Welcome back for Part 2 of our Saving Money Tips series. We hope that you’re already using some of the great Tips that we gave in Part 1 and, without further ado, we’ll get started with Part 2 and more excellent advice and Tips for saving money in 2013.
One of the most important ways to save money is not to spend it on interest. This means that, wherever and whenever possible, you should pay-down and pay off those credit card and other balances that are charging you high interest rates. The fact is that credit card interest is one of the biggest factors that add to your debt load.
Thus you should use your extra money, when you have it, to pay down these high interest accounts. This is no-risk and will save you a large chunk of change, increase your credit score and indeed enable you to start saving more money much quicker because you won’t be spending it on interest.
If you have an excellent credit profile you should be able to get credit cards with very low or no interest. Find one that has a no-cost balance transfer offer and transfer debt on a high interest card to the lower interest card to save money on interest right away.
If you have more than 1 credit account that you’re paying every month (and most of us do) you’ll need to prioritize them from highest to lowest and pay off the highest first. You can even pay much more to get them paid off and do this one at a time until you’re done.
If you don’t have a retirement plan at your work you should start one. If you do you should increase your payments into it. This is a great investment for a few reasons, including that it reduces your taxable income and grows without a tax burden.
A Roth 401(k) is one of the best retirement plans available. Contributions are made with money after you’re taxed, withdrawals won’t be taxed and thus you’ll keep your entire savings amount.
Opening an IRA account is also an excellent idea and will allow you to keep much more of your hard-earned money in the new year. Open one with your bank, credit union or a brokerage firm and then you can invest your contributions as you see fit.
These Tips by the way are being presented in a very simple way. If you have questions or concerns always talk to a trusted advisor before doing anything and look before you leap. See you back here soon for Part3!