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Savings Guide 2006

Start saving

  Sage advice on starting and maintaining a savings strategy.
11 ways to jump-start your savings
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7. Cut your overhead. This the "double latte factor," Bach says. "Almost every bill you have, you can get it lowered."  Here's how: Think of certain monthly bills as fixed expenses -- phone, cable, cellular bill, Internet service, etc. But they're not as immutable as you think. Go through each one and find the fat. "The average person pays $80 for cable when you can get a cable package available for $19.95," Bach says. "See if you can cut back or get a better deal." Are you using all of your cell minutes? If not, how about a cheaper plan? On long distance, do you need the plan you're using or would a cheaper version (or one with another carrier) net you a nice savings? Carrying a credit card balance? Call to find out if you can get the interest rate lowered, then tally up the money you've saved and arrange for an automatic deposit to your savings account of the same amount. For one couple Bach worked with, the answer was car pooling. The wife was a teacher, so finding a car-pool partner on the same work schedule was possible. "Instead of filling up the car every week, they're filling it up every two weeks," says Bach. As a result, there is an extra $50 to $100 every month going into their savings account.

8. Tax yourself. Every time you buy a nonessential, put 10 percent of the purchase price in an envelope, says Godfrey. At the end of the month, the contents go into savings. "It makes your purchases more expensive, but at least you're putting some money in the right place," she says.

9. Make saving a family priority. Get kids in the habit of saving, too. One good way is to make it a rule that one-third of all income -- whether it's allowance, eanings or gifts from grandparents -- goes immediately into savings, says Godfrey. Another of her favorites: Add some sort of matching component to the child's savings efforts. But no more than dollar for dollar, she says. "Because if you make the match too generous, it gives the impression that saving is too easy."

10. Automate as much as you can. Sit down in the beginning and determine just how much you want to put away every month. Once you've cut back on bills and expenses, have that money automatically deducted from your paycheck or arrange for an automatic draft from your checking account into your savings. That way, you have a baseline amount you're racking up every month without even thinking about it. And more important, if you don't see the money, you're less likely to spend it. Says Bach, "Save it automatically and leave it there."

11. Do something regularly to remind yourself why you're saving. Whether it's a bulletin board with photos of your dream house or a "new car smell" air freshener hanging from the rear view mirror, put your goal front and center in your life. "There is no silver bullet, no little trick," says Ramsey. It's a matter of changing your focus, he says. "It has to become an emotional priority."

Dana Dratch is a freelance writer based in Atlanta.

Create a news alert for "savings" -- Posted: Oct. 1, 2006
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