With the economy on the verge of recession, I have decided to write another article on saving money tips. Here I outline ways to reduce your spending and increase your savings. 

Spend less than you earn - There are so many people who live above their means. I have a good friend who is swimming in credit card debt. He spends far more then he earns. Have you ever heard of the term “Champagne Taste on a Beer Budget”? Over spending really is an issue when it comes to trying to save money. Cutting spending habits is the only option to secure your financial household. 

Budget - Create a monthly Budget that includes saving money. A key component of budgeting is financial planning, which is a dynamic process that requires regular monitoring and re-evaluation of income and expenses.  

Online banking - We are in a virtual age, so if you are still using regular banks to manage basic savings accounts, it is time to move to virtual banking. Moving online usually means significantly higher interest rates and easier management. Most banks typically offer interest rates around 1-2% for basic savings accounts, but with an online account you can earn around 4-5%. Make sure the online bank is FDIC insured. Some online banks are ING Direct, HSBC, ETRADE, etc. A good website to compare savings, CD’s, and credit cards are: http://quicken.com/banking_and_credit/bankrates/ and www.bankaholic.com.

Most of the online accounts minimum deposit is $1 with no minimum balance fees.  

Credit & Debt - Negotiate lower interest rates by calling your credit card companies. Lowering your interest rate by a few percentage points can help you emerge from debt more quickly and it could save you hundreds of dollars over the term of your loan. Pay your bills on time. Many banks adjust interest rates on your credit cards by looking at your payment history not only with them but also with other creditors. Eliminate your credit cards one at a time with the highest interest rate card first.

Use Coupons - Coupons can add up to save you a lot of money, especially shopping at stores that offer double coupons. Make sure that the generic is cheaper without the coupon, and if so then it does not make sense to use the coupon.

Shopping - Shopping off season will save you money. For example you want a new patio set, buy it towards the end of the summer (after the 4th of July) and you will pay roughly half of what you would have at the beginning of the season. The same goes for clothes and shoes.

Healthcare - Do not cut your healthcare to save money. In the long run not having healthcare coverage will cost you thousands of dollars if you get sick. Saving a few hundred dollars a year is hardly worth having to pay $25,000 in medical bills a few years down the road. Prescription coverage is a must.  

Auto Insurance - Ask for Discounts. Many insurers will not volunteer discounts like multi-policy or safe driver deductions on your premium. The insurers will be reminded when you mention it, so make sure to ask. Shop around for new auto and homeowner insurance every few Years.  

One Final Tip - A bit of planning, a common goal and some serious focus will help lay the building blocks for a strong and sturdy financial future. 

NoHo Scene Festival is on Sunday October 5^th, 2008 which has 40 local merchants giving great discounts and of course don’t forget about the NoHo Card. The festival is next to the Redline, so by taking the subway you will save on gas and there is no cost of parking. 

Currently, Stacey L. Morin works for Wilshire Associates Inc. in their Private Equity Division as Financial Assistant Controller and holds a Masters of Business Administration in Finance from California State University Northridge and Bachelors of Business Administration in Accounting from Eastern Michigan University. Ms. Morin is a Freelance Business Consultant Writer on the side.  

By Stacey L. Morin, MBA-Finance, September 2008