Here's part 3 of a Money Central piece on how you can save big on a small income:
Create bank errors in your favor. "If I spend $2.16 on a coffee, I deduct $3 (in my check register)," writes AJ. "It really adds up." Several readers share AJ's strategy, including a blogger named Natalie, who even rounds down her paycheck. A $425 check would become $400 in the check register -- and the $25 is saved.
Make a fair trade. One reader swapped her cleaning skills for day-care time for her child; Beth recently helped a neighbor build a fence in exchange for some pocket money; in exchange for some editing, a friend is going to organize my messy apartment. The swaps are endless -- and the savings can be huge. "You can get together with friends and have a clothes or furniture/house item swap," adds Nancy.
Switch from paper to plastic. A surprising number of women are mega-advocates of relying on credit cards as a way of controlling spending. Some get cash back or miles; some just feel handling cash is too risky. "I don't carry cash, I don't use cash," writes Chris. "This has helped to curb impulse spending, which equates to effective saving."
Caveat: These responsible souls pay the card balance in full each month, often depositing the cash for purchases in advance. Ahem!
Divide and conquer. Divide the total amount of your car insurance (or other irregular expense) by 12 and sock away that amount each month so you don't get caught short. Lea says she won't blow her holiday budget this year because she's used this system to save each month for gifts.
My thoughts:
1. The first set of ideas seems like too much effort and a lack of control for me to use. It's easier for me to simply record what the actual numbers are and then apply some discipline to my purchases. Adding extra amounts to checks sent out and deducting from a paycheck both seem like too much work and bother. Plus, you never know where you actually stand -- don't you have to spend a lot of time reconciling your checking account to make sure the bank didn't make a mistake? But if it works for you, I'd say go ahead and use it.
2. I love the trading idea. As I've written before, my wife saves us tons doing this with babysitting and clothing.
3. I don't know about the paper to plastic idea. I agree that you do want to maximize your credit cards rewards, but there's just something about telling people who are on shaky financial ground to use their credit card more that doesn't sit right with me.
4. Good point on saving for big expenses. In addition, saving over a year will allow you to make an annual payment on items like your car and house insurance -- which will net you a savings over paying twice a year or quarterly.
This idea helps me save on a regular basis every month: When I cash my monthly check of $100, the first thing I do before spending one penny of it is to buy two rolls of quarters. That way I'm "paying myself first", actually saving money(because I hate spending coins, so I take those rolls of quarters home and stash them in my home EF jar), then budgeting the rest of it.
And I used to be what I considered the world's worst spender.
Posted by: carol | May 01, 2007 at 07:39 PM