10 Tips For Saving Money In A Recession
Preparing for a recession, and surviving a recession for that matter, is all about doing more with less. During good economic times we tend to not look at our personal finances as closely as maybe we should. During good economic times we tend to over look the little increases in our fixed expenses. But, during bad economic times like recessions we also tend to look over some pretty obvious candidates for cost cutting. Or for that matter, we tend to over look places where we can save money. The following are 10 recession tips that I may help you to come up with some other ideas for saving money with banking and other personal finances.
Recession Tips For Saving Money Banking
Recession Tip 1: Deposit your money you want to save in a savings account at a bank that offers higher than normal interest rates. Most of the time banks that offer the highest interest rates, are banks that are based primarily on the internet. Because they are primarily located on the internet they they don’t have brick and mortar offices and so they have lower expenses. Many people have shied away from internet banks. People are just used to being able to walk into a bank office. It makes them feel a bit more secure. Times are changing and more and more people are getting used to the idea of having both their savings and checking accounts with Internet banks. These banks are really no different than any other bank. As long as the internet bank you choose for your savings account is insured by the Federal Deposit Insurance Corporation (FDIC) then you money is safe. That is your savings and checking accounts are safe up to $250,000.
Recession Tip 2: Some banks make huge profits on the fees they charge. The banking business is getting more and more competitive. If your bank charges you fees dispute them or ask them to refund your money. You should not have to pay fees to whether on your savings account or on your checking account. There is simply too much competition out there for your banking business for you to ever pay fees.
Recession Tip 3: Almost all banks have online bill pay. If your bank doesn’t then it may be a good time to think about transferring your savings account and your checking account to a bank that does. Online bill pay is great for a few reasons. First with online bill pay you can schedule your payments. If you are like me and wait to the very last minute to write the check and mail it, having scheduled online bill pay could save you a lot of money in late fees. Online bill bay, especially if you schedule the payments, can save you a ton of time. Time is money. So the more time you save the more money you save.
Recession Tip 4: Save money by tracking your expenses. Once you know exactly where you spend your money it won’t be difficult to where you can cut your expenses to save money. Most banks today allow internet access to track the activity on both your savings and checking accounts. Take advantage of this fantastic accounting function. Use the debit card that your bank gives you to track every single purchase that you make. At the end of the month down load a transaction file and upload it to a personal accounting software like Quicken. ( Note: I highly recommend using Quicken. They are the market leader, and have been for a long time, in personal accounting software. I don’t know of any bank that does not allow you to down load your debit card transactions in a format that is ready for Quicken. Besides Quicken’s strong bank affiliatations it produces fantastic reposrts that will help you create a realistic budget. It also has functions that allow you to create estimates by increasing or reducing expenses or increasing your income).
Recession Tip 5: Save money by tracking your expenses by using a credit card. There are some credit card companies that are now allowing you to download detailed transaction reports in a format ready for most personal accounting software, like Quicken. Recently, the credit card company pushing this capability the most has been Discover. The only drawback to doing this is that you need to be disciplined enough to pay off your credit cards every month so that you don’t get stuck paying interest. And that brings me to Recession Tip 6.
Recession Tip 6: If you carry a monthly balance on your credit cards, I highly recommend that you don’t, you can save money by requesting a reduction in the interest rate you are being charged. For whatever reason some people are so scared of the credit card company that they don’t want to do this. Here is the reality, If you pay on time and are never late there is no reason you should be scared of asking your credit card company to lower your rate. If they refuse to lower your interest rate just stop using that card. On average Americans have four credit cards at any one time. Just use the credit card that agrees to lower your interest rate.
Recession Tip 7: Many people pay their credit cards late. You can save an average of $39.00 per credit card per month just by paying your credit card bill on time. For the average person that means you can save a lot of money every month just by paying your credit cards on time; about $156.oo per month. If you leverage Recession Tip 3 and you schedule a payment through your banks online bill pay service then you will never be late. Besides, a lot of people believe that credit card companies mark payments late when they really were not. Online bank payments are done via wire transfer. Once the credit card company receives the wire transfer there is no denying that it was paid on time.
Recession Tip 8: you can save money by being and staying organized. My life is hectic. And, if you are like me the bills are almost always the last thing on my mind. So I have designated one day a week to pay bills. I also have one place where all the bills are put as soon as they come in. If they are bills that are scheduled to be paid through online bill pay then I verify the balance at my banks website then file the bill as paid. If the bill is an irregular bill I either setup a payment through online bill pay or if I have the money I pay it right away. Because I go through this process once a week there are only about four or five bills that need to be done so it only takes about twenty minutes. Stay organized and you will save money on late fees and charges. Moreover, your life will be a lot less stressful. A lot less stressful because you won’t have that nagging thought in the back of your head that the “BILLS HAVE TO BE PAID.”
Recession Tip 9: You can save money by never using a debit card or credit card at an ATM to get cash. ATMs are probably one of the most evil inventions ever made. If you are in the habit of withdrawing money from an ATM get out of it. Not only do you waste a lot of money on ATM fees but it is hard to track exactly what you spent that money on.
Recession Tip 10: You can save money by paying yourself first. Yup, that’s right you can save money by paying yourself. You give yourself a weekly allowance to use for whatever you want. But once that money is gone, you don’t get any other money. I know this conflicts with Recession Tip 4 and Recession Tip 5 but the funds are tracked but as an allowance to you. Paying yourself an allowance to save money will at first be really hard to do. But, once you get used to it, you begin to be really frugal with how you spend your allowance. I know, this suggestion kind of eats into the ego a little bit; Back on an allowance. But, you will surprised how much money you can save by limiting your discretionary spending to a fixed amount.
Although a few of these recession tips are pretty obvious ways to save money. But, I hope there were a few tips for saving money that were new to you. Although, I did not mention it here, I really think that one of the most important tools you can use for saving money is to create a budget. Once you are able to track where you spend your money and understand where you can save money you can put together a realistic budget. You need a budget that you can follow. You can have the most well thought out recession survival plan but if you do not follow your budget you are sunk. It does not matter how well you prepare for a recession, if you can’t adhere to your budget then you are going to have problems surviving the recession if it comes knocking at your door. Use these recession tips to help you make intelligent decision about finding unique ways to save money.
