With the downturn of the economy, many of us found it difficult to maintain the savings necessary to cover the bills and stay debt-free. Many fingers have been pointed to our lower incomes, yet a 2000 study, “Choice, Chance and Wealth Dispersion at Retirement”, found that the fingers should be turned around and pointed at ourselves, especially when it comes to saving for our retirements. With the right plan, people with the lowest tier of income were able to save more money than those making more than them, only proving a rational point. The result of this study seemed too simple, yet true: spend less than you earn.

Although it looks easy on paper, we can all sympathize that this is not the case. Lower incomes DO place a burden on meeting all expenses, but with some simple changes made in your everday life, you can save up to $12,000 yearly!

1. Rid yourself of unused items within your home- by looking at clothes alone, base your decision to keep/sell on whether you have used this particular item within the past 6 months. If not, hold a garage sale and start reaping the benefits of selling items not often used, or join with a friend and hold a dual-garage sale. The more items that are available, the larger the crowd and the higher potential of selling.

2. Quit smoking- you know it’s a bad habit, so why not stop not only for your health, but for your pocketbook as well? In the state of Iowa, the average pack costs around $4.50. If your smoking habits constitute an entire pack per day, this can amount to over $1,600.00 each year.

3. Reduce the time you spend driving- if available, cut back on personal transportation and rely on public instead. This can cut costs like gas, insurance, and maintenance costs. The Cedar Valley offers the Metropolitan Transit Authority (MET) and their schedule can be found at www.mettransit.org.

4. Buy used clothing- your expenses on clothing can be cut in half by simply shopping at gently-worn clothing stores or auctions.

5. Cut up your credit cards- too often, credit cards are used for large expenses, virtually taking future money out of your pocket. Instead of ending up on a dead-end road and constantly paying back credit, cut all of your credit cards up except one. Use this only for a large emergency, and instead, put aside money for an emergency fund for other large purchases. If you have the patience to wait until you actually have the money for purchases, you could save around $1,000 on interest alone, on an APR of 14.4%.