Budgeting 101:
Your Money Guide For Getting Through School
Ways to Save Money
Airline Fares
Include a Saturday night stay-over,
and you purchase your ticket in advance. You can reduce the price of a round-trip
airfare by as much as two-thirds. To make certain you have a bargain fare, even if
you use a travel agent, call all the airlines that fly where you want to go and
ask what the lowest fare to your destination is. Keep an eye out for fare wars
and be prepared to act quickly.
Car Rentals
Car rental rates can differ greatly;
shop around for the best basic rates and special offers. Check with your insurance
agent and credit card company in advance to see what kind of coverage you have.
This way you'll avoid paying for coverage you already have.
New Cars
You can save thousands of dollars
during a car's lifetime by choosing a model that couples a low purchase price with
low financing and insurance rates. Purchasing a car that has good gas mileage, low
maintenance, and repair costs can save you a great deal of money in the future. Find
new car guides that contain this information in your local library. Comparison
shopping for an automobile can save you hundreds of dollars. Call at least five dealers
for price quotes and let each know that you are calling others.
NOTE: Do not let dealers pull your credit report until you are satisfied with
the price offered. Too many inquires can look bad on your credit report.
Used Cars
Before buying a used car:
Compare the asking price with the blue book price.
Have a trusted mechanic check the car, particularly if the car is sold "as is."
Consider acquiring a used car from a person you know and trust. They will be more
inclined to charge a lower price and point out any problems with the car.
Leasing A Car
Consolidated recommends you use the
following as a rule of thumb when contemplating leasing a car:
Do not decide to lease a car just because the payments are lower than on a
conventional auto loan. Leasing a car can be very complex. Consider the price of
the car, your trade-in value, down payment, monthly payments, and miscellaneous
fees like, excess mileage, excess "wear and tear", and the cost of buying the car
at the end of the lease. Do not lease the same car for more than 4 years. At that
stage you are at the "break even point" and you need to decide to take one of the
following actions:
- Return the vehicle to its rightful owner (the lessor).
- Trade your leased vehicle in on a new one. If there is "equity" in the car
it should not cost anything to trade it in. This will typically not be the
case until you are near the end of your lease (in some cases, you may never
have equity).
- Purchase the vehicle outright from the lessor, usually for an amount equal
to the residual value stated in your lease agreement plus any additional
fees.
Auto Loans
If you have considerable savings
earning a low interest rate, consider making a large down payment or even paying
for the car in cash. This could save you several hundred or thousands of dollars
in finance charges.
Shop for the cheapest loan and you may also save hundreds of dollars in finance
charges. Contact several banks, your credit union, and the auto manufacturer's
own finance company.
Car Repairs
Each year Americans lose billions of
dollars on needless or inadequate car repairs. To save money on these repairs
you must investigate and find a skilled, honest mechanic. Before needing repairs,
look for a mechanic who is certified, well established, and has done good work for
someone you know - Good luck!
Auto Insurance
Call the state insurance department for
publications showing typical insurance prices charged by various companies. Find a
licensed, low-price insurer. Call four of the lowest-priced, licensed insurers and
compare what they would charge you for the same coverage.
Talk to your agent or insurer about raising your deductibles on collision and coverage
to at least $500, or if you have an older car, it might be wise to drop these coverages
altogether. Taking these steps can save you hundreds of dollars a year.
Checking
Save over $100 yearly in fees by choosing
a checking account with a minimum balance requirement that you can, and do, meet.
Banks frequently will drop or lower checking fees if paychecks are directly deposited
by your employer. In addition, direct deposit offers the extra advantage of convenience,
security, and immediate access to your money.
Savings and Investments
Before opening a savings or investment account
with a bank or other financial institution, find out if the account is insured by the federal
government. A number of assets offered, including mutual stock funds and annuities, are not
insured. Certificates of deposit (CDs), treasury bills or notes often earn the highest return
on savings with little or no risk. However, you do loose access to the money for a period of
time.
Credit Cards
You can save as much as several hundred
dollars each year by lowering credit card interest charges by paying in full your
entire bill each month. If you can not pay off a large balance, consider our Debt
Management Program or call 1-800-SAVE-ME-2. Consolidated may be able to consolidate
your debts, lower monthly payment commitments, and negotiate lower interest charges.
Generally, clients see 25-50% monthly savings on interest charges from our creditor
negotiations. You can lessen credit card fees by avoiding late payments, over-the-credit
limit fees, and by throwing out all but one or two credit cards that have no annual fee.
Electricity
Save hundreds of dollars a year on
electricity by making certain new appliances, especially air conditioners and
furnaces, are energy-efficient. Information on the energy efficiency of
major appliances is found on the Energy Guide Labels required by federal
law. Check if your electric utility station has programs to reduce the costs of
appliance purchases.
Heat & Air Conditioning
A home energy audit can identify
ways to save money on home heating and air conditioning. Ask your electric or
gas company if they do this audit for free or for a reasonable charge. If they
do not, ask them to refer you to a qualified professional.
Telephone Service
Check with your phone company to see
whether a flat rate or measured service plan will save you the most money. You can
save money by buying your phones instead of leasing them. Check your local phone
bill to see if you have optional services you don't really need or use. Each option
you drop could save you $40 or more each year.
Long Distance Telephone Service
Evenings or weekend long distance calls
can cost significantly less than weekday calls. If you make more than a few long
distance calls each month, consider signing up for a calling plan. Call several long
distance companies to see which one has the least expensive plan for the type of
calls you make. Whenever possible, dial your long distance calls directly. Using the
operator to complete a call can cost you an extra $1 to $3.
