Easy Ways to Save $5,000 a Year

Here are some ways to save big money from Suze Orman:

1. Save all your change.

2. Reduce Your Credit-Card Interest Rate.

3. Go for the Higher Insurance Deductible.

4. Stretch the Calendar.

5. Go Wireless.

6. Flex Your Benefits Muscle.

7. Potluck, Anyone?

8. It's Not What You Drink, But Who You Drink With.

9. Downgrade from Premium Gas.

10. Buy a Used Car, Rather than New.

11. Look the Gift Horse in the Mirror.

Then, Suze offers an idea on what to do with all your savings:

A smart move is to take $4,000 of these savings ($5,000 if you're over 50) and invest it in a Roth IRA, assuming you meet the eligibility requirements (modified adjusted gross income below $95,000 for single tax filers and less than $150,000 for married couples filing jointly).

And when you add it all up, these simple tips can really help you grow your net worth:

And if you follow the above tips each year, you can invest $4,000 annually. Over 30 years, at an average annual return of 8 percent, you will have saved $490,000. That's some serious savings -- without serious sacrifice.

My thoughts on the tips:

1. Not bad. My parents used to do this, then pay me with the change for odd chores around the house. I had more change in my room than most banks have in their vaults. ;-)

2. How about "get out of debt and only charge what you can pay off totally" as a tip? I like it better.

3. Yep. I have the highest possible deductibles on my car and house. Be sure you increase your emergency fund to allow you to pay these higher amounts if you need to. I recommend Emigrant Direct as the place to store your emergency cash.

4. Better yet, cut your own hair and save even more. And learn to give massages and pedicures too. Sheeesh! We're trying to grow net worth, not waste money here!

5. I haven't made this plunge yet. My cell phone isn't 100% reliable and I often travel with it (which would leave my family without a phone while I was gone).

6. I used to do this, but my current company doesn't offer the benefit.

7. Not a bad idea -- but what if you want to go out alone as a couple? Trade babysitting chores with a friend, skip dessert when eating out (or buy Moose Tracks ice cream and take it home), and drink water.  These will cut your dining expenses dramatically.

8. I don't drink, so there's no savings here.

9. I did this a long time ago. No need to pay for something that has no benefit.

10. I prefer to buy new and drive it till it dies. I know this goes against "conventional wisdom" among money savers, but it's our preference.

11. This was the first year that my mom and dad and my wife and I didn't exchange Christmas gifts. We decided that 1) being together was all we really wanted, 2) we didn't want a bunch of worthless gifts that just take up space and will go to the Salvation Army in a year or two, and 3) we'd focus the money we did budget on the kids. It worked out great. We had a wonderful time together and no one missed the gifts.

Comments

[Harrison Loke]

Thanks for sharing. Personally, I totally agree with the tips # 1 - Save all your change. I had seen a really success real life example through my best friend. Since a child, he already save his money by saving up all the changes. According to him, he does this because he lazy to handle those changes especially the coins. He don't like to put the coins in the wallet or pocket. So he will put into a big box and every 3 months, his mother will help him to save those money into the bank. Until today, he still continue this habit. I think this is one kind of good money management habit.

[j.a.random]

I'm glad someone else agrees with my new car preference. Our big reason for new cars is the safety features. We held out for the mid-year production after the introduction of side airbags, and custom ordered a new car. It's been a great car, and will come with us to China.

And we've never had a car that we didn't run into the ground and then have a charity tow away.