10 ideas to build up that financial cushion

2012 in pictures: week 35
With my goal to track our spending for the last couple of months, I have also thought about ways to save a little bit more money for rainy days.

I already have some money automatically transferred into savings every month, but I know I can do more.

My problem usually is that what is most commonly suggested in order to cut unnecessary spending, I already do. I make my own lunches 99% of the time, I don’t get fancy coffee on the way to work, but brew it myself at the office, I don’t go to happy hour or spend a lot of money on eating/drinking out in general.

I realize that I do tend to be a bit of an impulse buyer, usually just little things here and there that provide instant gratification. A new stamp at Michaels, a marked-down shirt at Target, some random product from the beauty isle. I know that is an area I can work on.

A penny saved is a penny earned, right? Money that is not “available” in cash or your checking account, is not as easily spent.

So, the trick is to trick yourself into putting away money without even really knowing it.

Here are a few ideas I already implement:

1. Put your spare change in a piggy owl bank (like the one above). J is really good at that and he often goes through my wallet to empty it of all the change that I carry around. I frequently get mad at him for taking away all my change (as I do like to have a couple of quarters and nickles, because you never know when you might need them for a parking meter or what have you), but fact is: our piggy bank will fill up and that’s a good thing. It might not be that much total, but it could add up to as much as $100 a year or more.

2. Use a cash-back credit card. A lot of banks and institutions offer the option of earning cash-back on every purchase that you make with your credit card. I only recommend this if you know how to handle a credit card and if you pay off the balance every month (otherwise it won’t make any sense), but if you play it smart, you can make actual money off using your credit card. I personally have an AMEX account through hour Costco membership and I average about $200 in cash-back every year. Not bad, if you ask me!

3. Automatically transfer money from your paycheck into savings. Like I mentioned above, we do this already, but I know that we could save a little more. I’ve seen recommendations for like 10% of your income and then built it up to a higher percentage if you can.

Here are a few more ideas that I’d like to consider:

4. Save money that you earned by using coupons and store card discounts. I am not BIG into couponing. Most coupons are for stuff I usually don’t buy anyway and it’s too much of a hassle to search for coupons every week. However, I do use coupons (when I come across them) and store discounts where I can. I am thinking about putting the coupon savings (that are conveniently printed on to your store receipt as a percentage and $ amount of your purchase) to savings after every shopping trip. I mean, you technically could have paid full price, so why not put away that extra money?

5. Save interest earned on your savings. Do you earn interest on the savings you already have? For me, they show up in my checking account and even though it’s a really small amount, I want to get into the habit of transferring the interest back into the savings account, where it belongs.

6. Save your raise. If you were lucky enough to get even the smallest raise (ha! Hasn’t happened for me in… ever!… due to my stupid contractor position), consider automatically having the amount transferred into savings. You won’t even miss it since you already have a budget set to the salary that you earned previously.

7. Save all your $5 bills. My Dad taught me this when I was a little girl. He would put away every 5 Deutsche Mark coins (now 5€ bills) into a piggy hour glass bank and use this to finance part of our annual skiing vacations. Genius.

8. Transfer left-over money into savings at the end of the month. If you happen to have budgeted quite successfully during the month, consider transferring left-over money (or part of it) into savings, before you start a new month. I really like this idea, although I wish I wasn’t paid on a bi-weekly basis, but instead got my salary at the beginning of each month in full. Maybe it’s just me, but I have a hard time keeping track of expenses (and which part of the month they belong to), when I get paid twice a month on odd days. I am sorry, I just like it a bit more organized than that.

9. Reward yourself for chores you don’t like to do.  This really is a bit of a mind game because by paying yourself, you’re not actually earning any more money, BUT see it as a treat for yourself that every time you do an unpleasant chore, you put a couple of dollars away to reward yourself with later.

10. Round-up online purchases. If you happen to do a lot of online shopping, you could consider rounding up to the nearest dollar amount ($14.49 to $15) of even to the nearest ten ($14.49 to $20) and put the difference into savings.

Do you have other suggestions?
What do you do to trick yourself into saving a few bucks?

