Seven steps to savings -- and love
unexpected compliment from your Valentine or a bouquet of flowers
for no reason is a wonderful ego boost, and puts a smile on your
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
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
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
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
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
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