Do you think that saving is always associated with making a sacrifice? Saving money is not always as difficult as you think it to be. Every time you don't have to sacrifice on anything in order to save money. There are easy, painless ways which you can follow to save substantial amount in the long run. Going through this article will make you aware of 6 easy and effective ways to save money.
1. Replace your existing bulbs with energy-saving bulbs
One of the best ways to reduce the cost of your utility bills is to replace your existing light bulbs with florescent bulbs, which is more energy saving. By doing so, you'll be surprised to see how much money you can save in the long run. The florescent bulbs can save about 75% less energy than that of a normal bulb. It is cost-effective in other way too. The florescent bulbs usually last about 10 times longer than a traditional bulb. It goes without saying that you should switch off your lights when you leave a room so as to save electricity and in turn, reduce the amount on your utility bill.
2. Reexamine your auto insurance before renewing it
Before renewing your auto insurance policy, reexamine it and check whether or not you require collision coverage. You can do away with this coverage if your vehicle is old. If you have collision coverage, then the insurance company will pay for the damage to your car in case of an accident. However, if your car is old, you can consider dropping this coverage since your car depreciates in value over time and the amount of premium you've to pay for the coverage may not be worth it.
For example, suppose you've to pay $500 annually for buying collision coverage of your car, which is worth of $3500. Then when you make a total loss claim, you've to pay a deductible (suppose it is $1200) and the insurer pays the remaining amount, which is $$2300. So, do you think it is worth paying $500 annually?
3. Shop online to save money
There are many retailers who offer discounts only on the items which are purchased online. The companies, which sell products and/or services online, may offer discounts, coupons and promo codes only if you shop online. So, always check out online offers before purchasing an item, especially if you're planning a relatively big purchase.
4. Create a virtual piggy bank account
Some banks offer its customers the opportunity to create a virtual piggy bank. Such an account will help you save money especially if you have the habit of using plastic money for nearly each and every purchase. What happens is, when you swipe your check card for purchasing an item, the bank rounds up the cost of the item to the nearest dollar amount and the difference in balance gets deposited into your savings account.
For example, if you use your check card to purchase an item worth $9.50, then $10.00 is charged to your checking account. The difference amount (50 cents) is transferred to your savings account. Moreover, the banks may also match your virtual change deposit amount for some initial months and then offer a certain percent interest on the deposited amount.
5. Try to improve your credit score
You must be knowing that a good score will help you obtain a loan with suitable terms and conditions. So, try to increase you credit score in order to save money on the interest payments when you take out a car loan or a mortgage. This is because, when you apply for a loan, your creditors/lenders check your creditworthiness to decide the interest rate. A good score will help you obtain a loan at a favorable rate of interest. Do you know that a good score will also help you save on the premium cost of an insurance policy?
6. Take out a cash-back credit card
If your credit score is good, then you can obtain a cash-back credit card which will give you about 5% cash back on your purchase. After getting such a card, you can use it for paying bills as well as swiping it for everyday expenses. It will help you save a considerable amount, which you can deposit into your emergency fund. However, while using a cash-back card, make sure you don't swipe the card for purchasing items you don't require.
In addition to above, you can donate to a charity. Apart from helping a person in need, you can also get tax deduction when you donate to a charity. So, every year, clean your home and donate your unused items (such as, unused clothes, old toys, etc.) to a charity. However, make sure you donate to a legitimate organization and get a receipt so as to get tax deduction as well as to ensure that your items are used for a good cause.