Possibly one of the least products we shop around for is insurance in general. Many people think in their minds that one insurance policy from one company which covers the same thing will also cost the same. You are completely wrong if that’s what you think, and you cans save hundreds, and in some cases a thousand dollars or more on insurance when taking into account all the policies you have.

I remember when I took over FHA loan for a nice home years ago, that I didn’t check much into the insurance side of it, as I was very happy with the overall price, which was included in the monthly payment.

After several years I got the mortgage payment book in the mail for that particular year, and I was shocked as the price had gone up almost a hundred dollars a month.

Assuming it was on the mortgage side and simply an error, I called up the bank and found out it wasn’t the mortgage that had changed or an error, but the insurance company I inherited when I took over the FHA loan, which at the time I didn’t bother comparison shopping for insurance.

Anyway, I called around at that time as I wasn’t going to be hit with an added thousand dollars a year for the payment because of insurance.

So I had some people come out and check out the house and land, and I was surprised to find out not only was the insurance far less than the current offer for the same coverage, but also was less than the coverage I had been getting for several years before. Nice!.

In the end I ended up paying less than I had several years before the new policy had attempted to be put in place.

Bottom line, check every insurance policy you have and call around to find the lowest price you can get. Just be sure you’re comparing apples with apples and are talking about the same coverage, or find out if you’re over-insured, which many times can happen.

Another tip to consider is in relationship to deductables. Now I’ve always been one to take as high as a deductible I can. Now I can do this for my home and car because I know my lifestyle. I don’t live the type of lifestyle that is risky and prone to damaging my property or automobile. So while anything can happen, I’ve never had a problem with the higher deductible, and have saved a lot of money for taking it.

Once you do that over a couple of years, you can even save from the what you would have had to pay and have the deductible set aside just in case an unforeseen or unpreventable accident happens or storm comes that can do a lot of damage to your home.

Adding a few little and relatively inexpensive items to your home can also lower your deductible, such as improved home security measures and fire alarms, etc. These additions can take over 5 percent off your insurance cost and once in place can be used year after year without added expense.

And if you move, don’t assume your current insurance carrier or carriers will be the low price leaders in a new state. I’ve personally moved a number of time, and almost without exception the prices of the policies from companies in one state are less competitive in the new state I move to, and so I shop around again using the same methods mentioned above.

The bottom line is you can save a lot of money by the few simple steps mentioned above on insurance.

Again, the key and trick is to have the discipline and will to take that extra money and put it away for your future.

Many people will say the rich are different than the ordinary person, and they would be right, but not in the way you would think.

For the purpose of this article, I’m defining rich in terms of those that have a net worth of about $1 million.

Most of the time when people say the rich are different than the ordinary person, what they’re really doing is thinking in terms of the super rich - the multi-millionaires and above.

But for the ordinary professional who builds their wealth over time to reach a net worth of over $1 million, they are different than us by their strong discipline in financial matters, and practice things just a little differently than the rest of the population, which results in the building up of their wealth.

There are several aspects to what is the discipline among the wealthy which helps them reach their goals, but all of them are products of one thing: they spend just a few more minutes a day going over their finances.

You may not believe it’s as simple as that, but it is. Studies have shown that the average millionaire doesn’t live as differently from the rest of us as you may think, rather their financial discipline is simply a little higher than ours.

But when you add that discipline up over a period of years, it surpasses the average net worth of people not that different from them, who refused to defer their gratifications and ended up living from paycheck to paycheck, even when they make more money than the others.

With that in mind, here are several of the things that emerge from spending a little more time each day taking care of finances. Oh, and when I say several minutes, I’m literally talking maybe an extra 15 minutes a day to check things over and confirm what’s going on. That’s it!

Never buy in season

One of the major practical steps wealthy people take is they never buy products in season. When you buy in season you will not only never get a discount, but you’re usually going to pay more for the item than you normally would otherwise.

So if they want a fan for example, they go looking around near the end of summer when prices are knocked down significantly, and many times I’ve seen those prices cut 40 percent or more from the summer months.

The same with winter clothes or related items. The time to buy is right near the end of spring when people are thinking of gardening and fun in the sun. Again, prices are way low at that time.

