Auto Insurance Information Center

January 2012

3 tips to save money in the new year

If you are looking for ways to save money, you're not alone: it's one of the most common New Year's resolutions Americans make each year.

save money in the new year

While 21st Century Insurance is dedicated to bringing you the same great coverage for less, our wish to help you save money extends past auto insurance. With a sluggish economy, decreasing home values and increasing prices on almost everything, it is more important than ever to save. Whatever reason you might have, the following tips may be able to help you achieve that goal.

Look for ways to spend less

This first tip is easier to talk about than it is to follow. One way to look at this suggestion is to think of it like this: is it easier to stop spending as much or to find a new way of making additional money? While a new job or promotion can help with this situation, these cannot be counted on to lower your costs right now. And even with an increase in salary, if you do not assess your spending you will most likely find yourself in a similar situation. The best way to get started is to list your monthly expenses and to look for ways to cut back. One change could be as small as drinking the coffee provided at work instead of stopping at a coffee shop on your way, eating in instead of at a restaurant or using coupons and sales to maximize your purchasing power - it's really as simple as that. Once you start seeing the savings add up, odds are you'll be looking for additional ways to cut back. Extra tip: write down your financial goals, as they become much more tangible (and more likely to be achieved) when you do.

Make a budget and stick to it

This tip ties into the first tip. To get started, both individuals and families need to figure out how much they can spend. Start by totaling your monthly earnings. It'll give you a better perspective on your monthly expenditures and savings. Once you have a handle on what is coming in, you'll be able to focus on finding ways to keep it from going out. Extra tip: avoid impulse purchases, as they can blow your budget instantly depending on the amount.

Pay off credit card debts

While a mortgage and/or auto loan are a part of everyday life for many, large credit card bills should not be. In order to really accelerate your saving, it is important to eliminate credit card debt. Here's a suggestion on how to do this: If you have a number of cards where you are paying interest on a balance, it can be beneficial to concentrate on paying down one at a time. So, if you have four cards with a balance, pay the minimum on three and for the fourth pay as much as you can. Keep doing that each month, until the fourth card is paid off. Eventually paying one off will eliminate the finance charges on that card and go a long way to reducing your monthly expenses. You can then use the same practice to pay off the remaining cards. To keep a handle on your credit card spending, a good rule of thumb is to have the goal of eventually being able to pay off your outstanding credit card debt each month in full. If you can't do that, it may be better to hold off on the purchase until you can.

Learning to save

When it comes to saving, the first step is always the hardest. While it may mean some modification to your spending habits it doesn't mean you have to put life on hold. By being cautious and focused with your financial choices and disciplined when paying you can make a positive change to your financial situation, and without the pressure of debt hanging over you, you might be surprised how you'll enjoy all facets of your life a little more.

Sources: MSN Money,,

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