February
16 - 2009

How do you save your money?

This post over at Get Rich Slowly has drawn a lot of “me too” comments and a lot of flack for the idea being stupid. Intrigued? The guest subject pays her bills, then if she has any extra, she shuttles the money right into a savings account so she isn’t tempted to spend it.

Easy-peasy, right? But how many of us do it? I won’t ask for a show of hands.

I save money several ways:

  1. I have savings accounts set up with ING Direct for an emergency fund as well as Christmas, vacation, my child’s school tuition, summer camps, etc. Mr. Cheap has his own “fun money” account there too. Every month, those accounts reach into my checking account and automatically transfer set amounts into savings. It’s like another bill and I never miss it.
  2. In addition to a basic emergency fund deposit, long ago I started depositing $1 a day into my emergency savings account. Each week, that account pulls $7 into savings. I don’t even notice a transaction of that size. But in the 19 months I’ve been doing it, I’ve effortlessly saved $532, plus another $20 or so in interest over that time. $550 that feels like nothing … isn’t nothing.
  3. I save change in a change jar. When the jar is full, I turn it in at Coinstar. I use the receipt to pay for groceries (the machine is at the grocery store), but then I transfer that amount to my savings account.
  4. I sock away extras. If I get paid for extra work, or sell something on eBay, I transfer the money into savings. We sold some of my daughter’s old toys this fall for big bucks. She got part of it to invest in new toys and her own savings. I put the rest aside to buy her a new mattress, something she really wants.
  5. From my business, I put 25% of each and every client payment into a savings account. I have to pay self-employment tax and quarterly estimated income taxes. This amount more than covers what I need to pay, which means that it leaves a nice cushion for months like this one, when an invoice got lost and a client paid late. Plus, no freaking out at tax time if I earn more one year — I’ll have the extra to cover a tax bill if need be. (When I started out and didn’t yet have a child and a mortgage, I was able to set aside 50% of each check — and at year’s end, paid off my remaining student loans in a lump sum.)

A new tool to try

I’m thinking about adding one more method. I’ve been observing myself using shopping self-restraint lately … and thinking about some big home improvements I’d like to make. I’m thinking I should make note of the small purchases I don’t make — maybe a latte, maybe an item of clothing, maybe a little something at Target — but could probably afford, or would normally buy. Then I could tally up those totals over the week and transfer the amount to an account for fixing up other areas of life. I think it just might provide the motivation to hone my attention to purchasing even more.

I’ve heard of people getting aggressive about grocery savings and then taking the “you saved $xxx today” amount from their grocery receipt and transferring it to savings.

One could do the same thing with thrift store purchases — add up how much you might have spent and pay it to yourself instead.

What do you do?

What are your little tricks for saving money? Share the wealth!

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