Seven steps to savings -- and love
By Dani Arthur • Bankrate.com

An unexpected compliment from your Valentine or a bouquet of flowers for no reason is a wonderful ego boost, and puts a smile on your face.

Money is a lot like love; it's the little day-to-day things we do that make a difference. But if those day-to-day things include spontaneous trips to the Golden Arches or impulse purchases, they can drain your pockets.

Like love, it's those little things that add up.

Everyone would rather spend money on a romantic getaway than on credit card interest, but you won't have a chance to fly to Fiji unless you start saving.

Check out these simple, everyday solutions for saving, so you can take that big vacation or sneak away for a romantic getaway!

1. Make a spending plan and save!
If you always skid into your next paycheck, you'll be left weeks, months, or years short of your financial goals. Get organized, and develop a spending plan. Keep it simple -- track money earned and spent. Create two charts: one for your income, the second for your expenses. Divide expenses into two categories: fixed expenses, such as mortgage, rent, or car payment; and flexible expenses, such as utility bills, groceries, and gas.

For one month, record your income and all your expenses, cash and credit -- yes, even those pocket-change coffee and doughnut runs! At month's end, tally up what you spent your money on and compare it to your income. Surprised? Now economize your flexible spending.

For guidance, check out, How to create a budget. Plus Bankrate's budget worksheet will help get you going.

2. Cut banking costs
Balance your checkbook. Sounds simple, but you'd be surprised how few of us really do. By keeping up with your checking account you save on overdraft fees. Go for a no-frills, free checking account. You'll save on monthly service charges and those pesky per-item service charges.

Know your bank's check-processing order and how long your bank holds your deposit. Consider having paychecks directly deposited into your account for faster access.

ATMs are convenient, but can be costly. Make it a habit to only use your bank's ATMs. You'll avoid paying two surcharge fees to your bank and the other bank. Get extra cash at the grocery store; most of the grocery store point-of-sale terminals are free.

Other ways to save include switching to a bank with a larger ATM network, withdrawing larger amounts to maximize ATM usage, and using a teller.

3. Slash credit card costs
An over-swiped credit card drastically reduces savings. Most of us revolve credit card debt and fritter away hundreds and even thousands of dollars to interest and fees every year. Hey, you could probably sneak away to Bali for a week on interest charges alone!

The smartest plan is to pay off the balance each month. If you can't, transfer your balances from high-interest cards to a low-interest rate credit card. Then, get rid of the debt quicker by making the same payment as before, or be very disciplined and double the minimum. Avoid those $39-and-growing-fees by paying on time and not exceeding your limit.

If you've had a year of on-time payments, try negotiating better terms with your credit card issuer.

Bring your spending plan into action: Determine how much you can pay monthly for credit card payments. Keep your receipts, and don't spend more than your allocated amount.

If you own your home, consider a home equity loan to consolidate credit card balances. Home equity lines and loans offer lower interest rates and are usually tax deductible.

4. Save on day-to-day expenses
Sometimes mom really does know better. You can save hundreds of dollars a year just by following her shopping advice -- comparison shop, wait for sales, use shopping lists, redeem rebates, and save those coupons! Bankrate's Laura Shanahan offers a resource of coupon-clipping advice. She shaves $1,200 off her annual grocery bill alone.

Do you 'crisis cook?' You know, at 4:30 p.m. you decide on dinner and then stop at the store on the way home from work and pick up all the ingredients. A little planning ahead can drastically reduce your grocery bill. Plan a weekly menu before the weekly shopping trip.

Want to save time and money? Try cooking all your dinners one day a month.

Comparison-shopping on the Internet can land great savings. Many department stores have online clearance stores worth checking out. And don't overlook quality consignment shops.

While entertainment is important, be creative. Instead of the movies, try a family outing that costs little to nothing, such as visiting a museum, a picnic in the park or camping. Pick up a video at the library rather than renting one. Limit eating out, and try brown bag lunches.

5. Save on the big stuff
Take advantage of the drop in interest rates. Consider refinancing your home, your personal loans, or even your car. On a mortgage alone, you could save thousands.

Don't buy more insurance than you need. Review your insurance policies for duplications, and consider raising deductibles. Ask whether you qualify for any discounts. Be sure to submit all your medical and dental claims.

Analyze your spending on utilities. You can save money on electricity by using energy efficient appliances-read the energy guide labels. Call the phone company and see if you can negotiate a more economical package that matches your needs. Use the competition in the marketplace to your advantage.

6. Add income -- how about moonlighting?
Working a second job increases income, builds credentials, reduces debt more quickly, and helps reach savings goals faster.

Keep moonlighting successful by sticking with something you already know and enjoy doing.

7. Can you save a buck a day?
Bank on the old adage "a penny saved is a penny earned." Each evening put your pocket change in a jar. Aim for a minimum of a $1 a day. By next Valentine's Day, you will have $360 if you just keep the cash in your jar. Try investing it in a certificate of deposit or an interest-bearing money market and watch it grow!

Slash your everyday expenses and put the money saved into the jar -- think one less specialty coffee, soft drink, and candy bar a week. Wash your own car, mow your own yard. Put the savings into the jar. Brown bag your lunch, and pay yourself the savings. Work up to saving $100 a month, and that pocket change could earn $1,282 in interest alone at 2 percent for 10 years. That's a savings of $13,382. Not bad for money you'll hardly miss!

Oh, and kisses are free!

-- Updated: Jan. 27, 2005