If you’re like many people, you’re probably hoping to save some money this year. Maybe you’re hoping to finally go on holiday, you’re saving for a house, or you just want to have some money available for a rainy day. Regardless of your goals, saving money is about increasing your income and decreasing your expenses. Sounds simple right? But we all know how it feels to live month-to-month and have out of control finances.
Here are some smart ways to save money this year:
Lease a car
If your car is dying, and you’re pretty sure you’ll need a new one soon, you have two options- leasing or buying. Just like buying or renting a house, there are both advantages and disadvantages to leasing. When you lease, you’ll get a new car every couple of years, and don’t need to sell and buy cars. However, when you buy a car, you build equity each time you make a payment and eventually completely own the car.
If you’re hoping to save money, leasing is usually the best choice. This is because leasing will usually mean a lower monthly payment. It’s also important to note that if you’re a business owner and drive the car as part of your business, a portion of the financing and depreciation costs can then be deducted when it’s tax time. When you lease a car, you can also often afford a slightly nicer car than you would if you were buying it outright. You may even find that you can get a great deal leasing a Mercedes.
Cut up your credit cards
If you’re not completely paying off your credit cards each month, you’re doing it wrong. Credit cards can make sense for a variety of reasons- they give you a backup if you have an emergency, they can give you great deals on cashback and airpoints, and they can help you build up a credit rating.
But if you find that you’re only making the minimum payment each month and you’re not paying off the balance, something has to change. Credit cards have some of the highest interest rates around, and you’re often better off taking out a loan than relying on your cards.
See if you can consolidate your debt, and you’ll often find you’ll get an interest-free or super-low interest period which can help you pay it off faster.
Unfortunately, if you’re hoping to save some money you’ll need to slash those expenses. It doesn’t have to be an awful experience though. For one week, make a list of every dollar you spend. Next, look at where you’re spending a lot of money and rate those activities by how enjoyable you find them. You may find that you don’t particularly enjoy going out for dinner, but have no plans to give up your daily latte. Then you can cut the things you’ll miss the least, working your way up to the big stuff.