This installment of saving hints will focus on some of the essential areas that all of us possess; paying for your house, maintaining your car, and paying your bills are areas of interest to us all. Most people live in a house these days, in fact, that is the accepted way to live in most technologically advanced societies. This is probably the first dream of young married people, to buy a house. It sort of "establishes" you as having arrived at adulthood. Paying for this huge possession is a secondary matter, but the reality of the monthly bills comes quickly on the heels of the purchase. Second only to our house is our family car. In this society it is not possible (or nearly impossible) to accomplish day-to-day living without a car. One wonders how the pioneers did it with only covered wagons. Paying for these items, houses and cars, has become most people’s purpose in life. Get a job, get a raise, stay there for more years than you can imagine, and get in the habit of making monthly payments on everything necessary to keep you healthy so you can buy more stuff and pay more bills. Maybe some of the following suggestions will help out a little.

1. Prepay whenever possible. Whenever you take on a mortgage or other large loan you will be making payments to the lending institution for many years. Mixed in with the pay back amount will be a substantial interest payment. In the beginning of the pay back period you will be paying almost all interest and very little on the principal. Roughly, you will be paying the lender back three times the amount that you borrowed. Sounds outrageous when you see it that way, doesn’t it? Well, here’s a better way: right from the beginning, send in more than the amount of the bill. For example, if your mortgage payment is five hundred dollars per month, send in six hundred dollars and include a note that states that the extra hundred dollars is to be applied to the principal. You will be able to pay off that loan quicker than you thought. If you can double, or triple, the amount of the monthly payment, you will pay off the entire loan in a few years instead of thirty. And the best part in that you will save money on the interest. Overall, you will pay less money to the lender when you pay the loan off faster. It is possible to pay a thirty year loan off in less than four years, while saving thousands of dollars.

2. Buy a good used car and save thousands. Anyone who buys a new car from a dealer is asking to get screwed. It is well known that when you drive a new car off the lot it loses a large chunk of its value. Instead, buy a car that is in great shape that is a year old. Car dealers are happy to have a customer buy last year’s unsold cars. You get a deep discount and you can get a better deal by offering cash instead of taking a car loan. The dealer doesn’t want last year’s models taking up space on the lot when he has a new inventory coming in. You save thousands of dollars, the car is essentially new because it hasn’t been driven, and you can get all the service guarantees if you make that a condition of the sale. After all, if you bought a new car, in one year it would be the same as buying the year old car – except that buying the year old car today saves you plenty of money.

3. Let the bank pay the bills. Of course, they are getting the money from you to pay the bills for you but you can save money and time, and gain convenience. It wasn’t too long ago that a stamp to mail a regular letter was three cents; now it’s forty-four cents for the same letter. Envelopes cost money too. You can ask your bank (where you maintain a checking account) if they provide a bill paying service. If so, you can have the bank send out a check, or a money transfer, to your creditors every month. No more forgetting to mail the check, no more buying stamps and envelopes. All you must do is maintain a balance in your account and the bank will do the rest. The bills are always paid on time so you never get hit with a late charge (more savings for you).