practical savings tips - sep2012
Maybe it’s a blueberry muffin, a cherry scone or a piping hot cup of coffee; just a one-time treat that somehow becomes a staple of your morning routine. Before you know it the very thought of going to work without hitting the drive-through seems incomprehensible. But just how much is your morning pick-me-up costing you?
While small purchases like these may seem harmless and inconsequential, taking a closer look at them can reveal that over time they really add up. That’s why Christine Rondeau and Sue Prince of Investment Planners, Inc. are adamant when they say, “Tracking your spending is key to financial peace. You have to know where you are spending your money and where you can cut back.” Other financial experts agree. Both Amanda Secor from Community First Credit Union and Kimberly Davis from Unison Credit Union stress the importance of taking the time to analyze where exactly your money is going so you can begin spending less and saving more.
While tracking spending may seem daunting and many don’t want to face just how much of their hard-earned money is spent on unnecessary items, it really is imperative to being a successful saver. When you first begin tracking your finances Secor advises, “Mind small purchases, they are the most common places for overspending.” Along those same lines, Davis uses the example of a going out for a quick lunch on a daily basis. She says, “By simply packing a lunch you could save an average of $5 a day, $150 a month, and $1800 a year!” Merely taking the time to really become aware of where and on what you spend your money is an invaluable tool when it comes to saving.
However, practical ways to save extend far beyond simply tracking spending. Once you begin tracking, Davis advises, “Make a few small changes to start, then build from there.” Instead of overhauling your whole spending outlook, taking small but effective steps ensures you won’t be overwhelmed in your quest to save. So what are some convenient yet effective ways to save? A major one that Rondeau and Prince recommend is paying for things with cash. Davis agrees, saying when using cash “You’ll see how much money you have at all times and when it is gone, well, then, it is gone!” Additionally, taking a closer look at your monthly bills is a great place to discover pointless spending. Secor says, “Oftentimes you are paying more than you need to for services you don’t really use.” Another piece of advice she gives to clients: “When tempted to make an impulse purchase give yourself a cooling-off period to decide if you really want or need to buy it. Every time you decide not to buy, you’ll save.” Carpooling to work, making lists, cutting back on utilities, and selling items you no longer use are more easy ways to cut back on spending without drastically changing your day-to-day life.
No matter where you decide to begin cutting back on spending, one thing is certain—small changes can lead to big savings! Taking the time to track finances and cut back on superfluous spending is essential to being financially secure. You simply cannot avoid the importance of saving in even the most trivial aspects of life because as Secor says, “Every choice that is made today will make a difference in the long run.”