08 July 2015
Painless Ways to Start Saving

Maybe you’ve tried everything to build up an emergency nest egg to draw on in times of…well, an emergency, but the pathetic balance in your money market account couldn’t pay for a tank of gas if you were running on empty.

For some, saving comes easily. For others, we overspend even though we know we’re only hurting ourselves. However, whether you save every penny or spend like there’s no tomorrow, anybody can build up a pretty decent emergency fund.

Here are some simple ways to save money even if your account balance is lower than your age.  

Ignore raises or bonuses. Right now, you’re getting by on a certain take-home salary. The bills are paid, there’s food in the fridge – maybe you’re just scrimping by, but you are surviving each week.

Then, you get a $1,000 bonus because you beat the monthly quota numbers. You could use that bonus to buy a flat screen TV, but the TV you have has been just fine for the past few years.

Instead, plow that bonus, or an annual raise, into a money market account at your local bank. Pretend you never even got it. You’ll still pay the bills the way you do today, but that bonus or annual raise is in the bank in case of an emergency.

Keep the change. When we get a few coins back in change, we often toss them into the “Take a penny, leave a penny” jar by the checkout register. Or we put them into purse or pocket to spend somewhere else. Start the habit of keeping those coins, and emptying coins from purses and pockets every night when you get home. Toss all coins into an emergency fund jar.

You’ll be amazed at how those little contributions add up in a short time and, when deposited into your emergency fund, you’re painlessly building a safety net.

Quit smoking. Talk about a no-brainer. Cigarettes are not only bad for your health, they’re bad for your emergency fund. Do the math. How much do you spend on tobacco products each year? If you’re a regular smoker, it could add up to thousands of bucks a year – and you’re harming your health in the process.

See you doctor about meds that curb the nicotine craving. You may have a small co-pay, but in the long run, it will pay for itself many times over. Watch your emergency fund grow as an added incentive to kick the habit, no ifs, ands, or butts!

Leave your credit cards at home. Carry one card in case you have car trouble, but keep that stack of plastic at home to avoid the temptation to buy something you can’t afford. Also, follow this simple credit card rule: if what you’re buying will be gone before your credit card statement even arrives, don’t put it on your credit card. Use credit cards for necessary big purchases that can be paid off over several months without the sting of too much debt at one time.

Ask your employer to increase 401(k) contributions. It’s a lot easier to build a brighter future when you don’t even see the money. Self-discipline is self-imposed when you ask the payroll department to max out your long-term savings contributions by deducting them from each paycheck. It’s painless, because you never even see the money that’s now deposited into a long-term savings instrument.

Lower routine banking expenses. Many banks give you a break on fees and expenses when you keep a certain amount in the bank. Others offer low-cost check payment options if you only write a few checks a month. Use online banking with automated payments to simplify money management and avoid paying expensive late fees.

Set savings goals. One trick is to save one dollar for every week of the year. In week 1, you save one buck; week 2 you save two bucks, until the final week of the year you put away $52, gradually working from no savings to regular savings. At the end of the year, assuming no unforeseen circumstances, you’ll have $1,378 in an emergency or retirement fund.

Even better, you’ve developed the savings habit. Having money in the bank is a sure-fire cure for sleepless nights worrying about how to pay the bills.

Saving for the future is hard because it seems so far away. It’s not. The future starts today. It’s time to start saving for a brighter tomorrow.

 

The information provided is presented for general informational purposes only and does not constitute tax, legal or business advice.

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