Point is, they literally save hundreds, and probably thousands of dollars a year by buying out of season.

Never pay retail price

A similar but different area is the wealthy won’t pay retail price for anything. This is slightly different because there’s always deals to be had, and not all of them are relegated to out of season items.

No matter what though, only in certain circumstances will the rich pay retail.

Know which items to pay for quality for

While the wealthy definitely watch what they spend on, the other trait is they know when they should pay for quality, and one of those areas, interestingly, is shoes.

They want a good pair of shoes and are willing to pay top dollar for them. This is obvious for the comfort reasons, and when the soles of the shoes wear out, they will go to a cobbler to get them re-soled in order to keep the comfort (yes there still are cobblers out there and they cater to this clientele).

Know where all the money goes
 
As part of their spending a little extra time a day on their finances, the wealthy go through what they spend in order to get an ongoing grip on what their spending habits are.

They know it’s easy to get out of control quickly, and spending that little extra time going over receipts keeps them in check. We should do the same.

Frugality

We always hear the word frugality and think of living on washed and dried paper plates or recycled goods we would have no desire to use over again. But with the wealthy frugality is target so they get the best bang for their dollar, and they not only save money, but invest that saved money over a period of years and so generate their $1 million or more net worth.

What most people think of the wealthy are those that live extravagantly, but what they have is the trappings of wealth, and are one step away from poverty, bankruptcy or foreclosure.

In the end, you really don’t know who the wealthy are as I’m talking about them, as they won’t show it in the way some people like to; those you are deep in debt to live the lifestyle they’re showing off. Many of the not-so-wealthy of course do the same.

The bottom line is if we follow in the footsteps of these good financial examples, we can build up a similar net worth over our lives and have all that we would ever need, and in most cases – want.

If you have fairly predictable expenses for day-care or medical needs, there’s a tool you can use called medical and dependent-care flexible spending accounts (FSAs) which offer opportunities at minimum, hundreds of dollars in savings a year.

What’s especially great about these is they’re tax free while you are able to save $250 for each $1,000 you spend on care. that’s not all the benefits of its though. You can also save on your Social Security taxes because you don’t have to pay that when putting away this money either.

Are there any tricks or unintended consequences here which could hurt you financially? None at all, but you do need to manage it responsibly to protect yourself.

While that sounds scary what I just said, in reality all it means is you need to put money into the FSA somewhat conservatively because when the end of the year comes you don’t get back what’s left because of the benefits you get.

This should never be a problem with daycare, and for other medical expenses, you should be able to manage that fairly well from past expenditures on a yearly basis or if there are certain medical needs you have that have fixed costs.

The point is you shouldn’t try to game the system here, because if you put too much in it’s gone. Use it responsibly and you’ll save hundreds of dollars a year, and possibly from a thousand to two thousand, depending on what you pay out.

Why this is so great is you will have to pay these expenses anyway, so it just makes sense to pay for them through an FSA so you can take advantage of this great plan.

Eventually you’ll get a reimbursement check for your taxes. The key is to put it away for savings, which is the reason you use an FSA in the first place.

As always, don’t be tempted to take your windfalls and go spend them as soon as you get the check in hand.

If you want to occasionally reward yourself that’s a real must, just do it on a limited basis and occasionally. Keep the long term strategy in mind and know that if you commit to your savings plan and are responsible with it, there will come the time when you can buy almost anything you want for cash and never feel the weight of debt or spending what you really don’t have to spend.

An FSA is one great tool you can use to reach those savings goals.

After your regular bills and debts, like mortgages, student or car loans, the vast majority of people spend the most money on communications and media products and services.

That is of course a part of our everyday lives and in most cases necessary, but many times we buy more product or service than we need or use, and there are a number of ways to bundle or cut back on these to save a significant amount of money, which you can of course than use to build up your savings or use to invest.

Here are several tips on what you can do to cut back on your media, communication or electronic expenses:

Bundle your services

Amazingly, a lot of people either aren’t aware of or don’t bother with having their cable TV, Internet and phone services bundled.

It’s really simple, just call you your providers and ask if they bundle them together, and what type of savings you’ll get if you buy their services that way.

From there, just do some comparison shopping to find the best deal and service and make you decision and do it.

