Savings secrets do not exist in Europe and Asia, but in the good ole U.S.A trying to put together a savings jar of $400 or $500 is elusive. With most families today, it is matter of falling back on credit cards for emergency expenses, which easily leads many into the great credit card trap.
Senior Analyst Robert McKinley of CardWeb, CardTrak and CardFlash says he explained to his son-in-law, with a family of seven, the conventional wisdom is to have six months of salary put away as a safety net in case you lose your job. A lesson many Americans learned the hard way in the “Great Recession.” His son-in-law just laughed noting there is an emergency expense nearly every week.
On the other hand McKinley’s father-in-law who went to through the “Great Depression,” came to distrust banks, and became a life-long habitual saver, and literally saved every dime. if you were visiting his house, and you had loose change, he would exchange it for dimes. Of course he had many silver dimes too and when he finally passed at 97 he had enough times for everybody, not only in the town, but probably the county and beyond. He was also a major coupon clipper, believed in U.S. Savings Bonds, and used to “envelope method” to manage his bills with cash.
Professor Cardworthy, in his latest episode, explains things are a little more sophisticated today to enable good savings habits. There are tons of apps in the marketplace, some offered by banks and some by credit card issuers, enabling you to round up purchases.For example, buy something for $9.81 and round it up to $10 and put the difference into a savings account. It’s automatic, an “out of sight & out of mind” kind of thing.
Other Savings Secrets
There are also spending apps, like Honey, enabling you to automatically apply the best coupon codes to online purchases. Additionally, there are tracking apps, like Dobot, to monitor spending, getting a real good idea where all the money goes, according to Bankcenter.
Cardworthy also says make savings a habit, but a realistic habit, You can’t save first, then pay your bills. Manage bills down so you have something to save at the end of the month.
It is very common today to sign up for a subscription service automatically billed to your credit card, and then forget about it, or not use the service. (Music apps are notorious.) Evaluate and cancel those unneeded services and put in the proverbial “cookie jar.”
Automate savings with payroll deductions besides 401(k) contributions. Cardworthy says old timers would typically have a savings bond and/or a payroll deposit made directly to a credit union, both automatically deducted.
Finally, consider saving with friends, working towards a goal together, by sharing savings tips and supporting each other. Perhaps like a Weight Watchers program. It is best to find friends with families who are in the same kind of struggle, trying to save, suggests CardBuzz.
Before long you may need to join Savers Anonymous – Not a Bad Thing.