Owing less money will not only build your credit scores, it will reduce your stress levels. Here are 2 ways that consumers have found to spend less and gain more.
1. Get rid of your car…
Owning and maintaining a car drains $6,000 to $10,000 from your income each and every year – more if you’re also making a car payment or paying to park.
In areas where public transportation is available, it makes good sense to get rid of the car and rent one only when its needed for a long trip, a special occasion, or for those times when shopping means coming home with a bulky purchase.
Major car rental companies are now offering hourly as well as daily car rentals, because they’re now competing with a growing new business: Car sharing companies.
Car sharing is fast taking hold in major cities along both coasts and the Midwest – with 75,000 already using the service and an estimated 2,500 new members signing on each month. At present, the two major car share providers are Zipcar and Flexcar.
Consumers who have gone this route say they get a triple benefit – they’re walking and bicycling more, and feeling more fit, and they don’t have to spend the time involved in maintaining a car. Rentals and car shares come to them clean and ready to go – eliminating hours as well as dollars spent on filling the tank, getting the oil changed, washing the car, etc.
The drawback: You can’t take pets unless they’re in carriers, and you can’t leave all your “stuff” in the car, handy for when you need it.
Removing that car debt from your credit report will also give your credit scores an instant boost.
2. Rent out a room in your home.
This is a common practice in college towns, where homeowners offer their extra bedrooms to college students. But it’s now a growing trend in cities, as young people joining the workforce seek affordable housing. The safety and security of living with a family is attractive, and the cost is less than that of a clean apartment in a good neighborhood.
For the homeowner, it can mean having someone in the home to keep an eye on things while they’re away, or to help with yard work, housework, or even child care – as well as extra cash to help pay down debt quickly… and raise those credit scores.
Before you try it, check the local zoning ordinances, and be sure to draw up a tenancy agreement that specifies both the payment terms and the sharing of common areas.
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