Monday, September 8, 2014

My Thought for Today: Saving for a Rainy Day

Remember the cliché Mom and Dad use to tell you when you were a kid and perhaps even as you grew into a young adult:  "Make sure you always put a little something away for a rainy day". 

This cliché is homegrown and has been passed on from generation to generation, for many years.  That little something we call "money" is very important and depending on how much of it we earn, truly dictates, how much we can spend.  One thing I know for sure, is that we all want to learn more about how we can save money.

With so many obligations and responsibilities, it's getting harder and harder to put any amount of money away for a rainy day.  I'm a living witness to this because I try desperately, to save a little money from my earnings.  I've tried a lot of ways to save but truthfully for me, I just fall short sometimes. It really requires discipline.  That's the hardest part. I have to be honest, out of the 5 ways to save that I've listed below, the one that has worked best for me is the photo up top, the good old faithful piggy bank! Yes, the coins may add up slowly but they do add up and in the end, you will surely have "something for a rainy day".

Remember this, there are no qualifiers or requirements that say how much money you have to save. That's strictly up to you and your purpose. The idea here is to start small and save something!

My Best 5 Ways to Save

1.  Open up a Christmas Club or Holiday Club account that your bank or credit union may offer.  This is something I learned from my Mom at a young age that has followed me into adulthood.  She would always open up a Christmas Club account for herself so her and my father would have money to purchase Christmas gifts.  The bank would always issue the money that was saved just before the Thanksgiving holiday and right in time for Christmas shopping!  This type of savings effort keeps you disciplined also because you cannot withdraw the money once you deposit it.  You have to close the account or wait until they issue you the check in order to have the expendable cash.  Every financial instituition is different, so make sure to check out the requirements with your banking establishment regarding this type of savings plan.

2. Have an Allotment directly deposited into your savings account from your paycheck. This is a great way to save because you never see the actual money in your hand or in your check.  It is withdrawn from your earnings and deposited before you receive your paycheck.  If you don't see it, you won't miss it. Decide on a comfortable amount you can afford to have taken out of your check weekly, bi-weekly, or monthly and don't think about it anymore after you set the plan up.  Review your bank statements when you receive them and trust me, you will be totally surprised of how quickly that money will add up and how much money you can save, effortlessly. 

3.  Another way to save is what I call Trade Off saving.  This type of savings will cost you a small portion but you will save a larger portion in the long run.  Everytime you get paid, for a small fee, purchase a Mastercard or Visa Gift Card.  American Express gift cards, may charge a higher fee, so you will need to verify that to be sure.  Although there is a fee for purchasing these gift cards, the trade off is that you will still save. For example, if you purchase a $25.00 gift card and it cost you a $5.00 fee to purchase it, then you have still saved $20.00 overall in your budget but you have the actual card in hand that has $25.00 available on it!  Also, when you have gift cards available, you tend to spend less than if you had cash in your hands.  Many times, these gift cards do not expire, but check to be sure.  You can also keep track of your spending better, because each time you purchase something with the gift card, you can request a receipt that will indicate the balance remaining on the card.  Purchase a gift card each time you get paid and allow yourself a way to pace the "way you save" and the "way you spend your money".  Before you know it, you will have a stack of gift cards that you can use in lieu of using your actual cash on hand!

4.  Here's an easy way to save, that adds up quickly!  I call it Envelope saving.  Take a small white envelope and put it in a safe place that you will remember where you put it at.  Each day, no matter what, place a one dollar bill in that envelope before the day is over.  At the end of the week, you will have saved $7.00.  That $7.00 saved times 4 weeks in that month will equal to $28.00!  Depending on the amount of days in the month, your cumulative total for each month may vary more or less, give or take one or two dollars.  However, in the end you are truly saving some good money and probably will not feel like you are saving at all!  This type of savings requires discipline.  Do it, forget about it and watch your money grow.  Oh yea, buy a box of envelopes because you will need them to store all of that money you will be saving!!

5.  The Piggy Bank!  This way of saving has been around forever.  The difference is that, your "piggy bank" may have been a jar or a large empty water cooler bottle!  Remember that, back in the day?  I use to save my money in a tootsie roll can after I ate all of the tootsie rolls!  Sometimes, I would use an old coffee can my parents had left over after the ground coffee was long gone.  So, bottom line, drop that extra change, everyday, into whatever you call your "piggy bank" and watch how heavy that "piggy" gets in weight and in savings!