Ways to Save
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People often tell me they can’t find the money to save. Some can’t even find the money to get started using the Magic Jars. Hmmm. Let’s start with the second point first.
The money that goes into the jars isn’t “extra” money, so I don’t understand why you’re “looking” for it. It’s the money you always have — always spend — divvied-up so you can stick it in the jars. If you usually spend $100 a week on food (and your new budget says you can afford to) then you stick $100 a week in your food jar. Ditto transportation, which holds your gas and repair money. Clothing and gifts may have nothing in it, as may the “other” jar. And you should put a little something into entertainment. Okay, that’s out of the way.
So the other thing people can’t find money for is savings. Really? Not even $1 a week? I don’t believe you. I think if you put your mind to it, if you really, really want to save, you can. Here are some tips:
1. Get started. I don’t care if you use an envelope, a coffee can or a old jam jar. Pick an amount and stick it in your container every single week. Whether it’s two dollars or ten, the trick is to do it religiously, never count it and don’t spend it. EVER. Under no circumstances. You may have to hide it from everyone else so they aren’t tempted to dip into your stash of cash.
2. Live on your pre-raise income. If you get a cost-of-living increase or a performance raise pretend you didn’t and save the extra money you’re bringing home each pay.
3. Like to hit the fast-food outlets or drive-through windows? Keep a container in your car and every time you pick up a coffee, grab a burger or hoe through a muffin, drop a buck in your bag. This will be your Fast Food Tax. Hey, if you can find the money for the coffee, you can find the money to save too!
4. Just paid off a big bill like your car payment or credit card. Assuming you’re out of the hole, add half the bill amount back into your budget and save the other half. You’re already used to living without that money, so save some.
5. Put away your “savings.” This is one of the things that drives me crazy! People tell me how much they SAVED on sales, using coupons, or just by being a smart shopper and then I say, “So where are those savings?” They look at me with a dazed expression. They laugh and shake their heads. Hey, it’s nothing to laugh about. If you just saved $6 at the grocery store by being a savvy shopper, take that $6 and stick it in your SAVINGS container at home. If you don’t, you’ll just spend it somewhere else and then you won’t have saved a penny.
6. Reward yourself. If you have the discipline to use a credit card the pay off your balance every month, use a card that gives you cash back or a useful reward. My credit card earns me grocery money. And I just cashed in points from another reward program for coupons for the drugstore and a grocery store. That’s over $600 I can stick into my savings.
7. I know lots of people who use a change jar to save for a holiday. Now, I don’t consider this savings since you’re going to spend the money. But if it’s money you’re not going to carry as a balance on your credit card, I’m all for it. If you don’t have an emergency fund, this is a GREAT way to get one started. And if you super-charge your change jar by dropping in a fiver at the end of every week, you won’t believe how fast that money grows.
8. Swap a bad habit for a good one. Love candy? Can’t walk by the coffee shop without dropping $3 for a caffeine boost? Smoke, drink pop or booze, or chew gum? Start giving up your bad habit slowly, and reward yourself with a good one as you do. Go from smoking 20 cigs a day to 15, and drop the 20¢ you didn’t send up in smoke into your GOOD HABIT jar. Walk past the coffee shop just once and you can add another $3 to your GOOD HABIT jar.
9. Cut your communications bill. Here is one area where people routinely overspend: telephone, cell phone, cable, internet. Cut your bill by $10 a month and now you have enough to start a savings plan. Cut it by $30 and you’re three-times smarter.
10. Save your extra pay cheque. Most people set up their budgets to accommodate two or four paychecks a month, depending on their pay schedule. Sometimes you get an extra cheque in the month. Save it.
June 30th, 2008 at 9:47 am
i think people think it’s hard to start saving because they think it has to be a large amount like 50 or 100 or 200 dollars a month, we often forget that we can do smaller amounts.
June 30th, 2008 at 11:56 am
Gail, you give such great advice. I wanted to tell you that in four months we’ve reduced our debt by over $18,000:
http://thewritingmother.blogspot.com/2008/06/nitty-gritty-of-debt.html
We still have a way to go, but we are carrying no high-interest debt now and it feels GREAT! Plus, we have money left over in our jars when it comes time to fill them up again. I feel almost FREE!!
June 30th, 2008 at 12:15 pm
nobody ‘needs’ cable. sorry. but many people treat this as a basic human right and it’s not. it’s tv. no offense gail. love your show but watch it for free online. as for the other 900 channels of mostly useless garbage, i generally don’t feel i get my $50 worth (or more sometimes). so into savings it went.
especially in summer, when we are outside all day anyways. fyi- when you have bell, you can suspend your service for up to 7 months, with a $10/month fee. so if you are leary about cutting tv, you can try it short term, or just cut it in the summer or if you are tight for $ for a short bit, it could be a solution.
we are better off for it.
