Financial Tips From Consumer Reports

The August 2008 issue of Consumer Reports, a really helpful magazine that my dad has read all of his life, offers two articles that are very useful. The first offers tips for cutting expenses. The second gives a brief overview of budgeting.

The first article offers 6 ways for an average American to save money. These include..

1. Find cheaper auto insurance. By shopping around, the average person can save $65 per month.
2. Optimize your life insurance. Premiums have dropped in the past ten years, the article notes. It may be worth replacing an existing policy. Also, by adopting a healthier lifestyle, you can cut costs. Average savings? $110.
3. Shop smart for food. CR cites U.S. Department of Agriculture data indicating the average family of four can drop its grocery bill by nearly $200 per month though smarter shopping.
4. Stop paying bank fees. The average U.S. household pays more than $25 per month in bank fees. There’s no reason to do so.
   
5. Call up cell phone savings. According to the U.S. Bureau of Labor Statistics, the average family spends $90 on phone-related expenses. Consumer Reports suggests checking to be sure you’re not paying for too many minutes.
6. Pay off your credit card. If you can get out of debt, you’ll not only save on finance charges, but you’ll also free up the cash that was going to pay the principal. Estimated monthly savings: $65.

The second article includes information on how to create a spending plan. A summary of the information in the article is listed below.

• Set goals. I believe that the road to wealth is paved with goals. Consumer Reports believes that long-term goals help you achieve big things, while short-term goals keep you motivated.
• Track expenses. It doesn’t matter how you do it, but track your spending. You can use a notebook, computer software, or even online tools.
• Plan for surprises. If you haven’t already, start an emergency fund. Most experts advise saving three to six months of living expenses, but CR suggests a “personal escrow” approach instead.
• Set priorities. Know which bills get paid first. For most people, this means the big things like food and home. (If you pay yourself first, it may be your retirement.) Whatever’s left after your expenses is your discretionary money.

Finally, I noticed some really useful mobile banking at Wamu, my checking account. I could simply text a number and they will tell me account balances, nearest locations, and nearest free ATM's. I also set it up where they text me when I get my work salary each month and when my account goes under $500. This is getting pretty automatic. :)