The current economic environment has forced millions of people to make changes to their financial plans. Lots of people have curbed their spending habits and pushed back their retirement age. Others are returning to college or picking up a new skill to remain employable in a competitive job market. While all of these are wise decisions, there are a few unconventional moves that can increase the amount of cash in your wallet. Here are four changes that you can make to give yourself the best financial start possible:
1. Live home longer
You always learn that after college you should find your own apartment and start living on your own. With today’s fargileeconomy and competitive job market, it may make good financial sense to stay at home longer. Finding a nice apartment can easily cost you $900 or more in rent alone. That doesn’t include utilities, cable, phone, insurance, and other bills. You could easily save over $1,000 a month by living at home and kick in on some of the bills at the house. Then when you finally do move out, you could have a cushy savings account and a year or two’s worth of job security under your belt.
2. Keep your car longer
During tough economic times, it makes perfect sense to hold onto your current automobile a little longer. Too many people keep their car only a few years only to trade it in for a newer model. According to Consumer Reports, a new car lasts for an average of eight years or 150,000 miles. Many automobiles can go well beyond this and last up to 300,000 miles. There have been government programs like “Cash For Clunkers” to try and bolster auto sales. If your current car is running fine, hold onto it a little longer. It will save you from having to make large car payments.
3. Increase your emergency savings
Most financial planners will tell you to start your emergency fund with $1,000. After you reach this amount, you are taught to save 3 to 6 months of living expenses. In this economy you should double your initial savings amount to $2,000. After that your goal should be to save a year’s worth of salary. Why the increase? The current job market is so bad that it may take longer to find new employment if a layoff occurs.
4. Transfer your credit card balance
Take advantage of this low interest rate environment and roll over your credit card balance. You can find a lot of 0% interest balance transfer cards at creditcards.com and bankrate.com. This low interest rate lasts for a year. While I am not normally an advocate of using credit cards, transferring your current debt to a 0% interest card is a good move. It will save you money on interest and may help you get out of debt sooner.
What financial changes have you made since the economy has taken a nosedive?
(Photo credit: alancleaver_2000)