Money-saving tips!

[Kelda]

I thought of another one today - which I never actually reall thourght of a rela money daver until now.

I hardley ever by a newspaper.

In my daily commute to work I pick a free metro on the way in and a free Daily Record PM on the way home. I then read the news on the internet at lunch.

Never buy a tv guide either - as its akll right there on my cable box.

So thats gotta save a few $$$ or £££ over the course of a year!

[Wishes]

Kelda, I think I do understand your explanation of the mortgage. I think mortgages can be made this way here also although that is not what I did. It's scary since buying property is the biggest investment people make and I find home ownership not that rewarding anyway.

The no newspaper and TV guide idea is a good one. I don't buy them either. I even stopped buying some of the decorating magazines I used to as I just found them piling up around the house and not really worth it.

[Kerry]

Tip #1

I realise it's not possible for everyone, but I can't recommend highly enough that one should endeavour to find employment where there is a good superannuation (retirement) plan.

I have been with my present employer for 27 years and for all of that time, I have contributed 9% of my salary to my retirement plan each week. My employer (the New South Wales government) matches my 9% with a further 6% of their own. This means that I have been saving the equivalent of 15% of my salary for the past 27 years.

It will give me a great deal of clout in the real estate market, when I retire next year. I will be able to purchase my retirement home for cash, with no mortgage necessary.

Tip #2

Four important tips re mortgages:

1. Save as much deposit as possible

2. Borrow as little as possible

3. Pay more quickly and more often than your bank recommends

4. Do without other things and give priority to paying off your mortgage first

Tip #3

Get yourself a credit card with an extended interest-free period on it. My credit card has a 50 day interest-free period, when one is not charged interest. I put absolutely all my purchases on my credit card (not little things) and then pay up the credit card in full on day 49, just before it's due. I do this by making an on-line transfer from my high interest paying account, where my salary and the bulk of my savings is deposited, and where it's been attracting lots of interest in my favour, prior to the monthly transfer.

Tip #4

I agree with David about small change. However, unlike David, I do not roll it up and take it to the bank on a regular basis. Rather, I prefer to use my small change for small purchases. I am not at all shy about handing over a fistfull of small change for minor purchases (up to a couple of dollars). I do this specifically in order not to break a note. I find that once one breaks a note, it is soon fritted away. So, keep your notes intact in your wallet, and use coin for small purchases.

Tip #5

Rent is dead money. You may as well flush it down the toilet! Do without in order to save a deposit on purchasing your own home.

Great idea for a thread! 

[Kelda]

Great ideas Kerry.

I'm normally pretty good with my money but this month I have decided to get smart.

I ahve a great penison with my work, so no worries there but I also increased my mortgage payments which should hopefully save me about £9000 over the course of the mortgage and have also started 2 savings accounts - once for holiday savings and one a general run of the mill savings account.

[Wishes]

Kerry, How wonderful that you will be able to purchase your retirement home for cash.

But I don't even want to get started on a retirement plan with my employer. A 401K retirement plan is offered but it would be all my own money. No matching from my employer so I do not do it.

I bought a house almost 6 years ago. While I do not really enjoy owning a house I know that the equity from this place will help with my retirement. House prices are falling here but I have never refinanced, so I'm not worried about it.

I have no debt except my mortgage (thank goodness!) I have found the house has taken money but it has also appreciated a great deal. I made no cosmetic improvements except the kitchen linoleum. (I could not live with the orange)

[Kerry]

Kerry, How wonderful that you will be able to purchase your retirement home for cash.

But I don't even want to get started on a retirement plan with my employer. A 401K retirement plan is offered but it would be all my own money. No matching from my employer so I do not do it.

I bought a house almost 6 years ago. While I do not really enjoy owning a house I know that the equity from this place will help with my retirement. House prices are falling here but I have never refinanced, so I'm not worried about it.

I have no debt except my mortgage (thank goodness!) I have found the house has taken money but it has also appreciated a great deal. I made no cosmetic improvements except the kitchen linoleum. (I could not live with the orange)

I have heard the argument in favour of paying rent, in preference to owning one's own home. I have experienced both renting and owning and I personally prefer the latter. After paying off my mortgage several years ago, I continued to save the same amount that was previously paying the mortgage, and I've created a very nice nest egg for my retirement by doing so (and continue to do). It's often not easy to save, but it is certainly always worthwhile! 

[Kelda]

My best advice for not spending money?    Don't go food shopping when you are hungry!     

Oh god, I'm terrible for doing that - as we tend to get out shopping right after work on a Friday, so it doesn't clutter up our weekend.

So my treats for the weekend are often eaten on a friday night -  I tend to buy the nice looking desserts that are in the discounted isle as they are about to go past their sell by date that I would never buy at full price (they're expensive enought when reduced!!)

But I do sometimes go a little mad when it comes to the food shopping cos its nearly teatime and I'm getting peckish!

[serious crayons]

If you have a savings account in a regular bank, move it to an online-only account. HSBC and ING are a couple that are considered pretty good, and they pay somewhere around 5 percent interest -- much higher than most regular banks' savings accounts.

I'm confused about how much you save by paying down a mortgage. On the one hand, yes, it's nice to minimize your house debt. On the other, you get a tax deduction on the interest and it's already much lower than credit-card interest. So I think it's best to pay your credit cards off first, anyway, as Laura said earlier.

A few years ago, I would have thought you'd be better off taking on a lot of house debt than investing in the stock market, because the returns on real estate were so much greater than they would be on other investments. For instance, we owned our last house for 10 years and sold it for more than twice as much as we'd bought it for. Nowadays, though, you can lose money you've invested in your house. We bought our current house about a year and a half ago and are now trying to sell it -- we probably won't even get back what we put into it. I keep telling myself that we aren't losing any more than we'd have paid in rent, plus we got that tax deduction ... but still, it's discouraging.

[Kelda]

maybe its the different scenario of UK v USA? Certainly the interest rates for mortgages is quite high currently.

Certainly - my credit cards are 0% interest - so the only loan causing me interst just now is my car loan (5 months to go) my student loan (very very low interest rate) and my mortgage - by reducing my term by 6 years (paying off 6 years early) I've estimated I will save £9k.

[Wishes]

A few years ago, I would have thought you'd be better off taking on a lot of house debt than investing in the stock market, because the returns on real estate were so much greater than they would be on other investments. For instance, we owned our last house for 10 years and sold it for more than twice as much as we'd bought it for. Nowadays, though, you can lose money you've invested in your house. We bought our current house about a year and a half ago and are now trying to sell it -- we probably won't even get back what we put into it. I keep telling myself that we aren't losing any more than we'd have paid in rent, plus we got that tax deduction ... but still, it's discouraging.

Oh I'm so sorry to hear this. I peeked and saw you are in Chicago. The housing market is slumping and I feel bad for those who bought at the height of the market and now are facing equity loss. I have much less sympathy for those who refinanced the heck out of their house and spent the money on unneeded things.

I bought this house just as the market was starting to climb and everything was sold sold sold. I started looking in a smaller town and ended up living where I really didn't want to. Now people who should have never been given a house loan are loosing thier houses. It's really a mess and it does make me mad that these loans were taken and given to persons who should have kept renting.