How to Painlessly Save $1,000 This Year
Do sweat the small stuff. Little things add up, especially when you’re talking money. Make a change here and a change there, and in a year you have $1,000. What you need most is a bit of creativity and discipline.
Take a look at where the savings can come from.
Conquer the 5% challenge
What is your largest discretionary expense? Ask yourself if you can spend 5% less? Say for example, you spend $400 a month at the grocery store. Can you spend $380? Think through your typical items. Can you reduce them or choose different brands? Do what you can to get the bill down to save 5% or $20. Over a year, $20 a month is $240. The 5% challenge works because it is small so it doesn’t seem like a huge sacrifice. Just a little tweak, says Mackey McNeill, CEO of Mackey Advisors, a wealth advocacy firm.
Change your frequency
Prolonged austerity doesn’t work. The key is moderation. If you spend $30 a pop getting nails done and you go every other week, are you willing to do your nails yourself every other time? That way, instead of a manicure 13 times a year it’s 6-7 times a year, a savings of $210.
If you let go a bit of that daily $3 java jolt and make coffee at home one day a week, you’ll save $2.50 a week. That adds up to $130 a year.
The best way to save $1,000 a year is to have $38.47 deducted from each paycheck and deposited automatically into a savings account (assuming you get paid twice a month). Paying yourself first, is a sure fire way to accumulate savings over the long haul, says Jim Scheinberg, managing partner of North Pier Fiduciary Management.
Along the same lines, to get $1,000, pay yourself $19 a week in your 401k plan. Your firm may match a portion (which is free money). The feds will pick up between 15-31% of the contribution as a tax write off.
According to a recent report by the Internet Innovation Alliance, the average consumer saves about $47 a year by paying bills online, reports consumer savings expert Regina Novickis. Utilize your online banking services to pay your monthly bills. This eliminates the cost of postage, check reorder fees and additional charges for paying by phone.
Comparison shopping on travel websites for transportation and accommodations can immediately save hundreds of dollars on just one trip. For example, a recent search for a flight from Los Angeles to Las Vegas on multiple airlines showed a difference in price of $260 from one airline to another, says Novickis. Take your travel savings further by comparing rates for hotels and rental cars; then applying promotional codes for additional savings. Go to sites like PromotionalCodes.com or CouponWinner.com to find codes to really maximize your savings. You could save $300 a trip, she says.
If you are thinking of purchasing an electronic item, hold on to your money and monitor sites like Techbargains.com. These sites provide you with short term sales and discounts that can save you hundreds. Ted Collins, a certified public accountant with Vicenti Lloyd Stutzman says he just saved $250 on a camera.
Be fastidious about fees
Keep track of your ATM withdrawals. Most people don’t realize how much money they are wasting when they simply go to the ATM and withdraw cash.
Try and pay off credit cards each month, instead of paying interest, especially with interest rates creeping upward. If you do carry a balance, call your credit card company and ask for a lower rate, this can save you dollars with very little effort.
Sharon Lechter, co-author of Rich Dad Poor Dad is full of ideas. Take advantage of daily deals on things you would be doing anyway, but get them for half the cost. Buy bottled water and take it to neighborhood sports practices and games to sell to parents attending the events. Sell clothing or other household items for you and your friends on Ebay for a fee. Start an online blog and advertise others’ products for a fee.
What’s the story here? Saving can be simple, yet significant.