Depending on how much service you’re talking about, this can save a lot of money in and of itself.

Another great things is you save time and money through the convenience of paying for it all in one bill too.

Cable itself

Here’s one you can definitely save on when you think it through a little. This works well for someone who has a lot of extra premium channels and other services which you may never or rarely use.

Just take inventory of your lifestyle and see if the extra services are worth what you’re paying. If you don’t use them much, I’m sure having dozens of TV channels and the ability to watch TV or movies on the Internet is more than enough for even the most rabid TV or movie fan.

Magazines or newspapers

There are a lot of people that of course have already done this, but why pay for a magazine or newspaper when you can find everything you would ever need online, or secondarily on the TV if that’s your choice.

Sometimes a small town newspaper offers some value, but overall, magazines and newspapers carry the same stories you find on the Internet through a variety of devices. Why pay extra for print media?

Telephone and cable bills

Go through your telephone and cable bills and see what it is you’re paying for. There are so many extras you may have signed up for that you may have forgotten and never use them or have no need of them.

This could include music channels on cable or all those fancy extras on the phone you never use or care about; whether it’s a land-line or mobile phone.

For the mobile, just think texting and you could get rid of a lot of money spent you never need to.

Mobile Phones

Speaking of mobile phones, here’s a place that most people can really cut back on, depending on your lifestyle.

You may even have a couple of plans which are costing you a lot of money. If your primary purpose is for emergencies, don’t get hooked into all those plans with large monthly fees or minimum payments.

Again, go through it all and look at your actual practice and lifestyle. You may be surprised that you’re paying for services you never or rarely use, and usually they’re at hefty prices when added together.

Internet Access Speed

While many of us always want to think we have a need for speed in many things we do, in the case of the Internet, again, it depends on what you’re using it for.

If you’re a heavy user like me, and use it for video, and to a lesser degree – audio, then you may not have much choice as to what you pay. But if you use the Internet for mostly reading and communicating with others, you can easily get a plan for less and save a lot of money with less speed.

You could experiment a little with a slower cable Internet speed, as a number of people say they’ve lowered their Internet speed and really haven’t seen any change in the experience or performance while surfing online.

Conclusion

No one will be able to do all of the suggestions above, but just do a couple of them or think of other things you pay for in life which you rarely use or need, and you could come out with a nice amount of money saved you can than use to save or build your wealth.

Here’s a savings tip that will change the way you save and has the potential to really help you build wealth and enjoy peace of mind while doing it.

So how does it benefit you to pay yourself rather than your debt? Think in terms of any type of debt the majority of people – and probably you – have. There’s usually a school loan involved if you’re younger, credit cards, mortgage and car loans, as the major debt most of us will experience.

Now if you’re in the place where you’re debt is out of control to the point of being unable to service it, that’s a different issue all together and must be dealt with differently than we’re talking about here.

Let’s assume you’re able to pay your debt and survive, but you have little to put away for savings or investment when you’re through for the month.

One fantastic thing you can do is celebrate when you get one of those debt loads paid off. Now here’s the secret though. Rather than using that money to pay down other debt, start to sock it away in savings or an investment vehicle of some sort on a monthly basis.

Think of it! Rather than paying an institution you owe, you’re paying yourself what used to be paid to the institution holding your debt.

Not only is that psychologically exhilarating, but it puts real money in the bank or whatever you’re investing in, and it won’t take long before it becomes a nice sum.

The idea of not only paying down debt, but now no longer having that debt and instead putting it away for your future is something just can’t be beat in personal finances and money management. It’s turning the tables on your lender and making yourself the payee.

Again, this works when you’re still able to pay off your debt without suffering the inability to pay your bills. If your debt is so out of control that you struggle to live, obviously that’s the priority to deal with.

But assuming you’re doing okay but just want to quicken the timeline of building wealth, take that money previously used to pay down your debt and invest it rather than spend it.

This works great because you see double the results in the first month. Say you have a $100 payment each month. You not only don’t have to pay that any longer, but you have an extra hundred to sock away for the future.

Before I even get into this, you need to understand that an emergency fund is a must for anyone. The reason this is so is there is no way to predict what the future will bring, and consequently, to cover unforeseen circumstances or events which could put you in financial trouble, you need to build up an emergency fund to protect yourself.

