We all know how to spend less by sacrificing. While sacrificing -- eating out less, buying fewer clothes and cutting back on vacations -- can be effective, it's painful. So if you are looking for ways to save, why not start with money-saving tips that are relatively pain-free?
With a little imagination, you'll find plenty of ways to reduce spending without making big changes to your lifestyle. And to get you started, here are eight painless ways to save money:
1. Get healthy. Anyone who has struggled to stay fit knows that eating healthful meals and staying in shape are easier said than done. But for those who are in good shape, you can save a lot of money on life insurance and individual health insurance plans. As an added bonus, you'll feel better and have more energy.
3. Improve your credit scores. Of all the painless ways to save money, improving your credit scores is arguably the most important. From home loans and car loans to credit cards and auto insurance, good credit scores can save you a small fortune. Over a lifetime, the savings can easily reach tens of thousands of dollars.
4. Invest on the cheap. Whether you are a passive investor who sticks with mutual funds or an active stock and options trader, there are easy ways to save money. For mutual fund investors, stick with funds that have low expense ratios. A good rule of thumb is to keep the weighted average expense ratio for all mutual funds under 50 basis points (0.5%).
As compared with funds that charge well more than 1% in fees annually, the savings over a lifetime of investing can be substantial. And for active traders, stick with discount brokers that charge $10 per trade or less.
5. Think triple play. For many people, their biggest monthly expenses include Internet service, cable TV and phones. The major providers offer discounts when you bundle these services. Called a triple play, this arrangement not only saves you money, but you also get the convenience of a single bill each month.
6. Go prepaid with your cell phone. Though this option isn't for everybody, many can save with prepaid cell phones. You can find prepaid phone plans that charge just 10 cents a minute. And because they are prepaid, you don't have to commit to long-term contracts. Two popular prepaid cell phone carriers are Net10 and Cricket.
7. Shop online. There are several benefits to shopping online, convenience being chief among them. But shopping online can also save big money. Many retailers offer special discounts to online shoppers. And virtually every company that sells products or services online offers promo codes, discounts or coupons. Particularly if you have a big purchase planned, make sure to search the Internet for deals before buying.
8. Get cash back. If you have good credit, there are a number of cash-back credit cards that pay up to 5% on purchases. The key is to use a card for monthly bills and everyday expenses, not to charge things you don't need. Put monthly bills that accept credit cards on automatic payment, and use the card for everyday purchases such as groceries and gas.
As an extra precaution against overspending, pay the credit card bill in full several times throughout the month. It's easy to do online, and it prevents any surprises at the end of the month.
Published Aug. 11, 2010