  1. A lot of the stuff you mentioned in your post above we already do (no surprise here ;) but putting every $ 5 bill away is a new one for us. We started it at the beginning of this year and at the end of 2013 we will get ourself a little treat with the saved amount ;)

  2. Great ideas! I do a lot of these myself, but I hadn’t thought about transferring coupon savings amounts to your savings account– I like that. Similar to #10, I know there’s some bank that rounds up all your transactions to the nearest dollar and automatically transfers the difference to a savings account.

    For places where I tend to impulse-buy (Target, bookstores, Starbucks, etc), I sometimes buy myself a gift card with a specific amount on it, and that essentially acts as my budget (for the month or for the year) at that store. When it’s gone, I don’t buy anything else for the rest of the month/year. Then I don’t feel totally deprived, but I keep my spending in check.

    My current money-related goal is to learn more about investing and IRAs. I already have a few mutual fund and 401k accounts (that I should probably consolidate), but I don’t really understand how they work or the best way to make them work for me.

  3. Great list! I think paying down debt comes first. But, you could use all those pointers above to put towards debt first, which is really what I should be doing. Ahem. I have checking and savings accounts with the same bank. I signed up for a program where it rounds up every debit card purchase and transfers that money into my savings account. It winds up being a few hundred dollars every year. As you’ve suggested, it’s super easy way to save.

  4. Great tips San! This is definitely a topic that we could all help each other with, I’m sure. My parents have been doing the $5 bill savings plan and it’s helping pay for their trip to Jamaica! It’s amazing how quickly that adds up.

  5. This is an awesome post! I love the 5 DM saving your dad taught you! What a wonderful idea! I might do that from now on! xxx

  6. Great list of tips, San! I have really focused on my finances the last couple of years and am proud of what I have accomplished. I am on track to have my student loan debt paid off in 3 years, which is huge as the grad school debt was HUGE. Once my debt is paid off, I will definitely change my paycheck so that my raise will go into savings. Right now, my raise is 100% going towards debt.

  7. I really love that idea of rounding up online purchases! That could even work for offline purchases – take the change handed to you, go home, and put it right into savings.

    I’m terrible with money because first, I’m still at home so I don’t have the pressure of too many bills (other than my credit card and the rent I pay my mom, which is flexible). Second, I consider my spending habits to be pretty good – I impulse buy, but never anything crazy – so I don’t budget… at all. It’s probably a habit I should develop while living at home so it’s not a huge wake-up call when I finally move out!

  8. Great ideas! I’m with ya, whenever I read one of those “10 things you can do to save money”Lists I don’t find much that applies to me.

    A few things I’ve started that helped:
    – go to Aldi more often (hello $1.79 wonderful asparagus!)
    – have a monthly savings goal instead of one big one (or break it the big one down into monthly installments)
    – Swagbucks: I usually get 1 or 2 $5 amazon gift cards through them per month by using them to search the web and they have coupons to print out for in store use (had a BOGOF Skintimate shaving cream the other day. Yay!) Here’s the link with my referral if you want to check it out https://swagbucks.com/refer/sannipanni
    – not going near a Marshalls / TJ Maxx
    – going through my closet and be aware of what clothes I own (also guilty of the oh-it’s-just-a-little-thing shirt at Target buying behavior)
    – go to the library or borrow books from friends

    Good luck!!! Are you guys saving for something specific?

  9. Great ideas, San! I’m definitely going to have to give some of these a try. :)

  10. Lots of great ideas, especially like the idea of putting loose change into a piggy bank.
    My hubby has been doing the “automatically transfer some of your income to savings” for a while now and it did yome in handy because we needed to buy a new car and we therefore had a lot of money already saved (originally we had started saving because a few years ago we had thought about moving abroad and started saving for the move and stuff).
    And my parents taught me to always transfer the interest you earn back to the savings. When I was still a baby I got some money from some aunt that had died and my parents put the money into a savings account. They always transfered all interest back and when I went to university (18 yeras later) I could easily pay my living expenses without needing to work. (well, taken into account that interest rates were a lot better in the 1980’s and 1990’s)

  11. Great list! Saving change is my favorite thing because it all sits in a giant jar on Andrew’s desk & we keep adding to it and it was going to be fancy dinner out, but now it’s getting to be more than fancy dinner would cost so we might have to do something really awesome with it, or use it to help pay for a trip or something. I also love the idea of saving $5 bills too – such a great idea!

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