Make a commitment to save next year.
This article is part of an M-Network group writing project, the 12 Days of Christmas - Personal Finance Style. As the project moves through it’s days, I will be adding each article at the bottom of this post. We’ll be posting from December 1st to December 12th.
If you’ve read personal finance blogs, followed Dave Ramsey, or spent any time whatsoever in the world of personal finance, you know the number one rule is to save an emergency fund. However, when you’re living paycheck to paycheck, the idea of setting any money aside can seem daunting.
Here are 7 strategies anyone can use to start saving money. If you implement one or more of these strategies now, you may be surprised at how much money you’ve saved by next December.
1. Pay Yourself First
To make any headway in saving money, you need to make saving a priority. Most people pay their bills and use the leftover money (if there is any) for savings. Instead, treat savings like another bill. Pay yourself before you pay others, even if it’s only $20 a paycheck.
2. Make it Automatic
It’s easier to save if you don’t even see the money before it goes into savings. Set up an automatic transfer from your checking account to your savings account. By automating your savings, you are assured that money is headed into your savings account every month. No more forgetting. No more telling yourself you can’t afford it. Your savings account grows, and you don’t even have to put any effort into it!
3. Save Your Change
In order to boost your savings, make a commitment not to spend change. When you’re at the store, and your total comes to 19.04, give the cashier a $20 bill. Take the 94 cents in change home and add it to your change jar. Periodically bring your change to the bank. You’ll be amazed at how fast your savings grows!
4. Round Up
The flip side of not spending change is to round up every time you enter a check in your checkbook. If you write a check for $19.50, enter it in your checkbook as $20. Your checkbook balance will reflect a lower amount than what you actually have in the bank. At the end of the month when you reconcile your checking account, add up all the “extra” money and transfer it to your savings account.
5. Give Up a Small Luxury
Are you addicted to Starbucks in the morning? How about renting videos every Friday night? Make a commitment to give up one small luxury every week and pay your savings account instead. You won’t miss the Starbucks (and neither will your waistline), and your bank account will grow!
6. Make it From Scratch
Whether it’s baking cookies or making laundry detergent, the homemade alternative is often cheaper than it’s store bought counterpart. Vow to make one thing from scratch every week, and put the money you save by passing on convenience into your savings account.
7. Clip Coupons
Start using coupons. It’s only $1 here and 35 cents there, but every little bit adds up. When you go to the grocery store, hand the cashier your coupons after she’s given you your total. Write your check for the full amount, before the coupons are deducted. When the cashier gives you your change, head straight to the bank (many stores have banks right on the premises!) and deposit your change.
Whatever method you use, make a commitment to start saving in 2009. Even if you can’t save a lot, you’ll still be better off in a year than you would be if you don’t save at all!
Do you have any strategies to make saving money a priority in your life?
And here are the rest of the 12 Days of Christmas - Personal Finance Style from the M-Network
Day 1 - The First Rule Of Personal Finance at Paid Twice
Day 2 - Two Financial Goals - Less Debt, More Income at Cash Money Life
Day 3 - 3 New Year’s Worksheets at Mrs. Micah
Day 4 - 4 ways to be better prepared for Christmas next year at Gather Little By Little
Day 5 - 5 Golden Rules To Follow During The Holiday Season at My Two Dollars
Day 6 - 6 Ways to Give at Moolanomy
Day 7 - 7 Savings Strategies at Being Frugal
Day 8 - 8 Simple Snowflakes at Paid Twice
Day 9 - 9 Year-End Money Moves at Moolanomy
Day 10 - 10 Personal Finance Essentials at Cash Money Life
Day 11 - 11 Ways to Decorate More Frugally at Plonkee Money
Day 12 - at Being Frugal
Photo by annia316.
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December 7th, 2008 at 7:26 am
I’ve implemented quite a few of the strategies you talked about in this post, and then I also recently implemented the Money Jar system from Gail Vaz-Oxlade. I used the interactive budget on her website to determine my weekly & monthly budget, and have been trying to stick to it. It makes me more accountable on how I spend my money. Plus the money I don’t end up spending in any given week goes into a debt reduction savings account that I then gets dumped back into my debt at the end of the month. I make earn some interest, & feel good about making a bigger lump sum payment on the debt.
December 7th, 2008 at 7:33 am
Lynnae, great tips and post!
Saving money and having that emergency fund is so important to your long term financial health.
