Smart Money: Microsavings
Sometimes I think the saving habit is one of the hardest habits to develop. But that savings account has saved my butt so many times, I just don't understand how people function without one.
I think the trap people fall into is thinking that they don't have "enough" money to develop a regular savings habit. That's kind of delusional thinking because the emergencies aren't going to stop coming just because you don't have the money on hand to deal with them. So when the car breaks or the water heater floods the basement, you are going to reach for the credit card, borrow from relatives, or heaven forbid, resort to the dreaded payday loan. Those are all strategies that just dig you deeper in the hole.
So, how to deal with that pesky problem with finding the money to fund your savings account. The answer is microsavings - lots of tiny changes to generate extra money to save. Here are some ideas for you:
Illegal Tender: This was my Mom's favorite strategy. She would declare certain denominations of money as "Illegal Tender" - usually quarters, but sometimes just nickles or dimes. Then she would sort the extra change out of her wallet every night and put it in a special jar. It added up a lot faster than you would think and she would usually be able to deposit an extra $30-$50 per month to have savings account. There are some banks that will do this for you automatically now. Every time you use your debit card, it rounds the transaction up to the nearest dollar amount and moves the change off to your savings account - sweet!
Extreme Couponing: It takes extra time and dedication, but you can save a lot of money with coupons. The trick is to figure out how much money you actually saved and bank it. Otherwise, it just slips off into the wild blue yonder and you never seem to benefit from it.
Brown Bagging: If you aren't already doing it, you can save money through brown bagging your lunches, or other types of cutbacks. For instance, meatless Mondays, breakfast for dinner, or cutting back on eating out. Again, the important part is to track your savings and funnel that money into the bank.
Garage Sales/Ebay/Craigslist: If you are not having luck with any of these methods, its time to get more intense. Start digging around your house for stuff you can sell for extra money. I've done this for years and I've made thousands and cleared a lot of unwanted stuff out of my house. In fact, I just made $35 from Amazon just this week. I had a gift I'd bought for my granddaughter, but it hadn't arrived in time for Christmas. Rather than return it, I resold it on their website for more than I paid for it (I'd bought it at the sale price & used a $25 gift card), so I made a tidy profit on it. And I was able to print the postage on my printer and mail it right from my porch!
Extra work: There's a ton of ways you can fund your savings account by doing extra work. It doesn't always have to mean a second job, or a heavy-duty commitment like that. You can occasionally babysit or tutor kids, give piano/guitar lessons, do hair, or clean houses, whatever floats your boat. I teach stamp classes twice a month and my husband does odd jobs and lawn mowing for people in the neighborhood.
Direct Sales (party plan businesses): This one comes with a warning. Do NOT get into this if you have a shopping problem. It takes a lot of discipline to make this work properly and not be a liability to your budget. However, if you're smart and disciplined about it, you can make quite a bit of money in these businesses. I have sold Stampin' Up! for seven years and Pampered Chef for one. I don't make a fortune, but it's a nice trickle of extra money, and I get a lot of stuff for free that I would have bought anyway.
The important thing is to get that money into the bank anyway you can and once it's there - forget about it and let it grow.
What are your best ideas for microsavings?
Stop by every Thursday for a fresh dose of Smart Money. If you'd like to see past posts on the subject, click the label at the bottom of this post for a complete list.
.
By TwitterButtons.com
I think the trap people fall into is thinking that they don't have "enough" money to develop a regular savings habit. That's kind of delusional thinking because the emergencies aren't going to stop coming just because you don't have the money on hand to deal with them. So when the car breaks or the water heater floods the basement, you are going to reach for the credit card, borrow from relatives, or heaven forbid, resort to the dreaded payday loan. Those are all strategies that just dig you deeper in the hole.
So, how to deal with that pesky problem with finding the money to fund your savings account. The answer is microsavings - lots of tiny changes to generate extra money to save. Here are some ideas for you:
Illegal Tender: This was my Mom's favorite strategy. She would declare certain denominations of money as "Illegal Tender" - usually quarters, but sometimes just nickles or dimes. Then she would sort the extra change out of her wallet every night and put it in a special jar. It added up a lot faster than you would think and she would usually be able to deposit an extra $30-$50 per month to have savings account. There are some banks that will do this for you automatically now. Every time you use your debit card, it rounds the transaction up to the nearest dollar amount and moves the change off to your savings account - sweet!
Extreme Couponing: It takes extra time and dedication, but you can save a lot of money with coupons. The trick is to figure out how much money you actually saved and bank it. Otherwise, it just slips off into the wild blue yonder and you never seem to benefit from it.
Brown Bagging: If you aren't already doing it, you can save money through brown bagging your lunches, or other types of cutbacks. For instance, meatless Mondays, breakfast for dinner, or cutting back on eating out. Again, the important part is to track your savings and funnel that money into the bank.
Garage Sales/Ebay/Craigslist: If you are not having luck with any of these methods, its time to get more intense. Start digging around your house for stuff you can sell for extra money. I've done this for years and I've made thousands and cleared a lot of unwanted stuff out of my house. In fact, I just made $35 from Amazon just this week. I had a gift I'd bought for my granddaughter, but it hadn't arrived in time for Christmas. Rather than return it, I resold it on their website for more than I paid for it (I'd bought it at the sale price & used a $25 gift card), so I made a tidy profit on it. And I was able to print the postage on my printer and mail it right from my porch!
Extra work: There's a ton of ways you can fund your savings account by doing extra work. It doesn't always have to mean a second job, or a heavy-duty commitment like that. You can occasionally babysit or tutor kids, give piano/guitar lessons, do hair, or clean houses, whatever floats your boat. I teach stamp classes twice a month and my husband does odd jobs and lawn mowing for people in the neighborhood.
Direct Sales (party plan businesses): This one comes with a warning. Do NOT get into this if you have a shopping problem. It takes a lot of discipline to make this work properly and not be a liability to your budget. However, if you're smart and disciplined about it, you can make quite a bit of money in these businesses. I have sold Stampin' Up! for seven years and Pampered Chef for one. I don't make a fortune, but it's a nice trickle of extra money, and I get a lot of stuff for free that I would have bought anyway.
The important thing is to get that money into the bank anyway you can and once it's there - forget about it and let it grow.
What are your best ideas for microsavings?
Stop by every Thursday for a fresh dose of Smart Money. If you'd like to see past posts on the subject, click the label at the bottom of this post for a complete list.
.
By TwitterButtons.com
2 comments:
I love that idea of illegal tender! Your mom instilled good habits in you.
These are some really great tips for saving money! Since I work in Manhattan, I've learned to get really good at meal planning in advance because it can get very expensive to step out for lunch on a whim.
And depositing that money in the bank is great advice to really see that savings grow. I feel as though I justify savings in one area and often use what's left over to treat myself to something else. Ooops :)
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