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Savings Strategies for Non-Savers

The following is a guest post from Little House in the Valley.  I really enjoy her style, so check it out!

Growing up in a frugal family that saved a small fortune on a conservative fireman’s salary, one would think I’d follow in these similar footsteps and end up the ultimate uber-saver. Not so; as life would present too many tantalizing baubles and opportunities to spend my hard-earned money on. I could blame my deprived childhood, due to extreme frugality, on my poor savings habits and psycho-analyze my behavior as trying to make up for things I missed out on as a child. But let me be realistic and honest; I let spur of the moment opportunities seize my usually money-conscious brain and talk myself into freak lapses of budget-blowing insanity. Instead of sticking to my guns and meeting my saving goals, at the end of year I look at the paltry amount I’ve accumulated, and vow to do better.

This year I’ve come up with a plan to meet those goals through some extreme, at least for me, strategies. Some of these ideas I’ve gleaned from reading personal finance blogs, others I’m making up as I go and I’ll review their effectiveness at the end of the year based on if they saved me money or just wasted my time.

Savings “Bins”

I currently have 3 different savings accounts with small amounts in each and think this is because I haven’t really labeled most of them for specific purposes. Although the one I’ve labeled, “sister’s wedding fund”, I’ve found that I’ve been quite diligent in sticking a set amount every month in that savings account and keeping my grubby little paws off of it since it has a particular purpose. Obviously, this method is working for me. Now all I have to do is label the other two accounts and set a specific monthly savings amount.

I’ve decided that the one I can get to most easily needs to be my slush fund/emergency account. My goal for this account is to continually keep at least one month’s total amount of bills. However, the hurdle with this account is because my income fluctuates from month to month, I sometimes need to dip into the slush to pay for upcoming bills. I’ll have to review this account over a quarterly period instead of month to month.

The online savings account that is a little more difficult to touch will be my long term savings account, or “house” account. Since one of my big goals is to own a house within the next 3-5 years, I need to devote as much money as I can to this account if I ever want my dream to materialize. A realistic goal is to set aside double what I’m already depositing. This will be the tricky part as I find myself coming up short of this past year’s savings amount.

To meet these savings goals, I’ll have to really reign in my budget and find out where it’s “leaking.”

Finite Gift Cards

A few of the “leaks” I’ve noticed include over-spending on our daily habits. These habits appear to be budget-breakers, so to help me reduce over spending, I’ve decided to use a couple of strategies:

  1. A pre-determined and limited gift card
  2. A Starbucks card

My Starbucks Gold card can be loaded at the beginning of the month with a set amount on it. Instead of loading it whenever it runs out, I will load it on the first of the month and when it’s gone, then it’s time to make my own drinks from home. Setting a pre-spending limit will keep that part of my budget intact.

The next part of the budget that needs some work is my husband’s habits. Instead of letting him swipe his debit card whenever he needs a pack of cigars, he’s going to be given a finite gift card that I’ll load on the first of the month. He’ll have to make that baby stretch for the entire 30-day period.

Setting finite amounts at the beginning of the month should plug up the holes I’m finding and allow me to save enough for my “house” fund.

Go, Cash, Go

Another leak I’ve noticed is the amount of money we spend eating out, even at fast-food places. A few dollars here and there never seems like a lot at any one time, but those dollars begin to add up and all of a sudden it amounts to a large portion that could have been stuck into my emergency fund.

To fix this leaky sieve, meals out will have to be cash-only. Since I’ve already budgeted a portion of my monthly income towards meals, this amount will be set aside in my Mason jar at the beginning of every month. When the cash runs dry, bye-bye McDonald’s cheeseburgers.

Overflow Buckets

Since I use Quickbooks to track my spending and income, I noticed that I made a few thousand dollars more than what I had originally budgeted for the year. But darned if I can’t find that extra amount I made! Where, oh, where did that extra cash go? It seems to have evaporated into the abyss of the colorful pie charts that track my expenses and income.

