LexChoice Finance

Financial News and Information

Saving to pay off debt

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A few days ago I stumbled on an article that talked about an interesting way of paying off debt. It’s actually something that I’ve been doing but never thought about writing an article about it. The basic principal is to keep putting money in savings until you have enough saved to pay off an entire debt.

Why is this method of paying of debt effective? Almost every financial plan you will find involves saving an emergency fund before you start paying off debt. By saving money in a savings account until you have enough to pay off an entire debt you are also keeping an emergency fund in case something major comes up during this time. I would suggest saving enough money to pay off the debt as well as some extra before paying off the debt.

For example, we owed about $10,000 on our car. We kept putting money in our savings account until we had about $13,000. We paid off the entire balance on the car loan and still had over $3,000 in savings. If at any time during this period an emergency came up we could have paid for it with cash and then continued to save.

I’m not saying this is the best way of paying debt from a maximum amount of money saved, but I think it’s effective. Paying down large interest rate debt month by month may allow for increased money saved, but might not be as effective for some. It’s just another method to  consider for yourself.

Unplug appliances and save on electric bill

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How many appliances and electronic devices actually need to be plugged in all day long? How many of those appliances that are always plugged in do you actually use everyday? When you start thinking about it there are probably a lot of appliances and electronic devices draining energy that you rarely use.

One of the biggest energy drainers is that extra refrigerator in the garage or basement. Do you really have so much food that you need an extra refrigerator just for drinks? Couldn’t you find a little extra space in your fridge to put a 12 pack of soda or beer?

Other ideas include small kitchen appliances. Your toaster, coffee pot, can opener, blender, etc. all drain small amounts of energy throughout the day and night. How often do you really use the blender or can opener? Most of us actually don’t even use any of these appliances on a regular basis. Leave them unplugged until you actually use them and the pull the plug when you are done.

More electric drainers in the family room include the DVD player, CD changer, and surround sound, tivo or DVR, cable boxes, and even the television. Even though they only drain a small amount of electricity these electric devices start to add up quick. It’s easier to plug them into a power strip and simply unplug the strip during the day. It takes about 3 seconds to unplug it and then plug it back in when you need them.

Moving on to the next room the home office. Most computer users keep their computer plugged in and powered on all day and night. Hook up everything involved with your computer to a power strip and pull the plug before you go to bed. Items related to your computer include a printer, scanner, modem, router, and monitor. That’s a big list of energy drainers.

According to the government’s energy star program, 40% of the electricity that home electronics use is consumed while the products are turned off. The impact of this on your energy bill will depend on your particular situation–one Berkely study suggests the savings would be 6 to 26% off your total power bill.

It may not sound like a lot of savings but if you are one of the major power users who has a lot of appliances plugged in all day everyday you could save 25%. If your energy bill is about $120 per month that’s about $360 per year to keep those little red lights burning. If you are a penny pincher this is a great money saving idea!

Extreme method of saving money – Line Dry Clothes

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How much does it cost to dry a load of clothes? It costs an average of about $0.30 – $0.40 per load to dry a load of clothes with an electric dryer. If you have a gas dryer then you will spend about $0.15 to $0.20 per load. It may sounds a little old fashioned but for those extreme money savers this is a great option.

Just because I say line dry doesn’t mean you have to put up an old fashioned clothes line in the back yard. They make in home clothes drying systems that allow you to hang your clothes up to dry in the laundry room instead of using the dryer for every load.

Use this method to dry items such as t-shirts, and other thin material clothing. These items usually don’t require excessive drying anyway so hanging them up to dry won’t take forever. If you do a load of laundry every day try to line dry 2 of those per week. You’ll save about $1100 over the course of your 30 year mortgage. Line dry all your clothes and you’ll save a small fortune.

With the current condition of our economy many people are looking for any way they can to save money. Please keep reading our blog to learn more great extreme ways to save money!

Extreme method of saving money – No air conditioner

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Looking for ways to save money? I’ve decided to do a series of posts about extreme methods of saving money. What may be extreme to some however may be life as usual for others but as for me these would be somewhat extreme. My first example of extreme methods of saving money is turn off the air conditioner.

As I stated earlier many of you may already follow this money saving advice, but for those of you who don’t here is some advice. Air conditioning in a home is the single most expense when it comes to your energy bill. Instead of cranking up the air open up all the windows and turn on the celing fans, this can save you hundreds of dollars per year.

If you are the type of person who just has to have the air conditioner on then there is still hope of saving money. Adjust the thermostat a couple of degrees higher and be sure to use the ceiling fans to circulate the air. Even if it only saves a few dollars per month that’s money saved!

Another great option is to get a programmable thermostat. This allows your thermostat to automatically adjust temperatures during the day and then cool down right before you get home from work. There is no point in running the air conditioner full blast when you are not home. You don’t want to turn it completely off during the day because your air conditioner will have to work overtime to cool back down in the evening. You may end up using more energy this way and making your air conditioner work too hard.