Stash Your Cash, Gain Without Pain
By Hilary Martin and Erin Suter
Spring 2004
Saving money seems to be one of those unattainable goals many families have reserved for "some day." But your "some day" savings account won't do you any good in the case of an emergency.
Everyone has a different reason for wanting to save money, and find just as many different excuses for not doing so. The most common excuse seems to be, "We don't make enough money to save any money." Often, that really means, "We don't want to sacrifice our quality of life just to have a big savings account." There always will be that trip to McDonald's, those new shoes you simply must have, and your spouse still will refuse to stop wasting money on HBO.
So what's a modern family to do? We all know we could save money, but we would be miserable in the process. So we blame our small paychecks and not our poor saving habits.
The truth is that saving money is easy! All it takes is a little creativity and some "squirreling" here and there to stash some emergency cash or start that little Christmas fund for next year. The best news is, you won't even feel any real pain. You can keep watching HBO and going out to eat the same as you always have, except now you will have the peace of mind knowing that your savings didn't suffer from your addictions to Big Macs and "Sex and the City."
Simply by applying a little creative thinking and a small investment of time, you can find the cash to stash into your savings. Here are 10 suggestions:
What you don't see, you don't miss. Out of sight, out of mind. Set up an allotment directly to your savings account and you won't see - or spend - that money. Once you readjust your spending habits, you'll forget the money ever was there. Even an amount as small as $25 per pay period will add up to $600 in a year. The important step is not to rely on yourself to transfer the money, since you will always find an excuse why you can't give up your savings this payday. Your payroll clerk can walk you through the necessary steps to set up an allotment; you'll be surprised how easy it is. Many civilian employers offer similar options with direct deposit by allowing you to split your paycheck between two or more accounts.
Hold on to your change. A penny saved really is a penny earned. By not spending your spare change, you can save between $25 and $50 per month. Every night, have your family place excess pocket change into a piggy bank and sit down once a week to count and roll it up. Those nickels and dimes often are forgotten because they don't seem significant enough to make a difference in our day-to-day lives, but they certainly make a difference over time.
Brown-bag it. If you assume the average fast-food lunch costs $5 per person, eating lunch out every day can easily cost $100 per month or more. So you aren't willing to give up those french fries? Bringing lunch from home just one day a week can save $250 or more during the year.
Save those leftovers. Isn't it a wonderful surprise when payday rolls around and some money still is left from the previous check? Rather than spend it, move any leftover money into your savings to avoid temptation. Even a mere $25 per payday adds up to $600 a year.
Ration your money. What's that? Never have any leftover money? Try paying everyone in your family an allowance. This is the money you would use to buy new shoes or go out to lunch with the girls at work. Make sure the allowances you pay are livable or the temptation to dip into the reserve fund will prove too great. Keep in mind that this doesn't mean unexpected expenses won't crop up, and it is unrealistic to stay fully within this allowance during a birthday, holiday, or other event that requires extra funds. Dipping into the reserve should be the exception, however, and not the rule.
Swap services. Save a little money by swapping services with a friend or neighbor. How about babysitting? Rather than paying a sitter, offer to swap a night out with a friend. In exchange for watching your children for a few hours on Friday night, you can watch her kids for the same amount of time on Saturday. Take the money you would have used for the sitter and send it straight to your savings. Try carpooling to save gas money, and consider any other creative ideas that come to mind.
Bonus bucks. Stash larger amounts of money into your savings account through bonuses and tax refunds. The IRS sent out $600 tax return advances last year. Did you save any of this money? Putting away even half of your return can provide you with a significant amount. Will you receive a re-enlistment bonus this year? Rather than spend the whole amount, place a portion into your savings. Bonuses and tax refunds provide a significant cushion and, since you wouldn't normally receive this money on a monthly basis, you won't miss it.
Have Uncle Sam hold it. Saving for a big-ticket item, such as a vacation or a large screen TV? We know several people who use the government as a means of saving money. By increasing your tax withholding, you will boost your tax refund in April - so you won't have it to spend until then. This will protect the money from impulse buying. On the other hand, the money won't be available for an emergency, so we do not recommend this as your only method of saving. But it is one way to obtain a large sum of cash and helps families fight the natural temptation to spend the money before it's saved.
Protect your investment. Since it is so important to set aside some money on a regular basis, it is also important that you resist dipping into your savings as much as possible. When choosing a savings account, come up with ways to protect your savings from yourself. You should be able to access the funds in an emergency, but make sure the transfer of money is difficult enough that you would not do so for an everyday expense. Don't store your savings in a checking account, because the money is too easy to spend. Talk to an account representative at your bank about ways you can increase the nuisance factor when attempting to withdraw funds. Even more important, discuss your savings goals and consider suggestions for structuring your savings account to provide a higher return on your investment.
Find ways that work for you. General suggestions may prove helpful, but the best way to save money without feeling pain is to critically evaluate your own budget. Look for ways to save money on your monthly expenses. Can you lower your insurance rates by changing companies? How about switching your long distance service? Can you reduce fees by changing to a different checking account? Can you save $10 a month by switching your unlimited Internet access plan to a smaller company with a limited plan?
However you choose to save money, it doesn't have to take all of the fun out of life. Small amounts saved here and there, done consistently, will add up to more than you would expect. Apply just three of the suggestions in this article - placing $25 per pay period into a savings account, bringing lunch from home one day each week, and saving $10 a month on one utility - and you can save nearly $1,000 a year. And that's a fairly tidy sum for an emergency fund!
You'll thank yourself when you need new tires, an unexpected bill pops up, or DFAS has shorted your pay.
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Hilary Martin and Erin Suter are military wives and work-at-home moms. Hilary is author of "Solo-Ops: A Survival Guide for Military Wives," and founder of the Solo-Ops website (www.soloops.com), a support site for military wives. Erin is the Solo-Ops research officer.