Now what is an emergency fund as to its overall purpose? While I already stated the obvious that you need financial protection, the practicals of it is your’re buying time. That’s the ultimate result of having an emergency fund put aside.

What time does is offer you the opportunity to go out and find a job if that’s what happened, or to think through what your next step should be.

If you haven’t bought time with an emergency fund, you’ve basically limited your options to moving in with your mom or dad, or to accept the first job offered to you in order to keep your current lifestyle going, or to even stay in the home or apartment you own or are renting.

No matter what you do in the financial realm or what your goals are, be sure to make an emergency fund the first step toward your financial health and ultimately to build your wealth.

If you don’t have an emergency fund build up, you’re forever paying out what should have been used to put away in savings to build for your future retirement or lifestyle choices.

The reason is there is always some type of smaller event coming up that you weren’t aware was going to happen, and these endlessly eat away at your capital if you aren’t committed to putting away to build your emergency fund as the foundation of the rest of your financial strategy.

When you come down to it, don’t delay in any way in building up your financial safety fund. This is why I always advocate paying yourself first in all your financial practices, as there will always be something available to spend on if you don’t get into that practice.

But to get into that way of life you must commit first to doing it and take the first step. That’s always the hardest thing to do. Once you begin developing these financial habits, it’s surprising how easy it is to do it, and there’s an increasing sense of accomplishment, satisfaction and ultimately – the feeling of being prepared for what life may bring your way.

Just commit to taking that first step and decide on what you will put away and at what interval to build your emergency fund. Stick with it and in not too long of a time you’ll have a solid foundation to work the rest of your financial strategy from.

There isn’t a money manager of financial adviser in the world worth their salt which doesn’t know and understand the greatest secret to successful savings in the world, which ultimately leads to discipline from the habit developed over a period of years.

One of the reasons this strategy isn’t employed by that many people is we wrongly apply a teaching that is correct in other areas of life but doesn’t work work when we apply it in the financial management area of our lives, as it’s one of the reasons we have problems in the first place.

Now the exception to that rule is when we have a debt addiction problem, and we have spending habits or emotional moods or swings which drive us to buy something time and time again which leads to a debt load which is crushing and ends up affecting all aspects of our lives until we deal with it. That’s a different problem though, and that must be handled first before anything else. If it isn’t, no matter what you do in cutting back on expenses and building up your savings, it’ll backfire, as you will be one mood or swing away from undoing several months of hard work, putting yourself in that endless cycle and maze you can’t get out until you take a stand – basically against yourself.

So what is that one thing that we’ve been taught all of our lives, and which is correct in almost every circumstance, but in the case of savings it’s not? It’s focusing on yourself first. In other words, it’s employing a form of what seems to be selfishness and irresponsibility if you don’t understand why you must do it.

What’s the simple practice I’m talking about. If you haven’t ever heard it before, or if you’ve heard it before but neglected it, don’t do it today: it’s paying yourself first! That’s it!

This is as powerful a financial strategy as you’ll ever use in your life, and those that practice this as soon as possible will be wildly successful in their finances in contrast to those that don’t practice this.

There are of course a lot of ways you can do this. For those with little discipline at all, you should have automatic deductions taken out of your check to put into a retirement plan. There are a lot of ways to do that, and this particular article isn’t for the purpose to getting too practical with all of this, but understanding the power of paying yourself first, no matter which methodology you use or the financial vehicle or vehicles you choose to use.

Paying yourself first takes care of all excuses and the discipline you need to hold on to your money. When you pay yourself first and put it into an investment or savings account of some sort, it’s there. It’s not going to go anywhere and you shouldn’t be able to get at it easily or without cost. For example, having penalties for withdrawing, etc.

So when you set aside money for savings and building wealth first, and you don’t have access to it without pain, then you will learn the other ways of saving money that can help you live how you want to live without feeling like you’re losing out on everything.

If you attempt to do the saving money thing first, without paying yourself first, what usually happens is you do in fact learn to cut costs on a variety of things, and then you go out and spend that savings on other stuff unrelated to building a financial safety net and ultimately great retirement.

