smart spending

5 smart ways to spend and save in 2011

Reduce unneeded expenses, save the savings
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Short-term savings translates to long-term success.

"The power of consistent savings compounded over a long period of time produces a significant sum of money," McBride says.

Consider McBride's simple savings example: Save $50 each month by trimming unnecessary expenses and put that money into a 401(k) or IRA. At 6 percent annual growth, you'll yield more than $33,000 over 25 years. Using Bankrate's spending calculator, saving $50 per month for 25 years at an annual rate of return yields $33,979 in 25 years (before taxes).

Think about your regular spending habits to recognize where you can cut your spending. Can you move to a cell phone plan with fewer minutes? Can you find a more affordable gym membership? Do you need that premium cable TV package?

Even if you struggle to identify opportunities that will dramatically reduce your monthly bills, the small steps can add up to a big difference. Use Bankrate's lunch savings calculator to see how a few dollars each day can spark an impact in the big picture of your finances.




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