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Looking for ways to Save Money?

by Gerri on Sunday, January 17th, 2010 | 1 Comment

There are so many ways to save money if you just spend a little bit of time.  It can be overwhelming if you think about it all together, but if you commit yourself to an hour a day or if you have to an hour a week to little by little you can get there.  Obviously two or three will get you there quicker, but you can accomplish a lot in just one hour.  One hour of TV a night, that is all I am asking you to give up to improve your financial situation.

First thing  - automate your savings.  You cannot get yourself out of debt or work towards really accumulating wealth without saving.  Now I can here most say, “But I do not have anything to save when the week is done or the month is done”.  That is the wrong attitude!!  The first bill you must pay is the bill to yourself.  You have probably heard the line “Pay yourself First”.  Do you know what that means?

Pay yourself first means that before you pay your electric bill, your mortgage, your child care expenses, your credit cards and everything else you must put money away first.  Set up a savings account and have money transferred directly into it either from your paycheck or from your checking account. 

How much?  Ideally 10% of your net pay.  If you cannot start with that, start with even $5 or $10 a week and create a schedule for when you will increase it.  In 30 days, ” I will increase it by $2 per week”.  In 60 days, ” I will increase it by $2 per week”.  Continue to work your way up until you are at 10% or more.

Think about when you get a raise.  At first you think, “What am I going to with all this extra money?”  Six months down the road you wonder how you survived without the raise because it is human nature to increase our spending to what is available.  The same is true in reverse.  If you save that $100 or $150 a month, you learn to live on less as easily as you learned to live on the raise increase.  Try it with the $10, then $25, then $50 and keep going up.

Let me tell you my system.  I like banking online for a number of reasons.  First – it is very convenient. I make one transfer out of my checking account every time I get paid.  Second – since it is online it typically takes 2 days to get money back. That means I have to plan.  No impulse spending.  No ATM card so that I cannot decide to pull it out to go out to dinner or purchase that piece of clothing I really do not need.  Third -I found the online banks pay a better interest rate than the local banks or credit unions since they do not have the overhead. Fourth – and this is the real important one, I can set up as many accounts as I want.  There is no minimum per account and I can transfer whatever I want without worrying about a minimum.

I currently have 17 savings accounts.  I do not want to clutter my checking account with that many withdrawals so I do one transfer into one of the savings accounts.  Out of that savings account I then transfer into all the other savings accounts.

How can I have 17 savings accounts?  Think about all the bills that pop up once a year or a couple times a year like your life or car insurance, Christmas or property taxes.  Think about needing a new car or having money for car repairs.  Think about the vacation you want to take.  How about repairs to the house, tuition for classes you or your child want to take, having to fill your oil tank once or twice a year and more.  What about financial dreams you have – starting your own business, retiring early, purchasing new furniture for the house, buying a bigger house, adopting a child or maybe a dream wedding.  What are your financial dreams? 

Some of the accounts I have I put $5 or $10 a paycheck in.  Some accounts I put $100 a paycheck into.  Some are preset.  For example if I know that my life insurance is $600 per year I am going to have to save$50 per month.  If I know that I want $700 to spend on Christmas – presents, extra food, and decorations I know that I have to save $27 dollars every two weeks.  I want new furniture, but right now it is down on my list so I am only contributing $10 a month.

Start with the ones that have to be funded for a certain amount and then figure out what you can allocate to the remainder.  As you get raises, overtime money, gift money or pay off a loan add that portion of that to your savings – at least 10% or 20%.

Why different accounts rather than all one?  If all the money were in one account how would  I know when I have reached the goal for that savings account?  Sure- I could keep track of all those balances on some type of spreadsheet, but why go to all that extra work?  Let someone else keep it separate for me.  And for me personally – I like to be able to tell at a glance what I have for vacation this year so I can start dreaming of where I am going.

Head into the FinancesforEveryday savings links.  There you will find a link to ING Direct – my favorite online bank. 

INGDirect <–Click Here
Head to the FinancesforEveryday special reports – sign up for our email list and you will get a free report called “50 Ways to Save Little Bits of Money”  This is money that can help fund those savings accounts.  Spend an hour a day and work your way through the ones on the list that are appropriate for you.

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One Response to “Looking for ways to Save Money?”

  1. Steven Daniels says:
    July 8, 2010 at 9:24 pm

    Very very very good blog! Looks really nice.

    [Reply]

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