June 30th, 2008 at 4:52 pm
The RSS feed is working Gail! Thanks
June 30th, 2008 at 4:59 pm
My husband kindly calls me the “savings nazi” lately (like the “soup nazi” on Seinfield). Since getting the high interest savings account I put EVERYTHING over the amount we use day to day in it…. since I am allowed only one withdraw a month, it really makes impulse buying very difficult!
I am with Kirstin, nobody NEEDS cable TV. It is the first thing to go when I am in a pinch. And we have been a cell-phone-free family for 6 years. We got one when I was at-risk pregnant for my hubby to carry around, but we dropped it like a hot potato when the contract was up. I have lamented not being able to get ahold of him a few times since then, but not enough to warrant the $30 or more per month expense. Voicemail, distinct ring, call waiting, call display, and all that have been edited too…. are they REALLY worth it? Not to me. So what if my friend gets a busy signal? She’ll call back!
July 1st, 2008 at 12:03 am
I do wish it were that easy for me. I don’t have cable TV, don’t even *have* a tv, no longer have a car and only take public transit, I only have a cell phone @$45/mo and no landline. My internet is thankfully included in my rent. I struggle to spend less than $200/month on food, prescription (which soon I will be able to take off my expenses thanks to my company health plan), personal items, dog food and household cleaners - most of which I make with vinegar, baking soda, and water. And I never, ever go out to eat or get take out or fast food, nor to I buy anything prepared. The rest of my money goes to my electricity bill which is only $40-50/mo, and then to rent. After my fixed expenses, and $200/mo in debt repayment (consolidated), I have a whopping $12/mo of income left.
I really wish I could just go ahead and throw a few bucks into my ‘good habit jar’, but my *only* way to save is if I find more coupons than I usually do, or get the $20 off my groceries here and there thanks to my rewards card. I’m glad it’s easy enough for some people to save by ‘trimming the fat’, but my budget is near anorexia already. Nothing to trim!
July 1st, 2008 at 4:10 pm
Erin, I’m sorry to hear that your finances are so tight right now.
Is there an option to work a few extra hours at your job or take on a 2nd part time job? Even if it were for a few months to help you get ahead.
What about a roommate?
July 1st, 2008 at 5:30 pm
Erin, have you ever thought to put your cellphone into a prepaid plan? Monthly plan are more expensive and there are more hidden costs involved. My cellphone is on a prepaid plan and I spend about $20 per month.
With my cellphone, I don’t have a landline. And often times, I communicate with my friends from far away online, and that saves me money on long distance calls.
Kristen, I’m with you about cable, too. When I first moved out from my parents, I didn’t subscribe to TV cable because I was low on money. I told myself that I would get a subscription a year later after my financial situation would be improved. Now, it’s 3 years after and I don’t miss a thing! Most of the shows are available on the internet anyway.
Gail, I wish you could do a post about credit checks and perhaps what the banks look for before they approve a loan. Recently, I applied for the PC Mastercard (for grocery money!) but my application was rejected. I called PC Mastercard to find out why. It turned out that PC Mastercard didn’t like the fact that I didn’t have a landline listed as my home phone number! The staff there told me that if my cellphone would be on a monthly plan, there *might* be a bigger chance that my application would be approved, but it couldn’t accept my cellphone on a prepaid plan. I asked if my credit report raised any red flags but the staff there said that my credit score was actually quite good. I was told to apply for a landline before I try applying for the card again. I know that you like your PC Mastercard very much, but you must allow me to share my experience. I couldn’t believe that I was turned down for a new credit card because I’d found a way to save on communication expenses. It was so stupid!
July 1st, 2008 at 6:29 pm
angela- that is the stupidest thing i have ever heard! how did you manage to restrain yourself from jumping through the phone and strangling the other side? whoa!
erin- sounds like you can’t pinch an inch and i hope that things will loosen in the near future.
i’m not sure where you live, but in waterloo ontario area, there is a company called metroline research. they poll public folk for companies that hire them and ask them questions and just look for their opinion. it’s kinda neat. if been before and it’s just 2 hours of chatting, refreshments, parking and $80 in cash at the end. if you have these focus groups, it’s quick easy cash.
July 1st, 2008 at 10:43 pm
Although I finally have a few dollars in the bank, it’s a problem where to put it. Where I live, banks only give 0.25% interest on savings (ok it’s more for rich people with fat wallets) and that doesn’t come close to the rate of inflation.
