Many
people get into the
habit of saving and investing by following this advice: always pay
yourself or your family first. Many people find it easier to pay
themselves first if they allow their bank to automatically remove money
from their paycheck and deposit it into a savings or investment
account. Likely even better, for tax purposes, is to participate in an
employer sponsored retirement plan such as a 401(k), 403(b), or 457(b).
These plans will typically deduct money from
your paycheck, and reduce the taxes you are paying.
Many employers match some or all of your
contributions.
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Any time
you have
automatic deductions made from your paycheck or bank account, you’ll
increase the chances of being able to stick to your plan and to realize
your goals. Put your savings on auto-pilot. Start paying yourself
first! And, if your company offers to match all or part of your regular
retirement savings - Take The Money! You'll be glad you did when
retirement time rolls around!
Small Savings Add Up to Big Money
How much does a cup of coffee cost you?
Would you believe $465.84? Or more?
If you buy a cup of coffee every day for $1.00 (a good price for a decent cup of coffee, nowadays), that adds up to $365.00 a year. If you saved that $365.00 for just one year, and put it into a savings account or investment that earns 5% a year, it would grow to $465.84 by the end of 5 years, and by the end of 30 years, to $1,577.50.
That’s the power of “compounding.” With compound interest, you earn interest on the money you save and on the interest that money earns. Over time, even a small amount saved can add up to big money.
If you are willing to watch what you spend and look for little ways to save on a regular schedule, you can make money grow. You just did it with one cup of coffee.
If a small cup of coffee can make such a huge difference, start looking at how you could make your money grow if you decided to spend less on other things and save those extra dollars.
If
you buy on impulse, make a rule that you’ll always wait 24 hours to buy
anything. You may lose your desire to buy it after a day. And try
emptying your pockets and wallet of spare change at the end of each
day. You’ll be surprised how quickly those nickels and dimes add up!
If
you are spending all
your income, and never have money to save or invest, you’ll need to
look for ways to cut back on your expenses. When you watch where you
spend your money, you will be surprised how small everyday expenses
that you can do without add up over a year.
You
can save hundreds of dollars a year by shopping at lower-priced
food stores. Convenience stores almost always charge the highest
price. Stock up on bargains - only if you plan to use all you
buy. Clipping coupons can save you a bundle if you watch the sales and
only buy those products you actually use.
You
will spend less on food if you shop with a list, take advantage of
sales, and purchase basic ingredients, rather than pre-packaged or
ready-made foods. Convenience usually costs more. Buy a pound of
carrots for 50 cents or pay 4 times as much for the little precut
carrots.
Save big when you prepare your own meals! Many frugal savers cook up a
big batch of their favorite meals on Sunday and refrigerate or freeze
meal-size portions for later in the week! Eating healthy foods - prepared at home
will save you considerable sums of money.
Save money on your car insurance.
Shop around. Do you own a home? Some savvy homeowners are saving on
their total insurance costs every year buying their home and auto
policies from the same company! Do your homework though, and call
around.
Do
you get tired of high heating bills in the winter and paying a small
fortune to keep your home comfortable during the Summer? You can
realize lower utility bills
with just a few, inexpensive improvements around the house! Easy,
low-cost weatherproofing can start
saving you money every month on your heating and cooling
costs.
Another BIG money saving opportunity
is health care. Healthy people
spend less on health care. Have you been to the Doctor lately? Start
getting in shape and enjoy life more as your fitness level improves!
Consider gifts that encourage saving. Encourage your
children to start saving money early in
life!