In the case of your personal finances, this is the one place you need to take care of yourself first. If you don’t, you end up being part of the problem rather than a part of the solution.

It isn’t selfish in reality to pay yourself first, as taking care of yourself and your family is a way you can help everyone, as you’re not a burden on society and your family can count on being taken care of because you paid yourself or yourselves first.

While we’ve been talking a lot about debt and the numerous ways it helps our lives to eliminate it, one of things we do need to understand is it’s a different purpose to eliminate debt and to look for great deals at low prices.

Some may think this is obvious, but I’m talking about doing things for the purpose of releasing money in order to build up wealth. Paying down debt, while important, and it can indeed help you set aside more money for wealth building once you lower it though a number of strategies, like transferring debt from a high interest credit card to a low interest card. That’s an immediate release of funds. The problem is, most people really addicted to debt need to focus on paying down that debt before they think in terms of trying to build up their wealth.

Having said that, I do think it’s good to take symbolic steps which can help you psychologically and at least put a little bit of money away, even if you have a heavy debt load. But overall, when you cut back on debt load and expenditures, it’s best to take that savings and tackle your debt before anything else.

Now the reason I lump this together with finding good deals, is many people are looking to cut back on monthly expenses for the purpose of putting away money for themselves.

This is a different purpose and a different practice, and you can see the results instantaneously as you take money saved and apply it toward building a financial moat and preparing for your retirement.

I mention this because I’ve communicated with people that sometimes confuse these two purposes of deal with our financial circumstances, when they are completely different issues, mentalities and financial challenges to work through.

When it comes down to it, lowering and paying off debt is to get you out of bondage to the lender, while looking for and getting good deals is for the purposes of lowering monthly expenses, building up financial protection and putting away for the future.

With one you’re releasing funds to deal with the past, and with the other you’re putting away funds to prepare for your future.

Debt is dealing with major financial surgery, and must be approached that way, while looking for deals is saving money through a thousand cuts. Each has its place, but we need to be sure not to confuse them, as they are completely different financial issues we’re dealing with, and it’s essential to understand one from the other when working through the financial morass we call life.

One of the major enemies of savings is in fact carrying a heavy debt load. It’s not worth the time looking at various savings programs, or for that matter, even ways to budget if you don’t deal with the underlying problems of why you’re continually under a heavy debt load.

Now I know there are certain types of debt that are good debt, although it is still debt that must be taken care of, but I’m talking about lifestyle practices which can be brought under discipline, and which needs to be identified and dealt with by you.

Before we get into that though, recognize that one of the best ways to grow your savings and ultimately to build wealth is to free up your capital in order to create a savings and investment plan. The way to do that is by eliminating or significantly reducing your debt.

It’s surprising once you’re out from under the burden of debt the ideas that come to you concerning how to better invest your money. As a matter of fact, many times simple ways of investing are clouded because debt can do that to us, as it seems to separate us from clarity concerning the matter.

The bottom line is, if you don’t have money to invest or put away, you’re never going to be free to do what you want when you want, as debt keeps you a servant until you’re released from it.

I’ve been out of complete debt for well over a decade, and the time and money I have to put away for whatever I want is always there, even if my income may be cut back at times, or I’d rather spend time doing something else, rather than spending all my time only making money or investing.

We’ll get a little more into freeing yourself from debt in the articles ahead, but for now, understand that it’s not perfecting some type of budget plan which will deliver you from debt, that’s the secondary practical step to take.

What needs to be done first is to admit to what it is that debt really is, and that is you spend more each month than you take in. Simple to understand but difficult to deal with if you’ve become addicted to debt in a way that you have problems stopping spending.

I know we’re getting a little into the psychological side of debt here, but this is really where it all starts, and there are many reasons why it could be happening in your life on an ongoing basis.

With that in mind, you should take an honest evaluation of yourself to see why it is you spend how you do, and from there look at the best way to develop that dreaded word and practice: budgeting.

Budgeting works, but not if you don’t face the reasons why you’re overspending. Once you identify the why and where, then developing a budget makes sense. If you don’t what will happen is you’ll do the same thing many people do when losing weight. They’ll start the usual idea of diet and exercise, but because they haven’t dealt with the underlying reasons of why they’re overeating, they fail time after time until they completely give up on attempting to lose weight, because they believe the diet is the key, rather than looking at the reasoning behind it all.

