How would you feel if someone gave you thousands of extra dollars tax free each year? Well, you can do this for yourself – without making any sacrifices along the way. It is truly astounding how much money we waste each year without getting any real benefits. By taking some simple and inexpensive steps, you can keep your money in the bank, rather than giving it away to undeserving causes.
Image source: http://l.yimg.com/bt/api/res/1.2/4XUrAfTGoNPLpPFJnk7XcQ–/YXBwaWQ9eW5ld3M7Zmk9ZmlsbDtoPTQyMTtweG9mZj01MDtweW9mZj0wO3E9NzU7dz03NDk-/http://media.zenfs.com/en_us/News/ap_webfeeds/5406acb1ee109f213f0f6a706700f457.jpg
Before we look at how to do this, let’s look at the power of saving. What would it mean if you could set aside an extra $4000 a year? Let’s assume that you are 35 years old with 30 years to go until retirement. While interest rates are low now, it’s possible that you will be able to get at least 4% return per year in the longer term if you invest in something like these CIT CDs. If you do this, you will end up with over $195,000 by the time that you retire – assuming that the interest you earn is taxed at 25%.
So, how do you go about saving this amount of money?
The first place to start is with your energy consumption at home. There are lots of ways of doing this without making your life any less comfortable. Heating is one example – the average American home with oil heating spent over $2000 on this in 2012. However, for every degree that you lower your thermostat, you are going to save about 3% of that. So, if you keep your thermostat at 69 degrees instead of 72, and turn it down to 65 at night time and when you are out, you are going to end up saving about $400. If you turn down your water heater to 130 degrees and install low flow shower heads, you will save even more. Doing simple things such as sealing drafty windows and turning off lights can also have a dramatic effect. All in all, it’s perfectly feasible to save up to $1,000 dollars a year – without affecting your lifestyle.
Another simple example is eating out at lunch. If both you and your partner spend $7 on lunch each day during the week, you are going to end up spending $3500 in a year. On the other hand, you can have a far better lunch if you make it yourself, and it will cost half as much. That’s another $1750 that you can take to the bank.
Image source: http://images.thecarconnection.com/med/2010-toyota-prius-petrol-electric-hybrid_100192089_m.jpg
Finally, think about buying a hybrid car the next time. For example, if you purchase a hybrid such as a Prius, you can save another $700 a year in fuel costs when compared to a gasoline-powered car such as a Ford Focus. When you add that to the other savings just discussed, that’s $3,450 a year – without making any significant sacrifices. With a little ingenuity, you’ll be able to come up with the other $450 – that’s less than $10 a week, which is about the cost of four cups of coffee.