The Great Recession has destroyed millions of Americans’ livelihoods and their savings and retirement funds are shrinking at alarming rates. You can fight back and rebuild by saving and earning at the same time. Here are a few suggestions.
1. Before buying a new item, sell something that you don’t use anymore.
Look around your house or apartment. Do you really need that self-help book you already read or that DVD you haven’t watched in months? Our brains are wired to collect things and then apply emotional feelings toward them. This is a reason why most of us have developed a habit of collecting stuff that we don’t really need. It takes less than five minutes to post a used item on Amazon.com. I have made over $1000 a year selling used books and CDs/DVDS that I received from friends and family members for free. That’s 100% profit! I used that cash to pay for my monthly subway card.
2. Turn your change into cold-hard cash
Put all your change in a jar every night after you come home from work. And cash it in after a month. It may only be $20-30/month, but that could pay for three or four lunches. Coinstar charges you a fee, but the Penny Arcade at TD Bank is free. According to the June 23, 2005 article on CNNMoney.com, Edmond Knowles, an Alabama man cashed in 1.3 million pennies at a Coinstar for over $13,000 after collecting them for 38 years. If that was loose change (gold dollar coins, quarters, dimes, and pennies), that could be well over $30,000 added to your retirement fund.
3. Only go out one night a week and have a few drinks at home first.
Ten dollars saved is ten dollars earned. Overpriced drinks at trendy clubs and lounges can really put a dent in your budget. You can save up to $100 a month by having a few drinks at home with friends before hitting that Friday night hot spot. Of course, I’m not condoning drinking and driving. City folk have it easier with public transportation. Suburbanites can benefit from having a designated driver within the group.
4.Pay more than the minimum balance on your credit cards and make additional payments between billing cycles.
0% balance transfers can save you a lot of money in interest charges but after the introductory rate, your interest rate will most likely shoot up over 10%! It buys you time but within that time frame you should be paying off a higher interest card. Remember, credit card companies are not your friends. They are in business to make money off the working poor who rely on them to maintain their standard of living.
It is easy to rack up your balances and much harder to pay them down. Do not fall into their trap and let them take advantage of you. You only have to wait an average of three days between payments to make another one. An extra $10-$20 a month can save you thousands of dollars in interest charges over a three year period.
5.Move back home with Mom and Dad temporarily
This may not be a viable option for everybody (if your parents are struggling financially and/or you aren’t living/working in the same city as your family). It could also be a painful reminder that you are not completely independent, but it could also be very lucrative for your bottom line. If your parents live within driving distance of your job, think about how much you could save by living rent free for a few months to a year in addition to being fed some of mom’s home cooked meals.
If your rent was $700/month, you could save $8400 a year by moving back home. That’s not including the money you would save on utilities and meals. That’s almost a down payment for a house! I’d consider moving back home for two years and using the savings to buy a home instead of throwing my money away in rent. A disadvantage to this option is that if you are single, your dating and social life may suffer. That is a huge trade-off. However, it is nothing to feel ashamed of. This stubborn recession has bred stories of single people and married couples with children moving back home with their parents as well as elderly parents moving in with their kids.