SPECIAL FROM Grandparents.com
Think you can’t save? Think again! Sure, it seems like there’s not much wiggle room in your budget, due to the rising costs of basic necessities—but that’s all the more reason to have a slush fund. Fortunately, there are plenty of painless ways to siphon cash from even a fixed income.
Start slowly, but do start; those money seeds will blossom into an extra layer of financial security. That sure beats wondering if you can really afford to put a $20 bill in a grandchild’s birthday card.
Easy does it Start small with these basic tips:
1. Change in a jar. The old standby of saving all your change in a jar? It works. Sure, it might be only $10 a month, but that’s $120 a year that might otherwise have ended up in vending machines or those “take a penny, leave a penny” dishes.
2. Save your coupons. Many stores print “You saved X dollars” on the receipts. But it’s not savings unless you save it, so transfer that amount—immediately!—into your bank account.
3. Save your raise. If you’re still working and were lucky enough to get a pay increase, pretend you didn’t. Bank it instead.
Challenge yourself Once you've started taking little steps, you'll be ready for more advanced strategies, like these challenges:
4. Dollar bill challenge. When you get home from work or running errands, put all the $1 bills from your wallet in a jar. (Some people do this with $5 bills, but that’s too rich for my blood.)
5. Random number challenge. Pick a number, then check your wallet nightly for bills whose serial numbers end in the digit you’ve chosen.
6. Weekly challenge. Actually a monthly challenge: You put aside $1 the first week of the month, $2 the second week, and so on. You’ll end up with $10 to $15 per month. Not bad!
7. Calendar challenge. Put aside $52 in the first week of January. The next week, $51; the week after that, $50. And so on. This smarts at first, but keep your eyes on the prize: the $1,378 you’ll have amassed by the end of the year.
Use your bank Use your bank's services to turn hard-earned cash into even more money:
8. Automate your savings. The easiest thing ever: Set up an automatic transfer from checking to savings each month. Better yet, transfer from checking into an online savings account, since you can’t dip into on a whim.
9. Designate your dollars. Some banks let you set up sub-accounts and give them specific names. It might be “Slush Fund” but it could also be more specific, such as “New Car” or “Reunion Trip.”
10. Keep the Change. This Bank of America program rounds debit-card purchases up to the next dollar and then transfers that amount from checking into savings. For example, if you pay $37.03 for groceries, 97 cents would go into savings. Easy, huh?
11. Password protection. Turn your PINs into reminders. For example, when you sign on to your favorite shopping sites, maybe having to type “jan92015”—the due date of your first grandchild—would remind you that setting up a college plan would be more rewarding than a new blouse.
Access apps and websites The internet is full of programs designed to help you save:
12. Get a cash rewards credit card. Use it to pay for everything you can – groceries, utilities, gym membership – and bank the cash rebates. Look for the best cards at sites like NerdWallet or CardRatings.com.
13. Save impulsively. Tempted by an unnecessary purchase? Talk yourself down, then enter the amount of money you might have spent into a free app called ImpulseSave. That money will be transferred into savings. 14. Take surveys. SonyaAnn, who blogs at A Mom, Money and More, belongs to a few online opinion sites. Last year she earned $123, and also got some products to test. She does it waiting for the laundry to finish or watching TV with her husband.
15. Discount your purchases. Buy discounted gift cards on the secondary market for items you need most often. Suppose you buy a $50 Walgreens card for $44 and a $100 PetSmart card for $87. Immediately transfer $19 into savings and use the cards like cash. Discounted gift cards are available for just about anything you need; check GiftCardGranny for the best deals.
Play mind games Break behaviors by fooling yourself:
16. Bill yourself. You meet your monthly obligations on schedule, right? Make “savings” a bill, then pay it. Tip: Use the “bill reminder” feature of a budgeting software site like Mint.com or PowerWallet.
17. Get a savings buddy. Suggest that a friend or relative join you in the slush-fund goal, then chat or e-mail each week about your progress. You might even make it a challenge, i.e., whoever saves the most has to buy lunch.
18. Symbolize your savings. Suppose you or a spouse will retire in 2016. Transfer $20.16 cents into savings every month (or every week). If that class reunion takes place in June 2017, set aside $23 (six plus 17) every month/week to help defray the cost of attending.
19. Hide your dollars. Set up your slush fund as an online account; the few days it takes to transfer money is a built-in cooling-off period. (Do you really need that whatever-it-is?) Or, open it at a bank way across town and don’t get a debit card. Having to drive and fill out a withdrawal slip should help you re-think purchases.
Transform your routine Take a look at those little, repeated behaviors that could actually be costing you a ton:
20. Change an unhealthy habit. Do you smoke? Quit! Then set aside the money that once went for tobacco. In the habit of driving three blocks to pick up a prescription or a quart of milk? Walk instead—you’ll save money (gas, wear-and-tear) and get a little exercise to boot.
21. Change a fun (but pricey) habit. Do you meet friends at Starbucks a few times a week? Replace those meetings with a pleasant stroll or an at-home kaffeeklatsch. (Take turns hosting) Do you and your spouse give in to the “early bird special” too often? Instead, look for new recipes and prepare them together. You don’t have to give up good times—you just have to re-imagine them.
Designate your change A penny saved is a penny earned. These tricks make the most of your change:
22. Round it up. Still use a checkbook, or a paper register to balance your online account? Record that $72.19 electric company payment as “$73” and turn the $35.27 supermarket bill into “$36.” Do this all month with both checks and debit purchases, then transfer the differences into savings.
23. Swipe a few bucks. The day before payday/Social Security deposit day, check your checking-account balance. If there’s $139.95 in the account, send $9 (or $39) into savings.
24. Found money = fund money. Any unexpected cash (rebate checks, the quarter you found in a parking lot, etc.) goes into savings.
More sneaky tips And if you really need a boost...
25. Launder your funds. Every time you do a load of wash, put $2 in a jar. (I do this, and it really adds up.) Oh, and let your family know that any money found in their pockets is now your money. Or, rather, the fund’s money.
26. Pay it forward. Finally made the last car payment? Keep writing that check – or, rather, transfer the amount into savings each month. Not possible? Transfer half the amount.
27. Reward yourself. Some people have a “swear jar,” putting in a quarter every time they let a choice word fly. But why not a “Yay you!” jar instead? If you decided not to buy an ice-cream cone at the mall, put a quarter in the jar. (Better yet, put in the cost of the cone.) Chose to wait until “Senior Monday” to see the latest blockbuster movie? Made dinner instead of going out? Yay you! Now: Pay you!
Donna Freedman writes about midlife and money at DonnaFreedman.com.