Re: how do you save money??
There's only one answer to this problem ... fiscal discipline.
One of the things that helped me establish fiscal discipline early on was setting the goal of buying a new $1000 6 month CD every month. By placing the cash in a CD rather than a savings / checking account, not only did I earn a little bit higher interest rate, but I was immediately conscious of the fact that attempting to access the CD money before the term of the CD was up would cost me a cash penalty.
After I got home from the club every night I would put whatever cash I could afford to actually save in an envelope. If by the end of the month I hadn't managed to save up the $1000 minimum buy-in during a particular month, I would continue saving and buy the CD the following month.
Once I had purchased six $1,000 six month CD's with 'staggered' maturity dates (i.e. one CD maturing every month) I then began to 'roll over' the CD's as they matured with additional saved up cash. In other words, after 7 months I would have both the $1,040 (or whatever, depended on interest rate ) from the maturing $1,000 CD I had bought 6 months prior, plus another $1000 I saved up during the 7th month, which could be rolled into buying a new $2,000 6 month CD. I kept doing this for about 3 years until I had built up the value of each of the six 6 month CD's to about $5-6,000 ... Which was 'perfect' for use as my emergency cash reserve.
While I never actually needed to use it, having emergency cash reserve money only available in the form of $5,000 per month for up to six months would have allowed me to cover my 'normal bills and living expenses' without being tempted to blow through the money ( i.e. having an immediately available $30,000 sitting in a savings account instead would have been extremely tempting). I still to this day keep progressively rolling over these six CD's as one matures each month, although I no longer add money to them (extra money now goes to more lucrative but riskier investments).
Re: how do you save money??
Do not put it into a bank account you have easy access too. I use an ING account - takes 3 days for the money to transfer to my checking account - usually its too much of a hassle to do that and it makes me re-think whether I really need the money or just want it.
Re: how do you save money??
Re: how do you save money??
At the moment, I deposit all the money I make from work into my savings account. I keep a few hundred (like about $500) in my checking account, so I can use my card for whatever reasons, but most of it is in my savings, and I don't take it out of there. Think of your checking account as the only money you're allowed to use, and never take money out of your savings. When your checking account gets a little low, then add a little more in.... but not too much.
I haven't figured out how to do CDs or money market accounts yet so I'm just letting my money sit in a bank, but I'm working on it.
Re: how do you save money??
^^^ you can probably buy a 6 month CD from the same bank where you maintain your savings and checking account. Ask the teller next time you stop.
Re: how do you save money??
^^^^^^^^^^unfortunatly CDs are only about 1.50% right now
/end thread jack
Re: how do you save money??
I have a checking/savings account just for work. When I got the atm card in the mail I cut it up. If I ever need the money I have to deposit or withdraw through another acct. I have online. Yes, Its a hassle but it keeps me from spending the money :)
Re: how do you save money??
Quote:
Originally Posted by
lola85
^^^^^^^^^^unfortunatly CDs are only about 1.50% right now
/end thread jack
Im SO sick of everyone saying end thread jack...
CDs are vaulable infomation to this thread. Savings account is only about .10% and by putting it in a CD would "SAVE" money.
And I looked at some CD rates and they do have a lot that have a higher rate than 1.50% I saw something about 2.30 ..
Re: how do you save money??
Start small. This will make saving easier than having huge ambitious goals. Start with a goal of $1000. I use an ING account, too. Their regular savings accounts are paying 1.50% right now, so they are pretty decent.
If you get tempted to take money from your savings account, first just wait 24 hours before committing to taking the money out. Think about what it is that you want so badly that you are tempted to withdrawal the money.
Next, use a savings calculator to see what will happen to your money if you leave it, versus if you take it out. Here's a good saving's calculator.
When you have enough in your regular savings account to cover 6 months living expenses (calculate about 2/3 of your take home now per month), then start moving money into a long term investment tool, like a mutual fund. I own several funds as some are high risk and others are low/no risk savings.
For now, though just concentrate on building up that savings account. Be proud of yourself when you've resisted spending on something frivolous. Trust me, there is no more secure feeling in the world than being able to handle an emergency without having to panic about money. I once twisted my ankle pretty bad. I couldn't dance for 6 weeks due to the sprain. I also happened to be the only source of income for my family at the time. If we didn't have any savings, we would have been in some real trouble, or I would have been tempted to go back to work too soon, and possibly injure myself even more.
Re: how do you save money??
