A PENNY SAVED IS A PENNY EARNED
Lori Z. Bahnmueller
Michigan Credit Union League - Your Money Matters
Before we know it, Christmas is right around the corner. The malls are crowded, shopping lists are long, lines are even longer and parking spaces are at a premium. The holiday shopping season is in full gear. And while everyone enjoys looking for that perfect gift, many of us will be left in a not-so-joyous mood as we watch our checking accounts dwindle and our credit card balances skyrocket. The holiday season is certain to take a bite out of most pocketbooks. However, there are ways to save money that will help make the start of the new year easier to bear financially.
Saving a few pennies or even a few dollars here and there may not sound like much, but the end-product can often be significant. Listed below are five quick tips to help you save more money--most of them painless suggestions, often requiring only attention to detail rather than a significant effort.
Switch to a credit card that charges less interest. Undoubtedly, credit cards will be a popular form of payment for many of us during the holiday months, and shopping around for cards offering the lowest rates can be beneficial. For example, transferring a $2,000 balance from a typical card with an 18 percent rate to a card offering 8.25 percent will save you $730 if you pay off the balance at a rate of $50 per month. Be careful though, those credit card solicitations you receive in the mail frequently offering lower rates are usually only limited time offers (typically six months). Once the introductory period is over the company will begin assessing interest on your card's balance at their current rate, which could be even higher than your original credit card's rate. Read the fine print carefully before you accept any new card offers.
* Cash in on the heated competition among long-distance telephone companies. The holiday season always means plenty of long-distance phone calls to relatives and friends--and consequently larger bills. With the addition of the seven Baby Bells to the long-distance sweepstakes, companies are offering cash incentives to retain customers and attract new ones. Carriers such as AT&T, MCI and Sprint are all offering "certificates of savings" and cash rewards for switching companies or remaining loyal to your current one. If you haven't already been offered such incentives, call your carrier and ask for your share of the savings.
* Take advantage of the overdraft protection option on your checking account, if your bank offers it. If not, get a credit union checking account. Check payment is also very prevalent during the holiday shopping season and those who are not diligent about keeping their balance up-to-date may get ahead of themselves. While the interest rate for overdraft protection may be high, just one bounced check can result in a $50 penalty.
* Don't buy higher octane fuel than your vehicle needs. Many of us will rack up a huge number of miles on our autos during the next few months, and paying for gasoline can turn out to be a larger expense than expected. Unless your owner's manual specifically calls for premium fuel, limit your gas expense as much as possible by purchasing unleaded, 87-octane. Typically, a gallon of 92-octane will cost at least a dime and as much as 18 cents more than regular. The average two-car family can save around $200 per year with this simple procedure.
* Consider joining a credit union. Credit unions typically offer lower interest rates on loans, fewer checking fees and higher rates for savings. A credit union may also be the best place to look for that lower interest rate credit card. Over the years, credit unions have continually scored higher than all other financial institutions in consumer satisfaction surveys. Not everyone is eligible for credit union membership, but you can call 1-800-474-JOIN for a list of credit unions in your area and their fields of membership.
Certainly these are just a few of many ideas that can help you save money during the holiday season and throughout 1997. The financial pressures of holiday shopping can be stressful, but by making some smart consumer decisions along the way, those January bills will be less burdensome. Happy shopping!