You might be surprised at just how expensive it is to have a below-average credit score. The lower your FICO score is, the more you’ll have to pay every month for everything from your mortgage to your car insurance to your credit cards. Over the years, this can add up to many thousands of dollars of extra money down the drain. This is why it’s so important to make an effort to boost your credit as far as possible.

The median FICO score is currently 723; in other words half the population’s scores are above that level, and half are below. The interest on just about all forms of financing (apart from student loans and payday loans) is calculated on the basis of how your score relates to that number. It can also impact your eligibility for a loan, especially if your credit score is far below the median.

If you’re like most of us, your mortgage is where you will see the biggest benefit of having a good credit score. Although general mortgage rates are currently at an all-time low, that doesn’t necessarily apply to all borrowers. This table shows the cost of taking out a typical 30-year fixed-rate mortgage of $200,000:
FICO Score Rate Monthly payment Interest paid over 30 years Additional cost of poor credit
720-850 5.922% $1,189 $228,072
675-699 6.584% $1,275 $259,074 $31,002
620-674 7.734% $1,431 $315,021 $86,949
560-619 8.531% $1,542 $355,200 $127,000

The borrower with good credit (a 720-850 score) pays $1,189 a month. This equates to $228,072 in interest (plus the $200,000 principal) over the whole 30 years. The borrower with a 675-699 score pays an additional $31,002 in interest over the term of the loan, while the person whose FICO score lies between 620 and 674 has to find an extra $86,949 compared with someone with a high score. The borrower whose credit score is only 560-619 and is seen as a poor credit risk has to pay $355,200 in interest to borrow $200,000 over 30 years, which is $353 more every month than the first borrower, or a whopping $127,000 extra during the life of the loan.

Similarly, if you take out an auto loan for, say, $20,000 for 48 months, a low credit score can cost you a lot of extra money. With a FICO Score of between 720 and 850, you might be able to get a 6.282% rate and pay $472 a month. Over the four-year loan term, you would pay a total of $2,670 in interest. If, however, your credit score falls in the 660-689 range, your loan might come with an interest rate of 8.844%. You would pay $496 a month, and $3,819 in interest over the 48 months. In other words, this lower score would cost you an additional $1,149, or $23.94 a month.

Nobody wants to throw away their hard-earned money. But that is exactly what you’re doing if you don’t do your best to maintain a high credit score.

Federal and state grants are the largest sources of direct aid for students. The great advantage of grants, as opposed to student loans, is that you don’t have to pay them back – basically, they’re free money. With the cost of higher education going up every year, you should find out as soon as possible whether you can qualify for a federal or state grant.

Student grants are normally distributed on a needs basis. In most cases there is only a certain amount available per year, so you have to apply early to avoid missing out even if you qualify. There are four major types of grants available to students:

Federal Pell grants: This is the largest grant program by a long way. Pell grants range from a few hundred to many thousands of dollars, and are awarded to needy students according to each college’s criteria. Every college in the program gets a predetermined sum of Pell money every year and gives out grants until the funds are depleted.

If you’re getting a Pell grant and are a math, science or social science major, you can also apply for an Academic Competitiveness Grant. If accepted, you’ll receive up to $750 in the first year of your academic program and $1,300 in the second year. For math and science majors, there’s also the National SMART Grant, which can be worth up to $4,000 a year in the third and fourth years of your course.

Federal Supplemental Education Opportunity grants: Students in extreme financial hardship can apply for these grants through their colleges’ financial aid offices. Awards range from $100 to $4,000.

State grants: Each state has its own aid programs for university-level students. While these are usually based on income, there are some that are set up to promote study in specific fields. For example, education students in California get a break of up to $19,000 on their loans if they agree to work in a low-income area and teach subjects that are short of teachers. In Ohio, meanwhile, grants are only available to you if your family’s income is below $75,000.

Take a look at the website for your state’s student aid or higher education commission to see what kind of grants and other financial aid might be available to you. You can usually apply for aid via these sites too.

Institutional grants: These are funded by the schools themselves, and are given to certain students to top up the federal and state money they receive. In other instances, colleges use institutional grants to attract specific students who would bring particular qualities to the school, for example outstanding academic or sporting achievements.

You don’t normally need to apply for these grants. However, if your skills or academic record are likely to be attractive to certain colleges, you could try to snag a nice financial aid package by applying there rather than competing to be accepted by schools that don’t really need what you have to offer.

