Small things can give big savings

This was originally published on Monday, January 16, 2017, in the Pacific Daily News.  Click here to subscribe to the PDN.

When your budget is tight, it’s hard finding ways to save. Sometimes, the simplest little tips can make a huge difference.

Start your new year off right and start saving money. To start, switch your thoughts from being a spender to being a saver. Through practice and persistence eventually saving will become natural and yield long-term results.

  • Pay for what you need. It is normal to want to live comfortably but rent or purchase a home that is within your price range. Paying for extra space is not practical.
  • Refinance your mortgage. Take advantage of lower interest rates. If you lower your percentage even by half a percent, you can save thousands of dollars over the life of the loan. If you have a $100,000 fixed mortgage for 15 years and change the interest from 7 percent to 6.5 percent, you can save $5,000 in interest charges. If you can handle higher payments, consider a 15-year mortgage versus a 30-year. Let’s say that same $100,000 at 7 percent is for 30 years. If you convert it to a 15-year mortgage, you can save more than $75,000. If refinancing costs will exceed the savings, keep your existing mortgage and pay more every month. This effectively results in savings as well.
  • Insurance. If you rent a home, be sure you purchase renters’ insurance. Know what you are covered for and pay only for what you need. Ask about discounts for which you may be eligible. Bundling your car, home and life insurance can also reduce your bill.
  • Weatherproof your home. Evaluate your home for holes and cracks that let warm air in and cool air escape. Talk to your local hardware representative for the best types of materials to plug the areas of concern. Spending a little more on the best grade material will save you more.
  • Window treatments. Living on Guam, we receive a lot of sun, which heats our homes. Purchase window treatments that block the sunlight and keep the house cool. Consider tinting your windows to keep UV rays out of your house as well. Many residents use their storm shutters not only for storm protection but to keep the sunlight out too.
  • Plant trees. If you put in trees on the sides that are most exposed to the sun, the shade they provide will keep the house cool.
  • Roof coating. There are all sorts of different roof coatings. When recoating your roof, choose one with good reflective properties and that’s guaranteed to last long. Keep your roof white by water blasting periodically.
  • Convert lightbulbs. Old incandescent lights may cost less to replace but overall they consume much more power and also create heat. Slowly convert your lightbulbs to CFL or LED .
  • Conserve water. Inspect your home for leaks and drips. Pay attention to the sound of running water, especially when no one is using water. Water leaks can become serious problems if not fixed immediately.
  • Cable, phone and internet. Pay only for what you need. If you hardly spend time at home, you probably don’t need all the premium channels. Many of the popular channels now have apps to watch on your computer, smartphone and tablet. If you call the U.S. mainland or other countries frequently, check with your provider to see if they have calling plans. Bundled plans are also a good way to save money.

Michael Camacho is president and chief executive officer of Personal Finance Center. He has more than 20 years of experience in retail banking and at financial institutions in Guam and Hawaii. If there is a topic you’d like Michael to cover, please email him at moneymattersguam@yahoo.com and read past columns at the Money Matters blog at www.moneymattersguam.wordpress.com

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