Quote:
CDs are vaulable infomation to this thread. Savings account is only about .10% and by putting it in a CD would "SAVE" money.
And I looked at some CD rates and they do have a lot that have a higher rate than 1.50% I saw something about 2.30 ..
The point about CD's involved establishing 'fiscal discipline' ... something which the early withdrawl penalties of CD's automatically enforces, while most other savings / investment vehicles do not !
As to the issue of 6 month CD's paying a 'low' rate of interest, the response must be 'low in comparison to what ?'. For a fact CD's are one of the very few investment vehicles which are 100% guaranteed against loss of principal value. Compared to other 100% guaranteed options like bank savings accounts, CD's pay a higher rate of interest.
Put another way, buying into a corporate bond / corporate paper based money market, or buying into actual corporate bonds or stocks, will 'promise' that the dividend / interest rate to be paid will be significantly higher than the interest rate available on CD's. However, when it comes time to cash in, the amount of 'principal' returned may be greater than or LESS than the amount originally invested. This forms a risk versus reward equation ... and IMHO at least, that very risk makes these other types of investments unsuitable for the purpose of an 'emergency fund'.
As I posted above, once an emergency fund has been established via CD's that will cover 6 months worth of living expenses, it THEN becomes appropriate to deploy additional moneys to enter into higher risk investments in search of higher rewards. But that's just one dumb big-boobed blonde's opinion.
Also, certain banks and credit unions are offering 2% interest on 6 month CD's right now. This compares to perhaps 5% in a speculative money market account backed by commercial paper. So in the final analysis relative to $1000 in principal 'invested', you're talking about sacrificing $30 per year in interest earnings (if the economy does well), versus avoiding a potential risk of a $100 loss of principal (if the corporations behind the commercial paper do poorly / default). And the $30 differential is actually only $20 or so after taxes !
Cumulatively, the point you are attempting to make about the 'poor' returns available from CD's is only viable by 'the underpricing of risk'. Granted that 'the underpricing of risk' has been rampant in the US economy during recent years. However, a whole lot of investors have recently received a painful lesson in this regard, from (examples) a 6% decline in the principal value of their speculative money market account balance, to their speculative money market account being temporarily 'frozen' against withdrawls, to a 20-30-40% decline in the 'principal' value of stock / bond mutual funds etc. Just as the old adage that 'real estate always goes up in value' evaporated from the American psyche, the 'underpricing of risk' involved in certain types of investments will also evaporate eventually.
~
Re: how do you save money??
I was taught that at each financial earning (paycheck, dividend check, etc.), you make a payment to yourself. I did mine to an investment account.
Re: how do you save money??
Fiscal discipline, as mentioned by prior posters, is a wonderful concept, but without some tangible guidelines. Its nice to say that you're goal is to jog x ammount of miles, and knock 1 minute per month off your time, but you're not going to get there if you continue to gorge yourself on all you can eat buffets.
So, what are some useful guidelines?? OK, 3 big essentials in life are shelter, food, & transportation.
SHELTER- I'm assuming that you're renting. Monthly rent should not exceed 25% of monthly income. If it does, then changes need to be made(go roomie route, consider moving to less expensive dwelling, etc).
FOOD- I'm not going to suggest starving oneself, or eating grilled cheese sandwiches, b/c I never did it myself. But, one should eat in more than eat out, home brew more than buy Starbucks, brownbag it more, etc. Ditto for generic vs "namebrand", buying items bulk or on sale.Getting into a certain habitual mindset is just as important as the $$ & :twocents: ammount actually saved.
TRANSPORTATION- Vehicle purchase price should not exceed 1/3 of annual income AND should keep it at least 5 yrs. Countless people with financial problems have exceeded these guidelines.
Best wishes.
Re: how do you save money??
1.5 is actually good interest these days! CD's are good- that's how I got my boobs, I started saving at 16 from my job at a rest. Bank of America actually has a good Money Market Savings Account. But I know you a fairly new to dancing. When I first started all the vets told me to save my money and I didn't listen. I blew $30,000 in six months on bullshit so please take this advice to heart! p.s. I could REALLY use that 30 g's right now and most of it is hanging in my closet-tags still on 5 years later. Ebay anyone?
Re: how do you save money??
Quote:
Originally Posted by
babybambi08
... like I use a lot of cleaning supplies.. but I tryed using lemon juice for the stove top and it works so much better so thats a cut back.
You could try baking soda (I haven't done all of these, so see if anyone else suggests them): http://www.thenewhomemaker.com/bakingsoda