10 July 2006

The Best Way to Save More Money

This is going to sound simple...too simple, but it is true. The easiest way to save more money is to make more money. I am serious. I thought about this long and hard. I have cut most of the expenses I am reasonably willing to cut from my budget and still maintain a lifestyle that will not drive me insane. My small amount of credit card debt is all at 0%, and will be paid off within the next two months. Even if I were willing to give up my cable television (and I am not), it is built into my monthly condo association dues. I think I am about to cut out my blockbuster.com subscription, as I am just not using it nearly enough. That's less than $20/month, though, so we are not talking about huge dollars. Could I eat out less? Sure, but as a single guy, who is not a huge fan of cleaning, dining out carries a multitude of benefits, not the least of which is that it keeps my kitchen and refrigerator relatively clean, which I think is a health benefit! Seriously, I am making an effort to eat at home more frequently...and, dare I suggest, carry my lunch to work???

On top of that, I don't spend a lot more than I have to on gasoline (I live less than 5 miles from work), home cooling (thermo set to 78 in the summer, and off when I am not home), phone ($40 monthly cell plan), and incidentals (I only buy clothes and most other necessities when they are on sale, etc.). Still, I feel like I need to make more a serious dent in my outstanding student loans (paid down below $19k, finally!) and increase my savings - both retirement and current/short-term. It's not hard to see that I do not have much of an outflow problem, but I have a distinct income problem. What to do???

Get a second job (sort of). I have friends who own a talent agency, and I am able to do some contract work for them seasonally. Fortunately, that season is coming up! This type of second job really works for me. My career job is not conducive to a regular, post 5 pm, waiting tables kind of second job, as I am required to travel frequently for work. This work, however, is able to be done in the course of a few days in the winter and a few days in the summer, and pays extremely well. I haven't done the math, but I am pretty sure that the money I make would be more than I would if I worked 10 hours a week all year at some minimum wage job. Next month, I will likely take in around $2,500 from this extra work. This is found money, as far as I am concerned, and my current plan is to send $2,000 off to the student loan and add the rest to my savings. My advice: If you feel like you need more money, get a second job. Obviously, my situation is ideal for me, but get ANY second job. Take the money that you make and use at least 80% of it to pay down your debt or increase your savings (you said you NEEDED the money, right?). Use the remainder to do something fun for yourself. Human nature dictates that if you don't see some kind of immediate benefit, you will start to resent the second job, and it may even effect your performance at your first job.

Assess the interest rate on your savings. Compared to a year ago, I am making a lot more money with the money I have than I was before. Did that make sense? A year ago, I had my emergency savings fund sitting in my Wachovia savings account, earning a whopping 0.10% interest. I was able to earn a grand total of around 38 cents per month on my savings. Last December, I opened a savings account with ING Direct, mostly because of the $25 account opening bonus that they offered. In addition, their interest rate is quite attractive, currently at 4.35%. Yes, I know that there are banks that offer a slightly higher rate, but all of my research says that ING has the best customer service and an easy to use web interface. Besides, compared to what I was earning, the rate I currently get is HUGE! What was 38 cents a month last year is now almost $20/mo. I know that I mentioned a few paragraphs ago that $20 wasn't all that significant, but it is better than nothing. My advice: If you haven't already, open an account with ING Direct. They still offer a $25 sign-up bonus, if you are referred by a current member. Email me, and I will be happy to send you a referral. It is a win-win for both of us. You get a $25 bonus if you open an account and fund it with $250 or more, and I get $10 for referring you. I just did this with a friend last week, and both of our bonuses posted promptly. Even if you don't choose to keep the money there for any long period of time, earning 10% on your money instantly is a very nice rate of return.

Increase peripheral income. I think that this could be the hardest thing on my list. I have a few ads set up on this web page, but even if I encouraged everyone I know to buy their textbooks through my Amazon link, I don't think that I would generate enough money to buy an extra ice cream cone every month! Still, if you blog, you should have an account set up with Amazon, as well as Google AdSense. Also, make sure that you are getting a rebate on all of your online purchases. I mentioned previously about Ebates, and there are other sites that offer similar deals, as well. Many online purchases with major retailers qualify for cash back from somewhere. One thing I would like to commit to do more is sell some things on eBay. Everyone has clutter around their house that just isn't used. Do you need your "stuff" or do you need cash? I need to get off my behind and determine what I have that I can move out. The benefit is two-fold -- increase cash flow, and reduce the amount of junk in the house. My advice: Take inventory of the things you can sell around your place. Try to make a manageable schedule to prepare, post, and package eBay items. You don't have to make a lot of money here - think of it is a yard sale. If you clear a few bucks and clean out the house, you are ahead in two areas. Don't worry about what you paid for something or the perceived worth. It is worth whatever someone else is willing to pay for it.

See, it's just that easy. Make more money. Why didn't I think of that.

Oh yeah...I did.

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