Simple Ways to Save Big

Saving money can seem difficult and overwhelming, but it can be done if you focus on the areas where you spend the most money.

SavingĀ doesn’t just refer to spending less money; it also focuses on not spending money at all. It involves thinking about the big picture. We suggest that you ask yourself these questions to help visualize the big picture:

  • Is a particular product or service worth what it is going to cost?
  • Is the benefit going to be long term?
  • Do you have to have it now?
  • What is the total cost?

Take a look at the examples below:

  • Home purchase
    A mortgage company offers you a rate of 12% to purchase a home–basically the same interest rate that as a typical credit card. At that rate, you would repay over $500,000 during a 30-year loan financing just $200,000, doubling the cost of your home. In this case you may want to consider renting instead of buying because the interest cost is excessive. Once the rates go back down or you have had a chance to repair credit issues and/or increase your down payment, revisit the idea of purchasing a home and making such a large investment.

    A mortgage company offers you a rate of 12% to purchase a home–basically the same interest rate that as a typical credit card. At that rate, you would repay over $500,000 during a 30-year loan financing just $200,000, doubling the cost of your home. In this case you may want to consider renting instead of buying because the interest cost is excessive. Once the rates go back down or you have had a chance to repair credit issues and/or increase your down payment, revisit the idea of purchasing a home and making such a large investment.

  • Automobile
    When considering a car purchase, focus on the total cost of the vehicle instead of miles per gallon. How many miles per gallon you drive is important, but also think about the total cost. Some people purchase a hybrid because the gas mileage is so impressive, but when the car costs $6,000 more than a comparable gas-powered vehicle, it can take over five years to recoup the costs and may not be worth it. In addition, if you are one who keeps cars for a long time, you may have to purchase an expensive battery to power the car. Depending on the type of vehicle that you decide to purchase, you could incur higher insurance costs, increased monthly payments and more costly maintenance.
  • Home Appliances/Electronics
    Before purchasing a big ticket item, thoroughly research the product reviews. Large sites like Amazon feature actual user reviews which are often the most telling. But consumer magazines and web sites also often feature reviews by category specialists. Try not to rely on product descriptions on the manufacturer’s site. Shop for a product that has the features you want at the best value. Check out reports on the durability of the product, and even check the resale price to see how well the value holds up. Make sure, too, to comparison shop.

Saving money can sometimes seem impossible, but remember if you make wise decisions when making large purchases, you could save money in a big way!

Clearpoint has been helping consumers with their personal finance goals and debt repayment strategies since 1964. Today, we work with consumers all over the country through counseling that is administered online, in person or over the phone. Learn about our services today!

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