If you are serious about having a healthy emergency money fund, you might want to curb the consumer in you. This means, instead of spending, saving. Of course, the number one, best way of saving remains to have a portion of your weekly paycheck automatically deposited to your savings account. If you like the idea of deciding, week by week, how much savings you will deposit, take heart and adapt a serious tip or two. It’s all good if the end result is better and more savings.
Hold that “mother” of all garage sales, once and for all! Do your homework and literally do a house inventory. Journey back, all the way back, into the furthest reach of every closet and decide that, if you have not used it for more than six months, it will have to go. Most people have at least $1,000 worth of garage sale items hidden away in their home. This turns out to be a veritable gold mine for many.
Just how much do you need that nasty, pack-a-day smoking habit? In Washington state, that’s easily $5 a day-or about $1,800 a year-that can go right into your savings. This does not even begin to touch the savings in insurance and health care.
Tame the driving tiger in you. Instead, carpool or use public transportation. This will save you on gas, insurance and maintenance costs-not to mention any money spent on a headache. Using the IRS’s 2002 mileage reimbursement rate of 36.5 cents per mile as a proxy for the cost of commuting, you could save $1,141 a year by driving half the time for 50 weeks of the year (based on a 25-mile roundtrip commute). For an even more serious approach, consider nixing your car if you live in the city. Some cities are now implementing progressive programs that allow you to have access to a car without the ownership hassles (e.g. “Flexcar” in Seattle, Portland and Washington, D.C.)
Buy items used. The average consumer spends about $1,750 a year on clothing and its upkeep, according to the U.S. Bureau of Labor Statistics’ most recent Consumer Expenditure Survey. You can easily cut that in half by shopping at consignment shops and auctions, though the life of the goods may be a bit less than buying new. To account for that, the annual savings may only amount to 25%, or $437.
Become a homebody. At just over $1,800 a year on average, entertainment spending has a way of eating up the best-planned budgets. Consider the library for books, music and movies. Eat out less often. The average person spends $2,276 a year on eating out. Try cutting your spending in half on both areas for annual savings of more than $1,900.
Cut your housing costs. While a move across the tracks may save some money, moves are expensive. Consider renting out a room in your house. The average housing costs per person in 2004 were just over $13,200. In metropolitan areas such as Seattle, rooms easily go for $400 a month. Figure about $20 of that goes to increases in utility costs, and you’ve still realized annual savings of more than $4,000 before any income taxes.
Cut up every one of your credit cards. Build an emergency fund first to handle most unexpected expenses. This allows you to become your own lending agency. Credit cards can be a cash-flow management tool, but paying only the minimum will keep you in debt for years.
If you’re the average American with at least one credit card, you probably have close to $8,523 in credit card debt, according to industry research group CardWeb.com. At an average APR of 14.4%, it could cost you as much as $1,100 a year in interest rates alone. By simply waiting until you’ve saved enough money to make purchases, you could eliminate those interest payments.
If you’re very ambitious and follow all the above tips, you could be looking at savings of some $12,000 a year. Figuring you can invest that at the historical rate of return of 10%, your savings do start to compound nicely-and rapidly. Instead of the debt, go for the emergency fund and save.
Related posts:
- A Few Useful Savings Strategies
1. Don’t pay a dime for anything that you can make or fix for yourself. 2. Prolong the life of whatever you own. 3. Use less of what you need. 4. Think creatively. The answer doesn’t have to be “buy a new one.” 5. Don’t toss anything if it can... - Make Small Cuts for Huge Savings
Tilt the wheel of creating wealth in your favor. Naturally, spending less is one way. However, to be sure to make your money work harder for you-set goals to make certain it happens. Many have wondered what can be the foolproof way of creating wealth. Is it to buy top... - Simple Ways to Bring both Calm AND Savings into your Life
Saving is far more than just an action – it is a way of living, day-by-day. Start to be calm by first slowing. Whatever it is that you are working on now, stop. Spend the next 30 minutes a day in silence and solitude. You need to teach your mind... - Why 529 College Savings Plans Still Make Sense
When the economy went sour and took the stock market with it, lots of pundits came out swinging against 529 college savings plans. “You see, you saved all this money for college and now it’s gone,” they exclaimed. They claim that investing for college in stocks is risky and, therefore,... - Pricing Strategies That Improve Profit
Pricing strategies are a sometimes-overlooked part of the marketing mix. They can have a large impact on profit, so should be given the same consideration as promotion and advertising strategies. A higher or lower price can dramatically change both gross margins and sales volume. This indirectly affects other expenses by... - 5 Strategies For Creating Win-Win Guarantees
======================================= True Story: The Refund Policy Convinced Me ======================================= In 2002 I was interested in taking some classes on life and small business coaching and was trying to decide on a coaching school. If you know anything about the coaching profession, you probably know that there are tons of organizations... - Simpler Solutions for Managing your Money
Let’s face it, coming up with smart and simple ways of saving money takes thinking that is a bit more creative. Use some of these shortcuts to managing your finances. They are guaranteed to save you time and money. Trick your mind into saving Can’t always come up with where... - Use SEO Strategies to Increase Web Traffic
Every new technology adopted widely by society brings about a number of new opportunities. The movable type printing press created affordable print information, the telephone and radio created the concept of instantaneous communication over great distances. Today, the Internet has unified both of these concepts into the information explosion that... - Timeless Sales Strategies
In the following posts, you will learn all about ideas that sales superstars use to become who they are today and how you can become like them too. In the 21st century, times have changed and it isn’t easy to anticipate the demands of your clients or customers. We know... - Alternative Pricing Strategies
Pricing is certainly one of the most important factors of your marketing mix strategy. Correct pricing can make your product a hit or a failure in the market. The factors that have to be kept in mind when marketing your product are the following: It has to be of superior... - Launching Your Online Marketing Strategies
If you have a business, there are lots of different ways to promote it and make sure you get customers. Having a website is of utmost importance, and by using some of the many online marketing methods available, like blog marketing and article marketing, you can be sure to get... - Using Sales Strategies That Stand The Test Of Time
Here are a few sales strategies that will stand the test of time and you can apply it to any business you are in: Find Only People Who Want Your Wares This is a very simple mindset that most salesmen fail to understand. If you want to sell and you... - Creative Real Estate Investing: 4 Basic Strategies You Should Know
Creative Real Estate Investing refers to those methods of purchasing and selling real estate that are considered rather unconventional. The answer to the question whether the techniques are unconventional largely depends on whom you ask. While professional investors argue that the techniques below are fairly commonplace, the na... - Building your Emergency Fund
It is great to build your emergency fund which is useful over time.... - Start to Build your Emergency Fund
Finding money during an emergency can be very difficult if you fail to plan. Establish emergency savings in both good times and in bad. The chance is very good that you will be called upon to put out a sum of money on the spot and when you least expect...