This coming year, with a few safe-guards in place (finite gift cards, cash, and purposeful savings accounts) this overflow of income should end up in my emergency fund at the end of a fruitful month. Since the “house” account, “sister’s wedding” account, and the “ER fund” account will already be set aside at the beginning of each month, any extra savings at the end will be moved to the ER fund. That way the overflow of cash will be saved and not spent.

Group Support

Finally, without anyone keeping tabs on me, I might quickly revert back to my old-self. Posting monthly or quarterly updates on my progress for each of these tactics will help keep me following my own advice. Hopefully by mid-year I’ll notice a huge improvement in my savings accounts.

Would these tactics work for everyone? It depends on how budget-conscious one is and if one is willing to keep track of their income and expenses diligently. Will these strategies work for me? I’ll let you know by mid-year.

Crystal’s Question:  Do you have any tricks you use on yourself to save more?  I cut out coupons (like the V8 Fusion coupon mentioned in that post).

FYI:  I worked at a dead end cubicle job from 2005-2011 for about $30,000 per year.  I went self-employed in July 2011 and make between $70,000-$90,000 through blogging, professional pet sitting, hubby's reffing, and our rental home.  If you’d like to start your own site (link to my free step-by-step guide), I highly suggest checking out Bluehost (my referral link with a nice discount for you, PLUS a free custom header banner from me!).  Please contact me any time at budgetingfunstuff*at*gmail*dot*com with questions or just to brainstorm! I’d love to help!
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24 thoughts on “Savings Strategies for Non-Savers

  1. I like the idea of pre-loading the Starbucks card. It’s good to give yourself this luxury occasionally, and by pre-loading a set amount, you can be certain that it remains a luxury, and not a habitual necessity. Good idea!

  2. Keep your eye open for gift card deals too. Quite often you can get something for free if you purchase a gift card of a certain amount.

    You do need to have indulgences, but putting limits on them is a good idea. Hopefully you will have your Starbucks card past the first week of the month. 🙂

    It is so hard to balance living and saving. For instance, from the outside, it is so easy to say ‘dump the cigar habit all together’. However, I am sure that is something your husband really enjoys, and who am I to take that away from him. Just like I don’t want anyone taking my chocolate away from me. However, it depends on how desperate circumstances are. Obviously if you didn’t have money for rent, they would have to go. But, as long as things are covered, indulgences are ok, as long as they are within reason.

  3. @LifeAndMyFinances – The pre-loaded Starbucks card is working out great so far this month. 😉 I find I’m making my coffee myself more than I thought I would so I don’t run out of Starbucks funds.

  4. @Everyday Tips – I only wish my husband would cut out his cigar smoking. He’s been talking about wanting to quit, so perhaps one day (it would equate to a huge savings! And better health in the long run.) I agree with the indulgences, as long as they are healthy. So far, coffee hasn’t been said to be completely unhealthy so I’m sticking to my Starbucks for now – and the pre-loaded card is working out really great!

  5. You’ve got some great Ideas little house. I can resonate with you about spending too much on daily habits. It seems like I always try to cut things back, and they disappear for a while, but then slowly start to creep back in, to the point where they are higher than they were before.
    I think your gift cards are a great idea (one that I may look into)! I think that it could work out very well, except could cost you some money if you order a drink and the gift card wont cover it all.
    It’s also refreshing to see someone being realistic with the budget & daily spending. some people in your situation would say “im going to bring my own coffee every day and cut out the starbucks” – Odds are, that’s totally unrealistic, and they’ll end up failing and feeling bad about it. You decided to cut back to a predetermined level instead.

  6. We have two savings account. The reason we have two is because they allow us to get free checking. We have an automatic withdrawl from 1st checking account of $25.00 a month so will slowly build up. Mainly part of the emergency fund.
    2nd bank account was opened because with an automatic deposit every month we would receive $150 bonus after 3 months. Just received that and it is part of a starting emergency fund. There also is an automatic deposit every month of $5.00 to savings. Small for now as we pay off some debt.
    These are two ways that we are forced to save some. My new strategy is to attempt to not spend all my grocery budget weekly and put the remaining money into savings. If I have money I spend. We deal on cash on for food, gas and entertainment.

