Simple Strategies for Saving Money
A post from our Partners at the UF/IFAS Extension Office for Hernando County
Scott E. Taylor
Family and Consumer Science Agent
With all the challenges of today’s society, having some simple techniques to save money can be a lifesaver. Let’s look at some simple 1,2,3’s of smart money moves that can have some really big results.
First, let’s look at lottery tickets. The best advice is to just say no. Sure, dreaming about all the things you’ll do with that big jackpot is fun, but let’s take a look at the facts. Lottery’s run a profit. So that means someone has to run a loss. Who runs the loss you ask? It’s the players. Studies have shown that the people who won the lottery have ended up no happier than those who lost. And in many cases, winners have ended up in worse financial shape because they overextended their lifestyle based on a one-time income bump, rather than a long term income stream.
If you have an adequate amount in your emergency fund, usually 3 – 6 months of living expenses, you can leverage your emergency fund to reduce some expenses. For example, buying higher deductible home and car insurance, your monthly payment will be lower, and that extra money can go into retirement savings or other savings categories. While insurance is necessary, it is more expensive the lower the deductible you carry. You can use your emergency fund as your deductible if needed, have a higher deductible, and reduce your insurance bill.
Protect yourself by having disability insurance as well as term life insurance. Term life insurance is important for dual income families to cover not only the loss of income, but also dependents. Especially in case you get hit by a bus. Just saying…..
We have all heard the advice about living within our means, but that is not completely good advice to take. A simple strategy to save more money is to live slightly below your means. Never count on that next pay raise, promotion, or stock windfall. Avoid the hedonic treadmill. Studies have shown that as a person makes more money, their expectations and desires rise in tandem. But once the “newness” wears off, they are no more satisfied or happy than they were before. Instead of increasing your standard of spending, increase your standard of saving. Master the art of being satisfied.
Finally, stop carrying a balance on your credit cards from month to month. Even the best credit card interest rates are extremely high. Make paying off that debt a priority. A simple free program to help with that can be found by simply Googling the word "Powerpay."
These strategies are relatively painless to implement, and can provide tremendous results to help in today’s hectic world.