I’d like to add some thoughts if I may.
Points 3 and 4 are great ways to save with out really noticing you are saving. It’s easy to save a dollar here or there and not notice. Many banks even will help with this. Wachovia and Bank of America both offer services that will do this automatically as you use your check card. BofA does the round up concept by rounding up your check card purchase and putting the change directly in your savings account. Wachovia is similar but it puts a $1.00 into savings every time you swipe your card.
Point 7 is also a very easy way to save money with little time invested. Clip coupons from your local paper, look online when making big purchases (a lot of time it cheaper than in the store and often times you can get free shipping). This can also save you time and gas.
There are also a lot of coupons, rebates, deals, sweepstakes and discount codes to be found all over the internet. There are many sites that collect all these wonderful savings and put them in one place to save you time in locating these deals.
My favorite site (but I’m biased as it is my site) is:
http://www.retailsavingsonline.com
So other sites to check out to see which you like best are:
http://www.retailmenot.com
http://www.couponcabin.com
Invest just 30 minutes a week and your readers will be amazed how quickly the savings add up. I have a family of 6 and my grocery bill has gone down 25%, this really adds up.
December 7th, 2008 at 10:47 am
Lynnae, great article I’m trying to improve on saving.
Zack, I been thinking of joining BOA’s keep the change program to help with my saving.
December 7th, 2008 at 1:55 pm
Thanks Lynnae, I haven’t tried rounding up but will be now. Great post
December 7th, 2008 at 3:59 pm
Great ideas. I use some of those myself, namely clipping coupons, cooking from scratch and automated savings. It makes a big difference.
December 7th, 2008 at 6:23 pm
i do the round up method even though i don’t use a checkbook. i use microsoft money to do my balancing, so every week or so i go through and round each transaction up to the nearest dollar and transfer that amount to my savings. i’ve been doing this for a long time! it adds up quickly.
December 7th, 2008 at 11:33 pm
Great post! I really like the idea of rounding up when doing a checkbook and making things automatic.
I don’t agree with the clipping coupons advice because I think coupons take more time than they’re worth. It doesn’t seem like a huge mental drain to look through coupons, but spending a few minutes on them every day seems like a lot. I do look for deals on big purchases, but I don’t look through the heaps of coupons that come through the mail.
December 8th, 2008 at 3:43 am
Great strategies, Lynnae! We make it a point to pay ourselves first, and last. We set aside savings at the first of the month, and then try to “best” our budget and put any additional savings from our efforts in savings at the end of the month as well.
December 8th, 2008 at 10:44 am
Saving money when you are on a tight budget is so difficult and stressful to even think about, but you offer some fool proof easy ways that will add up. I especially like the ones to save change, and rounding up teh dollar amount in your check book log. I know I can do that and Iwill. Thanks for the tips. Im looking forward to using your tips and helping myself get ahead!
December 8th, 2008 at 3:07 pm
Thanks for the great advice.
I’m going to start numbers 2, 3, and 7 right now!
Thanks for the encouragement.
December 8th, 2008 at 5:13 pm
This got me to think what I will have saved if I stop renting a movie at the Red box every Friday. I rented from Red Box, only costs 1.08$ for 1 day. It is much cheaper than BlockBuster which can cost around 4$ for seven day. The catch is you have to remember to return if before 9 pm the next day. One month I would spend more than 4$ for entertaining. Should I stop renting to save some money or should I willing to spend 4$ to buy some relaxation? After one year, I would have saved 50$. But by doing this, am I being cheap or being frugal?
December 9th, 2008 at 10:46 am
Great tips, here is how my immigrant parents do it:
http://www.scordo.com/blog/200.....mmigr.html
Vince Scordo
December 9th, 2008 at 11:38 am
cwhat an excellent article. I think that your NO1 point is definately in the right place. Each month our priorities are tithing to our church which is usually 10% of our income, then ensuring that we put money into savings and everything else follows. It’s a good discipline to follow to prioritise your savings and it just takes a little time before it becomes a natural response.
December 11th, 2008 at 10:33 am
I like your idea of the change jar.
I actually went out and bought a coin sorter which is now my new change jar.
The money is instantly ready to be taken to the bank, once the change slots are filled.
December 11th, 2008 at 8:43 pm
I recently came across your blog and have been reading along. I thought I would leave my first comment. I don’t know what to say except that I have enjoyed reading. Nice blog. I will keep visiting this blog very often.
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