Some tips on stretching your paycheck

By: CANDACE BAHR - For the North County Times | Thursday, March 24, 2005 12:05 AM PST ∞

Cutting expenses takes some ingenuity and bargain-hunting acumen. But don't confuse bargain hunting with saving money. If you buy something on sale you didn't need or budget for, no matter how good the deal, you've just spent money you didn't have.

The following strategies can help you trim costs across several categories and keep your savings on track. Remember, the trick is to put the money back into your savings program, not into your pocket for your next purchase!Ý

  • Get your cash at the grocery store rather than an ATM. Automatic teller machines (ATM's) are a great convenience, but if you're being charged a fee to use them, the costs can add up. As a courtesy, most grocery stores will allow you to take up to $100 in cash per day from your checking account when you make a purchase. Annual savings: $30+ (assuming a fee of $1.50 x 26 transactions).

  • Ask for better credit card rates. Competition is so fierce you may be able to get a lower rate just by asking. Some companies are willing to lower their rates because it costs more to find a new customer that to keep a current one, even after the discount. If your card company won't budge, you might want to roll over your credit card balance to another card with a lower rate. A good place to research your alternatives is www.bankrate.com. Annual savings: $50+ (depending on use).

  • Pay off credit card debt. By setting a goal and sticking to it, you can pay off your credit cards and pocket the annual fees or interest charges. There's a free 21-Day Debt Makeover you can use at www.moneyclubs.com to help you get started. Annual savings: $75+ (depending on use).

  • Add a dollar a month to your mortgage payment. You can make painless prepayments on your mortgage and dramatically shorten the time is takes to pay it off just by adding an extra dollar a month each month. Add one dollar to the first month's mortgage payment, add another dollar the next month, and then another dollar after that. At the end of the first year your payment will have increased only $12 per month., $24 per month at the end of the second year, and so forth. Depending on the size of the mortgage, you can pay back your 30 year mortgage in 20-25 years saving thousands of dollars in interest.

    Follow these steps and you can stop giving away your money, and start saving it.

    Candace Bahr is a nationally known author and financial adviser in Carlsbad. She is co-founder of the nonprofit www.wife.org. She can be reach at (760) 431-9288.

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