windows, installing solar panels, or getting a new, highly efficient refrigerator, are expensive investments or impractical if you don’t own your home, some very simple techniques can help you lower your bills and have more money to save in 2015.
Drafty doors and windows can lead to costly energy bills whether you are heating or cooling, but getting a better seal on your windows and doors can be very inexpensive. Self-adhesive insulation strips are easy to install and inexpensive to buy. Your utility company may even offer a free home kit with items like insulation strips and other small items that can help make a difference.
Take a close look at your statements and billing history. If you are on a monthly payment schedule year round, designed to avoid big surprise bills when the weather changes, check to see the last time it’s been adjusted according to your actual use. If it’s been a while and your use has gone down and rates haven’t gone up, it might be time to ask for an adjustment to the plan and make sure actual readings are taken regularly to keep the amount on target.
It may not make a huge difference in each of your monthly bills, but over time, eliminating “vampire” energy drains can have a positive impact in the form of savings. (Vampire energy sinks are items that are plugged in, and in standby mode.) This is true of many televisions, but also laptops when not in use, electronics like a Blu-ray player and anything with a clock. In a nutshell, if it’s warm, it’s sucking energy. If you have a lot appliances and electronics like this, it can be helpful to plug them into a surge strip that you can shut off when they are not in use, overnight, or when you leave the house.
Depending on your income or where you live, you may also qualify for discounts to your utility bills.
5. Debt consolidation
If you haven’t consolidated your bigger debts, like student loans or high-interest loans, make 2015 the year to do it. Shop around for good rates, and consider trying out a bank you have been doing business with for a while, as you may get a better rate. You’ll have fewer bills to pay and will probably save money on interest over time.