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Saving that Doesn’t Make you Squirm

Posted on February 25, 2014
By Nikki Martinez

Right under Jesus, Me, and his family, the hubby could probably spend every day talking to Dave Ramsey. I promise you, Nathan’s not a crying guy, but I have a feeling he would probably shed a tear of joy if he met the man! And yes, I would at least take a mental picture of that moment. It’s not that he’s a uber-fan or anything, but Nathan feels there’s a lot of wisdom he’s gained from listening to his Financial tips, practices, and tools, and would enjoy getting the chance to say, “Thanks.”

If you’ve never heard of Dave Ramsey, then one of 3 things may have happened:

  1. Your church has never done anything with the Financial Peace University classes
  2. You don’t deal with any of your finances
  3. You don’t want to do anything with your finances…because the idea of saving and such scares you. 

Whether you know who Ramsey is (not to be confused with the chef that yells) or you fall at number 3 of the list above, a fresh look into your finances couldn’t be a bad thing. In fact, writer and financial expert Michele Lerner wants to help bring about that new perspective with a few tricks-of-the-trade in saving, which could be simpler than you expected.

 

1. Find a way to save every day.

Everyone can find one thing they can save money on every day, says CPA and financial expert Clare K. Levison
“If you have a closet full of name-brand clothes and shoes, you should realize that if you have self-confidence and style, you don’t need to accumulate all these clothes,” says Levison. “You don’t need to look frumpy, either. A $15 sweater from a sale rack or a consignment store can look just as good.” Skip the designer clothes — or find other simple ways to save, such as, say, renting a DVD instead of going to the movies — and put the saved cash in a jar. “Just seeing the cash add up in one week makes you believe you can really start to save money,” Levison says.

2. Start an automatic savings plan.

After you’ve begun the process of saving a little every day, Levison recommends transferring money out of every paycheck into a savings account. She suggests saving 20 percent of every check, but since that’s a lot to tackle all at once, she says you can start with a smaller amount and reassess every three months. “Gradually work your way up to 20 percent,” says Levison.

One caveat: If you have debt, Levison recommends only establishing a $1,000 emergency savings fund rather than funneling all your extra cash into a savings account. “Split the money you would be allocating to savings 50-50 between your debts and building that $1,000 fund,” she says. “Once that’s established, put every extra dollar toward eliminating your credit card debt.”

3. Make a list of goals.

Levison recommends writing down a list of your priorities, such as saving for a new home, starting your own business, remodeling your home, or buying a nice retirement condo in Florida. “Having goals that are exciting to you makes it easier to stay focused,” says Levison. “Your savings should go to things that are a good long-term investment in your future.”

For a short-term goal like saving for a vacation, Levison suggests finding a way to carve out extra money from your entertainment budget by cutting back on things like eating out.

4. Find a way to increase your income.

Sell your stuff on eBay or Craigslist, says Levison, and you’ll simplify your life as well as bring in extra income. Do contract or freelance work in addition to your regular work, offer singing or music lessons or tutoring — anything to generate extra money. “Any extra income should go directly into your savings,” she says.

5. Become a bargain hunter.

Get in the habit of seeking out the least costly options in every way, both big and small, says Levison. “Start small with things like buying generic medicines and then adding the difference in cost to your savings account,” says Levison. “Shop for deals and stay in a less expensive hotel while on vacation. When you get into larger purchases like cars and a home, your habit of choosing less expensive items will filter through into all your choices.” Levison says learning to trim your spending will free you to build a savings safety net and to accumulate long-term financial stability.

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