The purpose of Money Talk is to improve readers' financial capability with research-based personal finance information.
Thursday, February 21, 2019
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:
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.
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.
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.
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.
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.
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.