July 2nd, 2008 at 9:46 am
Ajana - ingdirect.ca will pay 3% and it’s an online bank, available across Canada (and they have a US account). There are others too that are safe, secure, and relatively easy to use, once you accept the concept.
July 2nd, 2008 at 12:59 pm
Ajana:
I’m with Geoff - check out ING. It’s where I put my money for a better return. And it doesn’t matter what your main bank is, you can still save at ING.
July 2nd, 2008 at 2:26 pm
Ajana:
Ditto from me re: ING. I’ve had an account there for a number of years already, but only very recently (two months ago) started saving there again. It’s a painless way to save and you can set up automatic deposits for any amount you like. I’ve just upped my automatic savings a bit, but am hoping to tweak my budget down to accommodate the difference ($25 bi-weekly). I use a bank here in town simply for the convenince of it, have most of my money on Vancouver Island and also use the ING for savings.
July 3rd, 2008 at 12:11 am
Thanks for the information. Alas, there is no ING Direct available here and I’m not eligible for any of the nine countries. (ING here only does insurance.) I have found an offshore institution which offers 7% but in a different currency (could lose out when exchange back), min. deposit of US$25,000 equivalent and min. tenor of 12 months. One to consider though in 18 months - debt free day!
July 3rd, 2008 at 11:49 am
Ajana - I have to ask - where do you live? I’d be concerned about any offshore institutions that may not be part of a federal bank insurance program.
July 4th, 2008 at 5:31 am
Geoff, I live in Hong Kong. The account I mentioned belongs the offshore arm of a leading UK banking group. and deposits are covered by the Depositors’ Compensation Scheme contained in the Banking Business (Compensation of Depositors) Regulations 1991. It’s online banking but in Sterling, Euro or US dollar currencies.
July 7th, 2008 at 3:06 pm
I think that people have difficulty finding the money for the jars because they are not using their money in their bank account for their food, gas, etc. It all goes on EVIL credit!! For some, it is a really hard kick in the pants to get that money
July 22nd, 2008 at 4:09 pm
People have said that having cable is unnecessary…whie I’d agree with that statement, I also think that having an internet connection at home is unnecessary. Why pay $50 - $100 a month (because if you get internet, you will want the fastest service and you WILL pay for it) when you don’t need it? I have internet access at work and as long as my job gets done, my boss doesn’t mind my surfing.
For those of you whose internet access is restricted at work, consider the way I lived (for two years) before I got this job: with no internet whatsoever. It is not a basic human right, nor will you cease breathing if you don’t have it. And if you put that money away, you’ll have $600 -$1$1200 saved (or put towards your debt) by the end of the year.
Now before you post a reply talking about how internet is so much more useful than cable, I agree with you. My point is, it’s NOT a necessity, any more than having cable is a necessity. If you think it is, try living without it for a while. I promise, your whole world won’t come crashing down.
July 23rd, 2008 at 10:06 am
Gail, I’m curious about your final point - the “extra” paycheque. We have subscribed to this theory in the past, only to find ourselves disappointed. The thing is, yes, there is a fifth paycheque, but that also means there’s a fifth time to pay the daycare, buy groceries, make a car pmt (we pay weekly), and so on. By the time all those “extra” weekly expenses are gone, the “extra” paycheque is gone too.
So how do we benefit from it? Is there something that I am not considering??
PS….LOVE you, your show, and your advice!
July 23rd, 2008 at 11:42 am
You really only benefit from the “extra” paycheque if your payments are set up monthly. We pay our mortgage weekly as well so the extra paycheque my husband gets (I am paid bi-monthly) doesn’t really make a big difference.
September 8th, 2008 at 12:19 pm
Hi Gail. I am located in Singapore and I get to watch your show on cable TV and I have learnt alot from your show. I have managed to reduce my debt following the many tips from your show and now am working towards building up my savings and using-cash-only habit. Not there yet but am working towards that. I just wanted to share a ’saving’ habit that I have started and now my bf is on board too. In Singapore, getting a $5 note back as change is not as common as getting $2 notes or $1 coins. So what I have done is each time I get a $5 note, I put it aside as savings. And after a year, my bf and I managed to total $5,000. We went to the bank and the bank teller was shocked to see all the fives and asked us how it came about. She was pretty amused by my story but hey, I have savings that I never had before. We’ve started a new batch of fives now and I have a couple of friends who caught the bug and started their own fives too! Just wanted to share that savings can be fun too and we just have to find creative way to save :o) Cheers, Liz