Audio clip
Dan Stevens
With talk of a gathering recession and Chattanooga gas prices at an all-time high — $3.15 a gallon for regular unleaded at one downtown site — many consumers are saving money any way they can.
But the ultimate answer for most people is simple, said financial adviser Mike Brown: They need to quit spending so much.
“If you can make yourself a cup of coffee for a dime, don’t go to Starbucks and pay $4.25,” he said. “This is not rocket science; it’s material.”
Ditching the high-priced coffee for the brew-at-home kind is the first step toward saving money this year, said Mr. Brown, senior vice president of Morgan Keegan in Chattanooga.
“This is not stuff that you need eight to 10 years after high school of education to figure out,” he said. “Get a handle on your spending.”
Mr. Brown, along with other financial professionals, agree the best way for people to save is to first look at the money going out and see what can be eliminated. There are also other ways to save, including first making a budget to distinguish needs from wants.
Once that budget is made, people need to stick to it, said Dan Stevens, a credit counselor with Consumer Credit Counseling Services in Chattanooga.
“Making a budget is the only way to get what you need out of your money,” he said.
Mr. Stevens counsels people daily on ways to save money and get out of debt. He advises clients who own homes to make extra mortgage payments, which can translate into big savings.
“If you make two extra payments per year you can pay off a 30-year mortgage in 15 1/2 years,” he said. “You will still have the flexibility of the 30-year, but you will accomplish the same thing.”
Atlanta-based Consumer Credit Counseling Services Inc. recently polled its clients for ways to save money. Buy items in bulk and pay bills online to avoid using stamps, they said.
Consumers’ need to save money has even spawned a Web site called pinchthepenny.com. The Web site was launched last month by entrepreneur Daniel Dietrick.
Through the site, consumers can compare cell phone plans and print coupons on everything from sporting goods to contact lenses. The site offers tips like switching out credit cards for ones with lower interest rates, changing cell and home phone plans and shopping around for cheaper auto insurance.
“If you took an hour and sat down and looked at your phone bills and credit card bills, there are ways to save money by comparing prices and services,” Mr. Dietrick said from his residence in Winter Park, Fla.
Establishing a plan for saving is one of the most important things people can do for themselves and for their futures, Mr. Stevens said. In that plan, people should pay themselves just like they would any other bills.
“In real life, bad things happen and you have to be prepared for them,” he said. “Because you have not only the actual trauma of whatever that is, but also the financial aspect of it as well.”
BOX
Top ways to save money:
* Eliminate unnecessary purchases
* Create a budget and stick to it
* Purchase items in bulk
* Save a stamp, pay your bills online
* Make two extra mortgage payments in a year
Sources: Consumer Credit Counseling Service Inc. of Greater Atlanta, Consumer Credit Counseling Service in Chattanooga
On the Web
www.cccsinc.org
www.mycreditcounselors.com.
www.pinchthepenny.com
