Little changes make a big difference in your pocket

Even in these challenging economic times American’s are working on improving their savings. Join in the “new” savings movement and use one or two of the suggestions below to start building your emergency fund.

1. Question your spending: Ask yourself how much you are willing to spend on each item. When I am tempted to splurge on an item, I ask myself how many hours I worked or will have to work to pay for that item, vacation, or meal. When I realized that I had to work two hours to take my family of seven out to dinner at a fast-food restaurant we stopped eating out. There are a lot better uses for my money.
2. Look for free fun: Need an alternative to shopping, dining out, or going to the movies? Expand your options! Talk a walk or bike ride with friends. Go for a picnic instead of eating at a restaurant. Have clothing exchange party – everyone brings some things they don’t wear anymore and you see if you can trade. Your friends may be relieved to hear your less expensive alternatives for having fun.
3. Follow the crowds: While major department stores are hurting from the downshift in the economy, discount stores are holding steady. Look for discount grocery stores, clothing stores, and other discount chain stores such as Wal-Mart and The Dollar Store.
4. Save on food: Pack your lunch and avoid the latte factor. One latte at $3.50 a day works out to, approximately $910 a year. Treat yourself to one latte per week and tuck the savings away. Also, when you go shopping make a list and stick to it!
5. Taxes: Don’t overpay your taxes – why would you want to loan your money to the government when you could be earning interest on it. It is better to accurately adjust your W4 so that you will only receive a minimal refund and save the extra you would have paid throughout the year. You can also save the smaller refund!
6. Raise your insurance deductibles: If it is viable for you to do this, your premiums will go down and you can save the difference!
7. Keep things interesting: Start savings all your quarters or better yet, your $5 bills. Pick a different unit of money every week or month and watch your savings grow!
8. Save extra or unexpected cash: When you receive a monetary gift, tax refund, raise or bonus don’t be tempted to spend it – invest it. When you finish paying off a loan, continue investing that same amount of money into your savings or investment account.
9. Save energy: Turn off and unplug items you are not using; replace incandescent bulbs with fluorescent bulbs; switch to cold water for laundry; buy Energy Star certified appliances.
10. Look for savings opportunities: Track your spending for one month and determine what you spent on needs and what you spent on wants. Eliminate some of those wants and put the money into savings.

Published Sep 8, 2009.