It’s all the rage to be environment-conscious these days. But did you know that it can often be cheaper to be green too? All good things begin at home, as they say, so why not spend a bit of money now to make a few environmentally-friendly improvements to your house. You’ll be reaping the benefits of your one-time outlays for many years to come.

We bought a charming old house nine years ago. Unfortunately it had a lot of features that were not so charming, like old appliances, poor insulation and drafty doors and windows. We were shocked to find that our first power bill was more than twice what we had been paying in our old home, which was around the same size. So we decided to start plugging the money leak by making our new home more energy-efficient. Since we didn’t have a lot of cash to spend, we made these green improvements slowly, and did all the work ourselves.

Weather stripping: It was really quick and simple to put insulation strips around the windows and doors to keep the warm or cool air inside the house, depending on the season. It only cost us around $30.

Compact fluorescent lights: We changed all our light bulbs to CFLs, which use a quarter of the power of traditional lights. As we managed to get several light bulbs free from our power provider, and from Earth Day promotions, we only had to spend $60.

Power strips: We spent around $100 on power strips – the surge protection kind for our computers, and regular ones for all our other electronics. Now we can shut everything down completely and don’t have to pay for the 24/7 power drain.

Blinds: The cheap plastic blinds that came with the house did nothing to block the hot sunlight in the summer and keep the heat from escaping in the colder months. So we replaced them with thick room darkening blinds with wide slats, which cost us around $450 for the whole house.

Window film: Our living room faces west and has huge windows that were letting in too much heat and light. We spent $40 to cover them with film, and can now enjoy the room without feeling overheated or using the AC.

Water heater: By installing a wall switch in the hallway, we can now turn the water heater on and off as required. We switch it on in the mornings before showering, then off again before we leave for work. In the evenings, we turn it on again to shower and do dishes and laundry. It only set us back $55 as my brother-in-law very kindly did the work for free.

New appliances: As each of our appliances has come to the end of its useful life, we’ve replaced it with the most energy-efficient model we could find. This has cost us more than $3,000 over several years, but it’s money we would have spent anyway.

Moving is stressful enough without all the expense that usually goes with it. When you’re on a tight budget, every penny counts. But as long as you don’t have a huge house full of stuff and you’re prepared to spend a bit of time, there are quite a few ways to cut your costs down to the bone.

You don’t need to buy boxes: Go to your local liquor stores and drugstores and ask if you can take some empty boxes off their hands. It’s better to get your empty packing cartons here than from the supermarket, where they can often be dirty and torn. You should also look on Freecycle and the free section of Craigslist for people who are giving away boxes.

Hold the bubble wrap: Don’t spend your cash on fancy packing materials. Get creative with towels, blankets, sheets and comforters for larger pieces. Use your t-shirts, sweaters, socks, pillowcases and hand towels to wrap and cushion small breakable items. Start saving newspapers ahead of time to use for wrapping dishes and fragile ornaments – though you might have to wash them before you eat as the ink can smudge. You’ll need a few rolls of packing tape, however, so check out local online sites for people who have moved recently and have stuff left over.

Have a clear-out: If you can get rid of some of your stuff, you won’t have to move it, which will save you money – and you might actually make some cash from selling your old treasures. Advertize online or in your local paper if you’ve got furniture or collectibles to offload, or hold a yard sale if you have a lot of different things. If you have items left over that you don’t want to move, donate them to charity and claim a tax write-off.

Avoid storage units: If you can’t or don’t want to move it, get rid of it – don’t spend valuable dollars every month on a storage unit if you’re not going to even see the stuff for ages.

Get a little help from your friends: This is where you can save a lot of money, and have some fun too. And don’t forget to give back whenever they need a hand. Get as many of your buddies together as possible, and make sure each one knows what they need to do. Some people are great at packing up fragile china, while others are invaluable when there’s heavy furniture to be shifted. You might want some people to come before the big move to help you pack up all the small things, and others on the day itself. However you organize it, make sure you have food and drinks for everyone – pizza and beer is always a great standby. And invite them all to your housewarming party once you’re settled in.

Borrow a truck: We all know someone who has a truck. If you’re not moving too far away or have too much stuff, ask to borrow a truck or van to save the cost of renting one.