Strategies For Beginning Savers – Guest Post
It’s easy to talk about saving, but actually implementing a savings plan can be much more challenging. Saving money is a means of preparing for both expected and unexpected expenses, but it can be challenging to decide how to go about saving. Goal setting is crucial, but you also need to have discipline and look for savings in your everyday life.
Many people are overwhelmed by the idea of needing to save large sums of money for large purchases, but easily spend small sums with little thought. Those small sums, however, are the beginnings of larger savings. Putting aside a little bit of money at a time is time-tested and nearly painless approach to building an emergency fund or a nest egg for any eventuality.
Look at Your Daily Spending Habits
In everyday life, it’s easy to spend several dollars per day on non-essential products and services. Coffee, snacks, and other food products seem innocent enough as expenses go, but really can undermine a healthy savings plan. Those few dollars here and there can mount up to hundreds over the course of a month, and thousands in a year. It isn’t essential to cut out all luxuries of this sort, but it is possible to scale back, or to substitute. If you are a caffeine-junkie, then try ordering a smaller size rather than giving up your daily latte entirely. If you buy lunch every day, then try bringing leftovers from home a couple of times per week. These types of little adjustments will add up to savings fast.
Look at Your Occasional Spending Habits
Studying sales circulars for grocery stores and retailers lets you shop strategically, meaning you make purchases in conjunction with discounts, rather than simply buying at will. There are also certain times of year when almost every store has sales. Black Friday, Cyber Monday and Labor Day Weekend are all major shopping periods when you will find great savings.
Using coupons in a store or coupon codes online can provides additional savings. Using rewards websites provides the potential for earning money back on purchases. Another benefit is that your dollars will stretch further: by shopping with coupons or during sales, you will be able to buy the things you need and some extras without blowing your budget. Also don’t forget about rebates. Manufacturer and store rebates can lead to big savings, but you often have to fill-out a card or register online to receive them. Take a few minutes as soon as you get home and take care of the rebate request.
Look at Your Recurring Spending
How much do you spend on cable? Or, your cell phone plan? Do you use public transportation to get to work? We tend to forget about these recurring costs, but they are great places to find savings.
Check your cable bill and think about the package that you have. Do you watch enough TV to justify spending $30-$60 dollars on premium channels each month? If you can’t remember that last time you watched HBO or Cinemax, then cut those channels. If there is a movie you really want to see one day, then you can probably see it through On Demand for three or 4 dollars.
Check your cell phone bill and think about how much you talk, text, and use data. If you rarely send text messages, then try using the lowest plan they offer. If you are only using a quarter of your minutes each month, then you can likely save $10-$15 dollars a month by going to a smaller package of minutes. Also think about who you call when you are counting your minutes: most cell phone companies offer free calls to phones on the same network; if you mostly call your spouse or kids, then those calls are not counted against your minutes.
If you regularly use public transportation or use toll roads, then you can save on transportation costs by either buying a monthly card or getting Speed Pass or I Pass. Most public transportation systems give a discount on rides if you buy a monthly pass or add a certain amount of value to the card. If you are doing 2-4 trips per day, then this will add up quickly. If you are a driver, then look at getting a Speed Pass that will automatically deduct tolls from your account and give you a discount for reducing congestion. Many states give you the hardware for free when you sign up, so the only cost is for the tolls. Not only will you spend less on tolls, but you will get to use the faster lanes at toll booths.
How to Make Sure You Save Regularly
It’s essential to do something with your savings, rather than leaving them available in your pocket or checking account for impulse spending.
• Take a little money out your pocket each morning and leave it in an envelope if you are trying to reduce your daily spending. Then deposit that envelope at the bank on every week—it will seem like you have a second payday!
• Make a grocery or shopping list before you go to the store, estimate the amount you will need and then take only a little more than that when you go to the store. That way you can’t splurge, but will still get the things that you planned to purchase. If you come up a little short, then that probably means that you grabbed some things that were not on your list.
• Designate a jar or piggy bank for “random” savings. Random savings are those little amounts of money that you end up with that are not enough to do anything with, but still can contribute to your savings. Think about all the coins you dump out on your end table or your dresser at the end of the day or week. If you add up those coins over a few months, you will see a nice amount of money.
Getting Aggressive About Savings
The best way to save is to never touch or see the money. Many employers offer direct deposit, as well as retirement accounts. You can also leverage automatic transfers offered by your bank.
• Find out if your employer will let you send money to multiple accounts through direct deposit. That way you can send some money to your checking account while also setting some aside in a savings account. If your employer offers a retirement program, then make sure that you are contributing and also that you are maxing out your contribution. There are tax advantages to this as well and you will be able to grow your savings more quickly.
• If you employer doesn’t offer direct deposit or a retirement plan, then you will need to setup an automatic transfer. You can usually do this online at your bank’s website, but you might have to go into a branch and sign some forms. Figure out which days you usually deposit your paychecks and then setup a recurring transfer to savings for 2-3 days after that. This will take a little more work on your part, but it will be worth it when you see how quickly your savings grow.
• A more aggressive means of protecting your savings is to purchase savings bonds. These will appreciate over time and are a very safe investment. The one drawback is that they are not quite as liquid as cash in the bank. You can usually sell them quickly if an emergency arises, but you won’t be able to get at the money immediately like you would with a bank account. If you feel like you need that extra re-enforcement to avoid spending then go for it, but make sure that you understand your financial obligations first.
Start Saving Now! You Will Be Happy You Did
It may seem overwhelming to save aggressively, but small amounts can easily be withheld without uncomfortably crimping your spending habits. Beginning to save strategically is important for young people, and for those who are older, but who have no history of saving. Creating a safety net for unexpected expenses will give you piece of mind and open up options for you as the money grows (home ownership, debt reduction, engagement rings). The important thing is to get started and stick with it.
Bradford Exchange Checks focuses on the selling of personal checks online at deep discounts versus banks. We also believe in helping people save money anyway they can. Buying checks online is one way to do this, but you can also find big savings by carefully managing your spending and understanding how you spend money.