Monday, July 29, 2013

It's time for the monthly Money Matters post. This time its about savings. 

I think each of us knows we should save money. In this economy, you never know what tomorrow may bring. I told you my story in the first Money Matters post. Rebuilding our savings account is still in process but we’re almost there after about 3 years (which is pretty good considering it took twice that amount of time to build it in the first place).  To get there has taken some sacrifice but it has been well worth it. Here’s some of what we did:

Have money come directly out of your paycheck. If money never hits your main checking account, you won’t miss it as much. Select an amount to come out each month and put it in a savings account or investment account. We do this on top of the automatic deduction that goes into my 401(k). Make sure it's one with a good interest rate. I also have a savings account linked to my debit card. Every time I make a purchase using the card, $1 goes into my savings account. You can also designate a lump sum (as low as $5) to transfer into the savings account at the beginning of each month. 

Review your utilities and see what costs you can cut. I made the biggest cuts on our landline. I can’t remember the last time we used it. We’re always on our cells or communicating with other people by text. I wanted to scrap it all together but in the end we decided to keep it for emergencies but push it down to the basics. We don’t even have call waiting. The phone bill went from $150/month to $15/month. For the electric bill, we try to open windows and use fans in the summer (unless it is over 78 degrees). We also signed up for the equal payment plan, which means our bill is the same each month. We know exactly what to expect and if we save with less usage during the year, we get a credit back at the end of the year. We kept our cable package because we’re TV junkies but we’re thinking of changing that with all the new stuff available through Hulu Plus and Netflix.

Bank your coins. I inevitably find loose change in my bags at the change of every season. Ash finds change in the car ashtray and console. We started banking them (putting them in a jar) and cashing them in for bills once the jar is full.

Create a realistic entertainment budget. Cutting entertainment out of our schedule is out of the question. We set a budget for every two week period and keep our date nights within that allotment. It changes from time to time based on what we have planned (higher allotment for a weekend trip to visit friends out of town vs. dinner at a new restaurant in town). We have a cap and give ourselves freedom within that. We treat vacations of a week or more separately and save up for those well in advance. We also find deals wherever we can.

Pick up extra income from your hobbies. We started making jewelry and selling it on Etsy a couple of years ago. We’ve now started doing it on our own as orders come in. We don’t have a high volume of orders right now but have some plans to grow the business. It helps to have a little extra income coming in—no matter how small.

Sell stuff before buying new stuff. We have some ideas for redecorating our house and that means getting rid of some things. We donate a lot but for things that are in good condition, we turn to online resources like eBay and Craigslist. Garage sales are also an option if your community allows them.

Invest. You can start with a 401(k) if it’s an option for you. Generally, they are the steadiest and safest way to invest. That’s how I started. Ash has his own business so he doesn’t have that option. Our goal is to carve out a small portion of our savings by the end of the year to do a little more investing using an online tool like eTrade.

Use coupons. They’re available everywhere. If you shop online, sign up e-mails from your favorite stores. They’ll send coupon codes all the time. You can do the same for restaurants, groceries, stores and travel. You can also sign up for discount shopping sites or download apps where you can get great deals for a limited time (Brad’s Deals, One Kings Lane, Open Sky, and Scoutmob for example). Every store has an app these days. Take advantage of all the deals you can!

What do you do to save money? Share your tips in the comments section. 

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