Cost Effective Living

Achieving financial peace and independence in life is hard, especially when you can barely afford the necessities. Life should be enjoyed, but it is hard to have a good time when you are funneling all of your money into your bills instead of your vacation fund.

Believe it or not, little changes made throughout the year is almost like giving yourself a raise. As a bonus, money saving habits can improve your health, not to mention your stress level.

With patience, planning and discipline you can add thousands of dollars to your year-end bottom line and your personal net worth.

Here are just a few ideas you can consider to save money:

TRANSPORTATION

Many families budget nearly $1000 per month for transportation costs, which may include several car payments, insurance, fuel and repairs.

Payments

  • Generally, buying a car less than two years old isabc kids unwise. Most cars depreciate so quickly that before you even park the car in your driveway for the first time, the loan is already upside down.
  • Discipline yourself to pay off one car loan before you finance a second vehicle.
  • Do not buy vehicles on impulse. Shop around, read consumer reports and choose a vehicle with a good resale value.
  • Do not buy more car than you need. It is not prudent to buy a $40,000 truck for two trips to Home Depot per year. To haul items, often you can rent a truck for less than $20 per hour.
  • Before financing a car, set aside the payment amount and increased insurance amount for several months. If you cannot do this, or you fall behind on other expenses, you are not ready to finance a car. If you can do this, and kept up with your regular expenses, use the saved amount as a down payment.
  • If you are uncomfortable taking your older car on long trips, rent instead of buying. If you were to buy a new car, at $250/month it totals $3000 per year just in payments. An older, paid off vehicle may require $1000 per year in repairs and renting a car for a weekend trip may cost around $100. Therefore, including two weekend trips per year and the repairs on your older vehicle, the cost is still $1800 less than the payments on a new vehicle.