Keene Young Professionals Network

Whether it’s a recession or not, the economy is a troubled state right now, and you don’t have to watch the news to know that less money is making it to your wallet at the end of the month. Gas prices are rising, which is pushing up the costs of virtually all of our goods and services. Families are worrying about how they are going to pay for fuel oil this winter. We’re all feeling it. While I can’t give you the magic answer to solve all of your money problems, I can give you some tips on how to save.

1. Spend less than you earn: I’m sure this isn’t the first time you’ve heard this phrase, but it’s the number one rule to any personal finance class. Basically, if you can’t pay for something in cash, take a step back and evaluate if it is a “want” or a “need.” If it is truly a “need” try to save up over time before making the purchase, if time is the limiting factor, and there are no other alternatives, then use credit - but use credit wisely. Remember, you’re probably paying around 12% APR on credit card purchases, if not higher. Check out http://www.bankrate.com for more information on interest rates.

2. Budgets are ‘in’ this year: Everyone says you should create a budget, and you may have even tried it once or twice, the key is to create a budget that you can stick to. First step: get a calendar, use one on your computer or go buy one at staples if you prefer to see it on paper. Write down your paydays and your bill due dates. This way, every time you are paid you can tell – at a glance – how much is already devoted to bills. Whatever is left over is what you have to spend on gas, groceries, and other every day expenses.
TIP: Separate your fixed monthly expenses (i.e. Mortgage/Rent, Auto/Personal Loans, Insurance premiums, etc.) from your variable monthly expenses (i.e. gas, electricity, etc.) Divide your total monthly fixed expenses by 4 if you are paid weekly or by 2 if you are paid biweekly, and then set up a direct deposit to a separate account that you will use only for your fixed expenses. Out of sight – out of mind.

3. Track your expenses: How much money did you spend on coffee last week? I spent $16.20 at Starbucks last week (Those grande iced caramel macchiatos are going to be the death of me) I know this because I kept track of every penny. If you are computer savvy, try Quicken or Microsoft Money to help track your expenses, most banks offer online banking and you can download your transactions right to these programs. If you don’t want to spend the money on one of these programs, check out a free and secure alternative like http://www.mint.com.
Once you know where your money is actually going, you can take steps to cut back. I’m going to have to cutback on Starbucks, if I continue spending $16.20 per week I will end up spending $824.40 in 12 months time. If you are a smoker, take a look at how much you are spending on cigarettes, kicking the habit could not only save you money, it could save your life, whatever reason works best for you.

4. Stop paying service charges: When was the last time that you went to the ATM, and accepted that $2.00 service charge because it wasn’t your bank? Did you know that your bank probably charged you as well? If you pay a bill online, are you being charged for the service? Have you ever overdrawn your checking account? You probably paid around $25 to $35 for that. These fees can all be avoided if you pay closer attention, the fees rack up and they rack up fast. Do yourself a favor and drive the extra mile to your bank’s ATM, keep track of the charges and checks you still have outstanding, don’t pay unnecessary fees!

5. Go grocery shopping: Don’t order pizza or go out to eat just because “You can’t cook.” There are lots of meal ideas that require little to no effort and it’s much cheaper than tipping the delivery dude. If you clip coupons, make sure you are only buying items you would normally buy, don’t forget, coupons are an advertising tool, just because you can save $1.00 on Dawn dish soap doesn’t mean you can’t spend less on a generic soap that will work just as well. Buying in bulk can save you money, but again, only if you are purchasing items you would normally buy and in quantities that you can consume within a normal time period. Buying in bulk encourages greater consumption, so shopping at BJs may not be the best way to go. Make sure you sign up for the shopper programs at places like Shaw’s and Price Chopper, sometimes the price you see is only “with card” and if you don’t have a card, you don’t pay that price. Last tip on grocery shopping, make a list, and eat a Snickers before you go – never shop on an empty stomach.

6. Gas, gas, gas: Everyone keeps complaining about the prices of gas. We all need our cars to get to work, school, etc and that means we have to buy gas, but try not to waste it. Don’t take 3 trips into town when you can take 1, plan your trips and if your forget something think about going tomorrow on your way by instead of right now. When you do have to fill ‘er up, Map Quest has a tool to find the lowest prices http://gasprices.mapquest.com just don’t rely on them for directions… trust me.
This winter, conserve your heating fuel by turning your thermostat down when you leave for work, or before bed. Make it even easier by replacing your old dial thermostat with an electronic one, some even have programmable schedules so you can set it and be done with it. Does your home really need to be 75 degrees when no one is in it? Or when you’re all tucked under your covers?

7. Credit cards: Stop using them, no really, stop, I’m begging you! They are great to have in case an unexpected emergency arises, but they should only be used for necessities. If you currently have a balance on your credit card, or credit cards, focus on paying them down, even when money is tight at least make the minimum payment to avoid late charges and damage to your credit record. Be strategic with your repayment method, if you have one card at 8% and another at 19%, pay more towards the 19% balance, it’s important to pay them down as quickly as possible, but be smart and limit the amount of interest you pay.

8. Veggin’ out on the couch: How much of your cable or satellite package are you paying for, but not using? Why did you buy that super fast internet connection if you’re not going to use it? If you are using it, that’s fine, saving money doesn’t mean you have to be miserable, and if you can’t miss an episode of House then by all means, keep it. But look into dropping that HBO package if you’re not going to use it. Are you paying for a land line when you mostly use your cell phone? If you absolutely need a land line, look into switching to cable phones, they’re all the rage, and no long distance charges.

9. Are you still renting? It’s a buyers market for sure, and the leaves are turning so if you want to buy a house, you better get crackin! If you can afford to buy a home, it may cost less than your rent payment, plus you’ll build equity where as renting essentially flushes that money down the drain. If you don’t know where to start, call a local bank or realtor and ask about home buyer’s seminars and get educated! Renting is not a bad thing either, especially if you are not sure about living here for the next 5-7 years, but if you can find a cheaper apartment that still fits your needs, you should consider relocating. Just remember, moving costs money, make sure you plan for first and last month’s rent on the new place, and make sure you aren’t breaking lease on your current apartment as that could end up costing you a lot more.

10. Consolidate: If you’ve owned your own home for a while, you may have some equity that you can tap into to pay down bills. Home equity rates are always going to be lower than personal loans. Even if you don’t own a home, you may have some money saving opportunities available to you - give your local bank a call for more information.

Number Ten and a half: Take a deep cleansing breath. Not everyone is good with math, and many people don’t understand money. That’s okay! Google “budgeting” or “money saving tips” or “personal finance” and you will find a wealth of tools available. Just make sure you are dealing with a reputable and secure site before submitting any personal information. Just know that if you need help, your bank has people there to help. Call your local banker with questions; I may be reached as well:

Bryan Cole
Personal Banker
Connecticut River Bank, NA
bcole@crbna.com
Phone: 603-357-1619