Monday, November 28, 2016

10 Ways to Save $50,000

When I saw that title on the cover of the March issue of Money Magazine I figured I had better read it. There were some good points and some that stretched the imagination. Also, there is difference between actual savings and not buying something you couldn’t afford in the first place. For example, if you have $20,000 in the bank to buy a car and you spend $15,000, you can use the saved money for something else. But if you buy a Chevy instead of a Mercedes, the $40,000 difference is not really “savings.”

First mentioned is refinancing a 30-year mortgage to a 15-year mortgage. Yes, this will save lots of interest expense over the years, but it will give you a higher monthly payment. Refinancing or paying down your mortgage is actually something most people should not do, but it depends on your individual circumstance. Whatever you do, do not pay for expensive software to help you pay down your mortgage; it can be done for free.

Next is moving to a place where living expenses are lower. Colorado Springs (where I live) is mentioned as a cheaper destination place. Relocating is an idea for some people to consider. Many people will be able to telecommute in the future meaning they could live anywhere. First, you need a job in the new area before you move, and you should visit the place in all seasons. Perhaps your company has offices throughout the U.S. or you could look to a foreign assignment. When I was with the State Department, they sent me to Africa and provided me with a huge house at minimal cost. I was able to save a lot. Be careful, however, I’d pass on Murmansk, Russia or Tripoli at the present time.

Saving thousands on investment fees is something as a Money Coach I often encourage. The article suggests do it yourself for things like taking care of the lawn and shoveling snow. But the 10-year savings of over $40,000 for these two areas seems excessive. Most of us take care of our yards ourselves. Energy upgrades, also mentioned, is a very good idea and cost effective.

Having your child obtain a scholarship is on everyone’s wish list, but I doubt it should be listed as a way to save $56,000. Also, going to community college for two years, then switching to an expensive private school saves money, but most people haven’t saved the full amount for a private school so there is no actual money to put to other use.

The remaining items concern spending less money on a variety of budget items. I certainly support this with the key word being “budget.” Everyone needs a budget with a large amount of savings. Some of the suggestions are not practical for most of us – like selling a car and taking public transportation. One interesting statistic is that impulse buying amounts to 30% of overall spending. Always shop with a list and don’t deviate from that list.

Bottom line is that everyone should read this article or other articles like it and choose one thing that can save them money, and then invest that money wisely for the future.


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