Six Successful Ways to Save Money

The last week in February every year is designated as America Saves Week. Like weight loss (dieting), saving money is hard to start, even harder to maintain, and requires patience and discipline. When you achieve your financial goals, however, the results are so worth it. Below are six time-tested ways to stash more cash:

 

¨     Pay Yourself First- Treat savings like an important household bill (e.g., loan payment or rent). Set aside a part of each paycheck, even if it is only a small amount, and leave it there. If possible, arrange to have money transferred to savings and investment accounts automatically.

 

¨     Collect Coins- Put loose change into a can or jar. When the container is full, deposit the money into a savings account. Set aside $1 a day, plus loose change, and you should have about $50 a month, or $600 a year, saved. Save $2 a day, plus loose change, and you should have about $1,000.

 

¨     Complete a Savings Challenge- Pick a Challenge that matches your time frame and savings goal such as the 30 Day $100 Savings Challenge or the 50 Week $2,500 Savings Challenge. Savings challenges gradually ramp up savings deposits over time and provide motivation and structure.

 

¨     Continue to Pay a Loan or Bill- Make payments to savings or investment accounts with money that is freed up when loan payments end or an expense, such as child care, ends. The rationale behind this savings method is that you are already accustomed to the monthly payment so “redirecting” it will not pinch your cash flow.

 

¨     Break Costly Habits- Track your spending for a month or two and pick a few places where spending can be cut back or cut out to “find” money to save. For example, brown-bagging lunch two or three days per week could save hundreds of dollars over the course of a year.

 

¨     Bank a Windfall- Save all or part of large, infrequent expected or unexpected sums of money. Examples of common financial windfalls include tax refunds, inheritances, settlements, awards and prizes, retroactive pay increases, and year-end bonuses at work.