  7. My trick, if you call it that, is I carry no cash! If I have cash in my pocket, I find it easier to spend. For example, I might have more difficulty passing on a vending machine. This works for me because I think about my credit card purchases. My other trick is avoiding the mall.

  8. Oh, eating out! We love eating out, we love take outs. And it is our biggest expense. We definitely need to trim it… but will we? That is a question I am afraid to answer. 🙂

  9. I tend to buy my fun in bulk. Around here if you get 10 of something, like movie passes, you get a discount, so I buy that and ration it for the year. It does work pretty well and I usually get a little break on the cost. I categorize annual memberships to places in this way too.

  10. @Jeff – I actually haven’t gotten around to my gift card idea yet. Although my Starbucks pre-loaded card is working great. I think I might even have money left over next month!

    @Grace and Robert – The automatic withdrawals are a great way to save up money. I have to do it this way, or I end up with nothing left over at the end of the month.

    @Krantcents – I normally am not a cash person. However, this year I thought I’d try the cash envelope system and I’m finding I’m not very good with cash! I think I’m going to have to go back and rethink the whole cash thing. 😉

    @Aloysa – I budgeted a set amount this month and so far we’ve almost met that amount -and it’s only the 19th. 🙁 The take-out meals add up so quickly!

    @FirstGenAmerican – That’s a great idea. I hadn’t thought of that. I’ll have to look into some bulk fun!

  11. I give myself a strict budget every week. Sometimes I just make myself use cash, and never a credit card. I allot $50-60 bucks per week for lunch, and if I overspend one day, I make myself eat McDonalds the next to compensate.

  12. The easiest way for us to save is to use cash for groceries, gas, toiletries, clothing, and diapers/wipes. I find that I want that money to stretch, and the thrill of having left over money at the end of the month is worth stretching, using coupons, and just wanting to come in under budget!

  13. The Starbucks card is a great idea. We do this with our kids cell phones but it makes so much sense to expand on it like that. My kids get a set amount of minutes at the start of each month. When they run out they run out!
    I do a weekly check in which means I update my spending every Monday. The less I do the ‘check-in’ the more I spend.

  14. I bet you’ll do well with these strategies. I don’t really have any tips to add besides the obvious: pay your savings first, and view them as untouchable except for their stated purpose.

  15. Little House, you have some good strategies and I hope they work out. In defense of cigar smokers, may I suggest that Mr. Little House purchase by the bundle at places like Cigars International and JR Cigars. Both have good, easy-to-navigate web sites. Buying online saves on the sales tax and the prices on good hand-mades are easily half of the price in cigar stores.

  16. How things have changed! Now your paycheck is direct-deposited and you charge most every expense. You don’t have a clue how much money you have in your wallet until you find yourself at a place that doesn’t accept credit cards. This emotional separation from your money makes it much easier for you to spend more. Try using more cash for a while and see if your expenses go down. Handing over five twenties is much harder for most people to do than charging $98.47 on a credit card.

  17. Saving money is extremely hard, especially for consumers. Consumers who save money will often be tempted to spend it in my opinion – Nichole

  18. It’s extremely hard for consumers to save money, especially in 2011. I like the paragraph on the saving bins. It may be the most beneficial option for consumers wanting to save money.

  19. I have extra money deducted from paycheck and put towards taxes. We typically receive about $5-6K a YEAR back, every year. When we get a raise, I add to it. It’s nice to have a large chunk returned to you at the end of the year. We’ve paid for European vacations for a family of 4, bought new computers, bought an extra used car… Large windfalls at the end of the year is best for us. It comes out automatically and no matter how much we beg, they don’t give it back till the end of the year! lol I know, savings accts would be better, but I haven’t found one yet that I can’t get into and use up for a “just gotta have”. No interest earned, but also no money frittered away and at todays lousy interest rates, not a big loss to us, for the knowledge we will have definitely a certain amount back.

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