Zorce8: 10 ways to save money

NarendZORCE · Posted: Wed Jan 10, 2007 2:01 am Post subject: Zorce8: 10 ways to save money

Financial ZORCEology: 10 ways to save money
by Gail S. Ragoo

Most families are looking for ways to save money, and financial consultants by the hundreds feel that they have the money-saving answers. These include everything from home mortgages, home equity loans, and low-interest charge cards to no down payment investment property and borrowing against retirement funds.

In evaluating the numerous suggestions and money saving options, the following are ten ways to save money.

1. START SMALL
Most financial experts believe that we should save at least five to ten percent of our income and place it into an interest bearing, liquid savings account. Don�t give up though, if you are unable to put aside five or ten percent. Establish a saving habit even if it�s a few dollars a week, and save consistently. Even $10.00 a week will eventually add up. Once saving becomes a habit, set your savings goal of at least three to six months income.

2. PUT MONEY INTO A RETIREMENT ACCOUNT
If it is available sign up with your workplace retirement plan in which your company will contribute matching funds to the plan in your name. Individual annuity plans are also available from your insurance broker. These plans earn interest on the money invested in the plan. Annuity Plans also offer a tax break for income tax purposes.

3. MONITOR ATM WITHDRAWALS
Decide how much money you will take out each week and make it last. Discipline yourself to stick to your decision. Try to decrease the amount withdrawn every month. Have a separate account for savings that you only withdraw from in case of emergency. Put any left over money into this savings account.

4. PAY OFF CREDIT CARDS AND LOANS
Anyone can pay off his or her credit cards and loans to stay out of debt once they have the desire, discipline and time. Develop a realistic balanced budget that will allow every creditor to receive as much as possible in order to pay off the loan in the shortest possible time. Cut up all credit cards since they have the highest interest rate. Begin by paying off the loans with the highest interest rates first. If interest rates are comparable on all the debts, start by paying off the smallest balance first. After the smallest one is paid, apply the regular payment as well as the extra money that was going to it towards the next highest balance. After the second has been paid off apply what was being paid to the first and second to the next third highest and so on.

5. PAY EXTRA ON YOUR HOME MORTGAGE
Mortgages are usually taken for a long period and as such even the low interest mortgages generate a large amount of interest over the years. Paying extra monthly on your home reduces the length of the loan, reduces the interest paid over the term and adds equity to your home. Mortgage interest is also tax deductible for 2005 and should be included when filing income taxes.

6. PAY OFF CAR LOANS
Interest on car loans are not tax deductible and the rates are generally higher than mortgage loans. Pay it off as soon as possible by rounding up your monthly payments to the nearest hundred. Look for a facility that generates interest on a reducing balance such as Credit Union loans to avoid interest and any penalties if the loan is paid off sooner.

7. EVALUATE LIFE INSURANCE
Ensure that your life insurance offers you the best savings plan. Insurance Companies revise their products ever so often and most life insurance policies also allow a savings plan. Ensure that the policy purchased allows you to withdraw your investment at a future date if necessary.

8. INVEST IN A LONG TERM FUND
Funds such as mutual funds and other long term funds can earn high interest rates and multiply your savings. Look for funds that are safe and invest in companies that are sound and have a good track record. Keep a close eye on where these companies invest their funds. A standing order can be set up from your account to pay into this fund on a monthly basis. In this way the funds do not become part of your funds used for the month.

9. TAKE ADVANTAGE OF TAX INCENTIVES
Tax incentives are one way in which you can have more use of your money by cutting on the amount of taxes paid. The Board of Inland Revenue have a revised listing yearly of all the incentives offered. Look closely at these incentives and see how best you can utilize them. For 2005, saving up to ten thousands dollars a year in a Credit Union is one easy way to increase you allowance and pay less tax.

10. BE ACCOUNTABLE FOR YOUR MONEY
Establish a budget to know where your money will be going. If expenses are not budgeted then the money should not be spent. Keep a small notebook to record all miscellaneous expenses and to keep track of how your money was spent. Cut expenses monthly where you can.

Remember, the way you spend your money is in your control.
Do not spend money in unnecessary, unplanned areas.
Instead, start saving today!

�Zorce Publications Ltd.
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