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7. Kid yourself
"If you cannot save for yourself, open up a savings account in the name of your kids," says Mandell. He reasons this is a great psychological way to stockpile savings when you have been unsuccessful doing it for yourself. "As long as the amount in the account is low enough to not be taxable under the kiddie tax law, it is a great way to save."
One way to avoid the kiddie tax altogether
is to invest in tax-deferred 529 accounts for your children's
future educations. These college-savings plans can be
set up to accept payments automatically from your bank
account, making saving a painless effort. True, there's
a penalty if you tap into these accounts for noneducation
purposes, but in a sense you're saving yourself the
hassle of coming up with the money down the road when
your children matriculate -- and better yet, sparing
them from having to take out onerous college loans.
8. Spend more on your house
No, don't buy a bigger house. Just pay more on your mortgage. "Take out a 15-year mortgage," says Mandell. "This is an absolutely terrific way to trick yourself into saving." Instead of having your savings parked in stocks and bonds, it's parked in your real estate.
"I always recommend getting a shorter
mortgage if you have difficulty putting away money.
When my wife and I bought our first house, we obligated
ourselves to make a payment that used up a very large
part of our income," says Mandell. "We paid
it off over three years. When you're obligated to make
large house payments, you're obligated to save."
Though large principal payments are a great way to create
equity, Mandell does sound a warning: "Whatever
you do, don't open up the other end of the package by
taking out a home equity line of credit, or HELOC, because
that undoes everything!"
9. Bank your bonuses
"When I get a bonus or holiday pay, I act
as though I didn't get it and put the extra in my savings
account along with what I regularly put in," says
Shannon. Stroh agrees with this method. "Human
nature is to spend (a bonus). A lot of consumers get
lured into making purchases with it," he says.
"But you really want to invest it."
10. Celebrate regularly
Keep a running tally of the amount of money you have saved, or paid down in debt, since the beginning of the year. As this figure balloons (or shrinks), it will help inspire you to keep up with your savings plan.
If you can succeed in your job, you probably already have what it takes to save regularly. "Many people (with irregular incomes) tend to be pretty good savers, because it's the only way you can survive in a job like this for very long," says Mandell. "Once you can get your money removed from your direct control, much of the battle is won."
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