Family Savings Advice
Tips and suggestions for racking up savings.
By Ellie Kay
The key to making ends meet in this economy lies in reorganizing your spending plan. I know, it’s the dreaded “b” word. But nowadays, if you’re not working under a budget, you’re headed for trouble. And if you are under a spending plan, it may be time for a major budget overhaul. What worked last year may not work this year.
Try using the 10/10/80 Budget™. It’s simple to use and adjustable for your unique financial needs. Here’s how it works.
Ten percent:
Give generously. If you want to regain control of your budget, then here’s your first big test. You need to commit the first 10 percent (which is a tithe) to your community, charity or church of your choice. This is the law of reciprocity and it opens your finances to flow freely and have it return to you.
Ten percent:
Save diligently. This is where you pay yourself; it’s a critical part of living a full financial life. Allocate this amount from your paycheck before you even see it. A portion may go directly to your savings account and/or your Roth IRA. If you never see this money, it’s a lot easier to adjust your spending levels to live within your means and still pay the bills.
Eighty percent:
Spend wisely. It’s difficult to say which of these three categories is the most challenging. For some, it may be giving away that first 10 percent. They’re just not used to that kind of generosity. For others it may be saving the next 10 percent, as they always seem to dip into that account to pay a bill. But in my experience, this final part of the budget, the big spend, can solve the other category problems if you spend smarter and live within your means.
Set your Spending Plan
Make sure your budget will match your current income and allow you to pay all your bills. The most important aspect of a budget is that you tailor it to meet your needs and keep it organic, or changing enough to meet your needs. Or, you might realize you need to save money in certain categories because your previous budget might not be working. You may need to cut your food bill or shop around on insurance to arrive at a workable plan. Once you’ve given your finances a complete reorganization, you’ll find that your bills are getting paid, your savings is getting funded, and your giving is generous.
Closing the Gap
You can make changes in your budget and lifestyle to help close the gap between what you make and what you owe.
Stealthy Savings
The next time you’re shopping clearance racks at your favorite clothing store in the mall, don’t let the wrong size on the rack become a deterrent to saving. First, ask the sales associate to check the back for your size. Many stores do not put all their clearance items out front. Sometimes they are stealthily hidden in the back stockroom. Secondly, if they do not have your size, ask them to check another store, give you the sales price, and ship it for free. More and more stores are starting to offer this service in order to compete with online retailers.
Wealthy Savings
One way to rack up major savings is to find the hidden savings factors and combine them in the grocery store. Learn to add layers of savings such as store sales, coupons, double coupons, cash off your next shopping trip, store coupons and more. A great Web site that does the work for you is www.couponmom.com. According to the USDA cost of food at home, in 2008, the average family of four spends $7968/year on food and by following these tips can spend in the thrifty category of only $4068/year — that’s an annual savings of $3900.
Wise Savings
Why pay more when you don’t have to for eating out? If you want to try out a new restaurant, but you don’t want to pay full price then go to Restaurant.com, a site that issues coupons and gift certificates for more than 6,000 eateries around the country. My husband and I pick a spot, and we pay $10 for a $25 gift certificate online. This saves us more than 50 percent in the process. We also go to www.entertainment.com to check out the coupons for our own city and cities we frequently visit on business. We’ve saved hundreds of dollars on hotel rooms, restaurants, theater and sporting event tickets and even spa treatments.