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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

The secret of successful savings borrows from the tale of the tortoise and the hare: slow and steady wins the race.

But while it may be a winning strategy, it's difficult to get motivated when your savings balance is climbing that slowly. One way to keep your head in the game: Sock away some extra -- especially in the beginning -- so you can get enthused watching that balance really climb.

Successful savings
Here are 11 strategies to help you jump-start your savings program:
11 ways to jump-start your savings
1.   Set a clear goal.
2. Use a jar.
3. Buy generic.
4. Do it yourself.
5. Plan a garage sale.
6. Pick up a pen.
7. Cut your overhead.
8. Tax yourself.
9. Make saving a family priority.
10. Automate as much as you can.
11. Do something regularly to remind yourself why you're saving.

1. Set a clear goal. Are you putting money away for a rainy day, a new car or retirement? Break the concept into two categories, says Dave Ramsey, author of "The Total Money Makeover." "Investing is five years or longer. Savings is five years or less." The critical difference: "When you're saving, it's not going to be the power of compounding interest that helps you save," he says. "You're the big thing -- the money you put in." That means you have to have a goal and keep yourself motivated.

2. Use a jar. Put a quart-sized jar in plain view and dump all your change in it every day from purses or pockets. When it's full, take it to the bank or grocery store change machine and put those funds into savings. "You can collect $50 to $100 in no time with this strategy," says Joline Godfrey, author of "Raising Financially Fit Kids." And it's a little less painful than trying to do without something you love."

3. Buy generic. Don't skip buying hair conditioner or that special body wash, but check out the store's version of the same product. Many times the formulas use the same or similar ingredients for prices 25 percent to 60 percent less. Do it for a month, and bank the savings. It's a nice way to pull extra money out of what looked like an empty pocket.

4. Do it yourself. David Bach, author of "The Automatic Millionaire Workbook," calls this your "latte factor." Find something you can live without (or do yourself inexpensively), and put what you would have spent in your savings. Make it a temporary arrangement, just to kick off your savings program.  Knowing you don't have to stick with it forever should make it a little easier. Look at what might be eating your spare dollars. Vending machine sodas and snacks? Morning caffeine fix? Admit you're going to still have the craving, but stock up at a discount store and supply your own drinks or munchies, then put the cash you didn't spend into savings.

5. Plan a garage sale. OK, in this day and age, your "garage" could be on eBay. The point is, if you have goodies you haven't used in a couple of years or more, cut your losses and put them up for sale, then bank the results. Need help getting motivated? "Partner with a friend to get it done," says Godfrey.

6. Pick up a pen. Write down what you spend. "It's the dreaded 'B' word," says Ramsey. Budget. "When you write down where the money is going, it has immense power," he says. Most people fight the money-saving-spending war "down in the trenches," he says. But writing down where you spend your bucks will give you "the 30,000-foot view."

-- Posted: Oct. 1, 2006
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