Saving On A Shoestring
According to a study of saving behavior by economists Steven
Venti of Dartmouth and David Wise of Harvard, more than 75% of
respondents said they knew that their savings, specifically for
retirement, were insufficient. Venti and Wise divided the 7,700
households they studied into 10 income groups. The top 10% of
the lowest income group nonetheless had saved more than $150,000
per household. Meanwhile, middle-income folks, on average, had
only $45,000 in assets. These findings are not a surprise as
American's annual saving rate is measly 2% where as in other
countries such as Japan, it is as high as 23% of their income.
This is quite shameful that we find it hard to save. If we
want to live a comfortable retirement and not be dependent on
someone, we must save. I understand it is hard but where there
is a will there is a way. continued below..
Step 1: Make a Resolve
Saving money is a state of mind. Before you can start, you
have to renounce the useless spending -- and stop believing you
actually need all the stuff you've been spending money on.
If you see something worth $50 on sale for $40 that you don't
absolutely require, tell your mind to think that by not buying
that thing you will be saving $40 dollars instead of $10 if
you buy it. So, which one is a good deal. Saving $40 or saving
$10. You will see how easy it gets as you work on your brain
to retrain it for savings.
Step 2: Start Saving
Direct deposit is a saver's best
friend because the money is whisked away into your IRA, 401(k)
or money market account -- and you don't have to do a thing.
Except drop by your payroll department and/or your bank and
fill out the damn forms. Today.
Payroll Deductions: Take smaller number of deductions on
your w-4. You will have a nice chunk of change coming at the
end of the fiscal year that you didn't think you had. Some
people say that it is a free loan to the government. I say it
is better than keeping in bank earning 0.25% or no interest
and be at risk of getting spent of some stupid items that you
don't need
Shop Smart & Eat Smart: Clip coupons and wait for sales on
those items for a double saving. Keep record of how much you
saved and put it in your piggybank. Frozen vegitables are as
crisp and nutritious and fresh ones, so go for cheaper choice
whenever you can. . If you can do three meatless days a week
(without substituting pricey fish), you could save $25 a week,
which equals $100 a month, which equals $1,200 a year! Shun
pricey snacks that are not good for you anyways.
Income Tax Refunds or Gift Checks: Consider these
refunds and gift checks as an opportunity to save.
Store Mail in
rebates and refunds: Always deposit any store
rebates, no matter how small, in a bank. Don't bring it back
to store for other purchases.
Play money games. At the end of the day, clear your pocket
of all the change and put it in a jar. At the end of the month
bring it to the bank and deposit it.
You'll have a nest egg before you miss a nickel.
Haggle for a better price: Don't feel shy about haggling
over prices, fees
and interest rates: airlines, hotels, credit card companies,
auto and appliance salespeople. Chances are you will come up
ahead and save money
Eat out less: If you decide to eat out one time less than a
week than you normally do, it will probably pay for half or
all of your groceries for the week. Pack lunch as much as you
can. Use coffee club at work instead of using the coffee
shops around the corner. I know you love your stroll to the
coffee shop and break away from work, but doing your own thing
at work will mean more money in your pocket. Two less
cappuccinos or lattes from you coffee shop can mean an
extra $400 in your pocket a year.
Raise your insurance deductibles. Reassess the deductibles for
various kinds of insurance. If you can raise them, your
premiums drop.
Get your mortgage costs down: Refinance if you can. You must
however evaluate the costs of refinance and savings before you
jump at it. Also look at the private mortgage insurance (PMI)
you've been paying because you didn't have enough money to
make a 20% down payment. You're protecting the lender, not
you. If the equity in your home is greater than 22%, demand
that your lender cancel it. It's the law. Also, you can pay
ahead on your mortgage. If you can pay an extra $100 per month, you
will save thousands in interest costs over the long haul. You
can also use your year end IRS refund as your extra payment
for the year. Doing so can cut almost 8 years off your 30 year
mortagage.
Toss the catalogs. There is a reason for piles of
catalogues that you receive in the mail. Retailers know
that this is the most insidious form of spending temptation
known to man or woman. Chuck them straight in the trash. oh
well, maybe you can save Victoria's Secret or other swim suit
catalogs.
Balance on Credit Cards and ATM fees : Pay off your
credit cards each month. Never carry a balance. Also, don't pay unnecessary fees
such as ATM fees. Keep an eye on your bank balance before you
write a check. Besides being illegal, you might end up paying
bounced check fees many times as the check is sent back and
forth allowing bank to charge a fee for every trip.
Pay less for
long-distance
and international calls. Evaluate your phone bill and see
how much you're paying per minute. Some dial-around codes or
cheap
calling cards
(one without a surcharge per call) may give you a better rate.
Get a Family Wireless plan: If you must have a wireless or
cellular phone, coordinate with your family to join a family
plan to stay in touch with your parents, brothers and sisters.
Well there are more ways to save but I will let you come up
with those methods as you get more and more interested in
savings.
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