Tightening the belt
Suggestions for ways to save money
January 29, 2009
The tougher economic times are causing many people to tighten their belts and think harder about how they spend their money. Many people don’t have enough money saved for an emergency fund should they get ill for several weeks or lose their jobs. Financial planners suggest having a cushion of three to six months’ income saved for an emergency. With dire predictions for economy woes continuing in the future, here are suggestions for ways to build a savings buffer to protect yourself and your family.
1. Start by saving for one month’s expenses Each paycheck, put 10% of your take-home pay into an interest-bearing savings account. Or buy a safe and create a buffer stash for emergencies. Plan to have at least one month’s worth of expenses saved by the end of the year. If saving 10% isn’t a hardship to the budget, consider upping the % to an amount that you can afford to stash. Put yourself on a No Frills monthly budget that covers bills and puts disposable income into some sort of a savings plan.
2. Cut back on expenses Scrutinize your purchases mercilessly. Clip coupons and shop for items on sale. If something you use a lot of is on sale at a great price, stock up a couple extra for the future and store it in your cupboards for when you run out. Does the kid really need that thing you just put in your cart? If you can save $150/month on your purchases, you’ll build up a cushion of $1800 by the end of the year.
3. Carpool and consolidate trips into town This will save money spent on gas and force you to plan more and be more efficient on your shopping trips.
4. Bike If you live in a place where you can easily and safely bike to places, consider biking more, including for your store run. You’ll save gas and won’t be able to carry as much, reducing the temptation to pick up extra stuff.
5. Become a shopping critic Hate standing in line in the grocery store? Make a game out of it by scrutinizing the carts in line in front of you and considering other shopper’s purchases. It is easier to be more critical of other people’s frivolous expenditures than our own. Why did they buy THAT? They could have saved money choosing a generic brand instead of a brand name. If you can, apply that scrutiny to your own cart and resist the temptation to put in unplanned extras not on your shopping list. Pay attention to how much you "didn’t spend" on each shopping trip so you become aware of how much impulse buying you do of little things that can add up to $10-$20-$30 per store trip.
6. Examine what and how you eat Eating out a lot, buying pre-packaged food, and sacrificing nutrition for quick-fix junk food all cost you more money for your food bill. Chips, sodas, dessert snacks, candy, sugar cereals & bakery goods contribute to the sugar/salt over-eating most Americans are guilty of. Consider making more healthful food choices for your diet. Junk food is expensive and has little nutritional food value for the price you pay.
7. Smoke, chew or drink? Do the math on how much money that costs per month out of your family budget. Not only are you spending money on a non-essential "comfort habit", you’re willingly paying money to harm your own health.
8. Create a "Mad Money" fund Saving all the time isn’t a lot of fun and many people use shopping as part recreation rather than pure necessity buying. If you put a little something away into a mad money fund that you give yourself permission to dip into when the urge for recreational shopping hits, you’re less likely to buy something that totally breaks the budget when you can’t resist the urge to treat yourself to a shopping binge.
9. Make your home more energy efficient Seal up the cracks around your windows and doors and you’ll be amazed how much that helps to make your home warmer, saving on your heating costs. Put on a sweater before you turn up the heat. Turn off lights you don’t need.
10. Reduce your credit card debt You can save from getting hit with the big late charges by faithfully paying your credit card bill the day it comes in and mailing your payment back out the next day.
|