That’s the same with budgeting. You can develop a budget, but if the reasoning behind why you’re continually spending isn’t faced, you’ll do the same as a diet, and go through budget after budget with a few changes for each one, and eventually just go back to your spending practices again.

Having said that, a budget is the answer in the sense of practically taking care of the issue, but if you continue on in your ways, in many cases lying to yourself, you’ll find that even though you think you’re adhering to your budget, you’re in reality pretty much spending as you always have.

The reason for all of this isn’t to just get rid of debt though, as that’s only a first step. You’re doing this so you can get more money to put away and build up your wealth. Just like weight loss, it’s not enough to just cut back on something, as that will never carry you through. Thinking on things like the benefits of a longer life and feeling physically better on a daily basis is a part of the overall success of those that faithfully adhere to dieting.

Budgeting is the same thing, as it’s essentially dieting your money in order to protect yourself financially over the long term, and eventually to get everything you want without the weight of a debt load you’re not able to carry.

If you live in the United Kingdom, a great option to help you get out of debt might be an IVA. An IVA is an individual voluntary arrangement, a great alternative option to bankruptcy for those who want to pay off their debts.

In the end, why pay your money out for things you can temporarily do without, in order to be able to buy whatever you want in the future without adding the stress of too much debt to your life?

This is why so many Americans are starting to pay down their debt now, as the recession and difficult financial circumstances have woken them up to the reality they can’t afford to live this way.

Now once that debt is paid down, we can then start to put more money into our savings and ultimately building up our personal wealthy at a much faster and higher rate than we ever have before.

With the coming of the new year, the recession is expected to continue – no matter what government reports say – and so you should consider a couple of things concerning your savings account you set aside to protect you in times of emergencies.

There are a couple of things to consider in our economic times that will help better prepare you for the near future, that promises to be about the same as it has been for the last couple of years.

Keep in mind that many companies continue to lay off, reports continue to come in that the jobs lost over the last couple years may never return, and the so-called recovery will be a jobless one.

In other words, be sure to keep your emergency fund built up, and during 2010, I would advise you build it up for another several months at least, and if you can, up to a year. If the worst happens and you’re laid off, in these economic conditions you’ll have to assume it’ll take at least a couple months more than normal to get yourself another job. I would think in terms of at least several months more than normal to find a job if you’re laid off or fired; so building an emergency fund to reflect those realities should be part of your financial strategy for 2010.

The second element to take into account is the inflation rate. Already commodities are starting to rise in price for 2010, and the commodities rising in price directly have an effect on regular consumers. For example, oil prices and agricultural products are already rising in price, and that should continue on throughout the year.

While oil and related products are less than 5% of what we pay now, it is projected to reach as high as 6% or more for the year, which historically causes consumers to spend less during those period of times. More importantly, we need to prepare for those realities with our emergency funds, thinking in terms of adding an additional five to six percent in it to protect us during these times of inflation.

How to do that would be to get an accurate count of what your monthly expenses are on average through the year. Assume you’ll be paying an extra 5% during 2010 for living expenses; including oil, gas and food.

If your expenses are $15,000 a year say, and you’re building up a fund to protect you during an entire year, then just multiply the $15,000 by about 5% in order to come up how much more you want to put into the fund in case you lose your job or some other unexpected emergency arises which makes take a leave of absence or quit.

Either way, if you do, and you’re expecting your current emergency fund to take care of you for a year, and the cost of living has risen by 5%, you’ll have less money and time to work with than you originally thought. That’s why we must keep up with inflation to be sure we adjust our emergency fund reserves accordingly.

As far as the job market goes, it doesn’t look good in 2010, and that demands more money to be put away in my estimation, as the time it will take to get a new job could be much longer than normal.

Add inflationary pressures and longer time to find a job if you’re laid off, and you see how it would be wise to add several more months to your emergency fund at least, and if at all possible, I would extend it from at least six months to a year if you can, as the job market is that tough.

An emergency fund is there for you to buy time, and time is at a premium during an economic crisis, and inflation can cut back on the time you have it you don’t pay attention to it.