Everything Finance

I was reading a post on CNN money by Walter Updegrave where he was answering a question by a reader about the simple ways of saving money. Although Walter's answer was good , I found more practical tips for saving money in the comments left by various readers.

Here are a few of my favorites:

• I had a friend however whose husband would spend whatever balance was in the checking account. So one week she would pay the bill to “BellSouth” for the actual phone bill and a couple weeks later she would put a payment to “southern Bell” for the same phone bill. It basically deducted the bill twice from the account. She could go back and add up all the Southern Bells and see what her savings was and it provided emergency funds for her when needed. No not an ideal system but it worked for her.
  Posted By K Hofmann, Gastonia, NC
  

• My wife and I set up several savings accounts at ING (no fees, good rates) and a set amount goes into each account every pay period. We use these accounts as savings and “escrow” accounts, we save all year long for car repairs & registrations, car insurance, home heating oil, our property tax bills, vacations, etc. My other suggestion is to split pay raises into 3 parts, increase regular savings, retirement savings and to fatten the budget (more breathing room each month).
  Posted By dugdg1, Manch-Vegas, NH
  

• I think that the best “savings strategy” for most people in the United States is a healthy dose of perspective once in a while. Do some reading about how the majority of people in the world live. When you get the urge to whine about how life is not worth living without all the latest electronic gadgets, think about the women in Malawi whose children are dead of AIDS, and who are raising their grandchildren on rotten bug-infested grain, because they have no other food to give them. When you feel personally offended by rising gas prices, think about the sweatshop workers in Bangladesh who walk for two hours to get to work, and feel it’s the best opportunity they’ve ever had. Realize that you have all of what you need and most of what you want, make do with a little less, and go make a donation to Oxfam already.
  Posted By Johanna, College Park, MD

• My paycheck gets deposited to an online savings account (ING) on a bimonthly basis. When I started, the assumption was to save atleast 10% of my annual salary, 10% for retirement, and the rest for normal expenses, debt, etc.
  This strategy has worked very well for me so far and since I started, I am saving about 20% of my pre-tax income and an additional 10% (pre-tax) for retirement.
  The benefit here is that I don’t even see the money in my checking account so I am not tempted to spend it and it earns a fairly good interest rate. Additionally, when I get a raise, my expenses don’t go up automatically and the extra money is automatically saved.
  Posted By Asad, Houston, TX

• I am lucky that my work offers direct deposit up to 7 accounts. On top of that I am on a bi-weekly pay schedule so all my budgeting is done on a monthly basis allowing me 2 extra pay checks a year to either pay off debt or stock away in savings. The way I have it set up is that I have a small amount of money each paycheck going into a “spending account” which we use for “wants” and another into a high yield money market account through Vanguard. Both of these are done automatically so I do not have to worry about it.
  Posted By KMoran, Dublin, CA

• I have a savings account in another bank that is separate from my checking and savings. I have automatic deposits sent to it each month. There is no debit card on the account so I have to drive there to withdrawl any money.
  It makes you think twice before withdrawls. last year when my car starter died, the $500.00 bill was paid for with cash. I am now saving to pay cash for my next car.
  Posted By DJ South Bend, Ind.

• For expensive items like a car or the cottage we’ve been thinking about, I setup an phony account in my financial software and automatically transfer the amount from our checking account each month. The money never really leaves checking but I don’t see it in my software. We build up the downpayment in this way and also see if we can truly afford what we want. It’s far better to test your ability to make those payments (while building up that downpayment) than to jump in and realize you couldn’t afford it!!
  Posted By Brian, Kalamazoo, MI

• One method I use is pocket change. I never spend my “change”. The coins that come back from everything. It goes home and in the evening it goes in a jug. Every few months I take it in and deposit in my savings account.
  I am told that your change equates to 5 to 7% of your expenditures. Not a lot, but more than most and its isn’t terribly painful. I know it is a surprize how much that deposit is.
  For me it supplements the direct deposit to savings that automatically comes out of my pay check, but it is a start for those who don’t have anything else.
  Posted By V Woolley, Bakersfield, CA

You can read the the entire conversation and Walter's "Past due: Your savings"

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