saving tips?

[brazen]

I want to bulk up our savings some more, but need some idea's.

Any ideas on how to save more, or what method you use to save?

And should you still save while paying down util? I have heard conflicting theory's on that.

 

TIA

[Clarkfan2]

The only savings I would do is a 1k emergency fund and in a 401k up to the company match...while paying off debt. After the debt is paid off, then saving 3-6 months expenses would be in order followed by saving and investing 20% of your income as recommended by Elizabeth Warren in her book, "All Your Worth."

 

The break down of the 20% savings is 10% for retirement accounts, 5% for mortgage reduction--early payoff.. and 5% for your dreams. ie the trip to Europe,Alaska ect. I think this is a good strategy.

 

Dave Ramsey recommends 15% into retirement accounts.

 

I think Clark Howard recommends 10% into retirement.

 

 

One tip. Once you start contributing to a 401k you might start at like 3% or 6%. Just contribute your raise percentage the following year. Example you are contributing 5% and you get a raise of 3.5%. Once you get the raise contribute 8% to your 401k. Do this for a few years and you will be maxed out before you know it.

 

Now having said that keep this in mind as a general rule of thumb.

 

First do your 401k to the match about...usually 3-6%.

Then contribute to a Roth account

and if you have some left over continue to contribute it to the 401k until you max it out.

 

This strategy will work for most...unless you are a "high income earner". Good luck and you should be commended for seeing the importance of debt reduction and saving money.

 

Clark

[brazen]

Yes, we have a bit more than the 1k.

 

I have been reading "Debt Proof Living" by Mary Hunt.

 

In our situation its unrealisitc to have no debt at all, but as low as we can get it would be good.

 

DH is military, so we haven't started a retirement fund yet. I know that has to be the next step. Something like a Roth or something. He is eligable(sp) for a Thrift Savings Plan, but since 9/11 it has been losing money.

 

Thanks!

[Vaquero14]

Thrift Savings Plan, but since 9/11 it has been losing money.

 

I don't know what fund he is in, but everything I see on TSP shows pretty decent growth.

[Vaquero14]

We usually save 300-400 a month just by turning off unsed electric sources, managing water consumption, cooking dinner every night and making my lunch for work.

 

We also save about 80-120 a month by coupon clipping just for groceries. People behind us get annoyed sometimes, until they see a big fat 50.00 savings for our trip. Then the attitude changes to, how do you do that.

 

We have saved untold thousands over the years learning to do things ourselves. Computer repair, resodding lawn, car repair etc. It all adds up fast.

[caffeinekid]

Yep! We pack and eat leftovers for lunch and do the change jar thing where our spare change ends up in a little jar that gets emptied every couple of months. Last time it was $45.00, which we put into our son's savings account. We also use high efficiency VFD bulbs and keep the bigscreen TV unplugged when not in use.

 

Don't underestimate the value of credit card perks either. We have the CitiBank Dividends card that pays 5% on grocery and gasoline purchases and 1% on everything else. We charge our monthlies such as cell phone and cable, as well as everything else on this card since we spend about $800/month on groceries and fuel alone, not to mention the "here and there's" and (of course) we PIF when the statement comes. It's nice to pocket an extra $50+ every month. That money ends up equating to $600/year, which may not sound like much, but to us, it is like getting free cable internet every month. If it is applied to savings or debt, the benefit is unquestionable.

We have saved untold thousands over the years learning to do things ourselves. Computer repair, resodding lawn, car repair etc. It all adds up fast.

Excellent advice! It never hurts to be resourceful.

[CCK2006]

Thrift Savings Plan, but since 9/11 it has been losing money.

 

I don't know what fund he is in, but everything I see on TSP shows pretty decent growth.

<{POST_SNAPBACK}>

 

I agree, Vaquero. My husband began contributing to TSP when it first started, and has seen steady growth ever since.

[CCK2006]

I want to bulk up our savings some more, but need some idea's.

Any ideas on how to save more, or what method you use to save?

And should you still save while paying down util? I have heard conflicting theory's on that.

 

TIA

<{POST_SNAPBACK}>

 

Hi sgtalaska! We are also active duty military. Some things I've learned along the way are:

 

Have savings removed from your husband's paycheck directly through an allotment & don't have any easy access to that money (acct requires 2 signatures to withdraw, or an online bank like ING, etc.)

 

Our grocery bill is what kills us. So I've been making lots of casseroles and crockpot recipes. Also, I find the groceries last longer when mealtimes are scheduled as opposed to eating on a whim.

 

We use our cell phones for long distance calls...after 7pm so that it is free. We don't have long distance on our home phone.

 

We've found that we don't need digital cable because the channels we watch are on the basic plan.

 

I make the school lunches, rather than allowing the kids to have the school lunch.

 

Limit eating out.

 

These are just a few ideas to help you out in building that savings. Good Luck!

[lbjones]

I want to bulk up our savings some more, but need some idea's.

Any ideas on how to save more, or what method you use to save?

And should you still save while paying down util? I have heard conflicting theory's on that.

 

TIA

<{POST_SNAPBACK}>

 

One thing I like to do, but of course it helps to be obsessive about budgeting. I have a monthly budget. I look at that and decide how much I want to save (or pay toward debt) for the next month. Then on pay day, I take that much money and transfer to a different checking account (Patelco ). Then I pretend like that money isn't there all month, and do whatever I can to spend only as much as I have left. Then when I reach the end of the month, hopefully I haven't needed to touch the money and I can apply it to whatever my goal was at the beginning. But if along the way, something bad happens and I need access to the money it is still within reach.

 

Last month I was VERY ambitious, and I actually managed to make it through without touching the money set aside. So that's my strategy, wouldn't work for everyone but it is a fun game I like to play.

[Jenna]

I cut back on my expenses... ie. no cable, DSL, caller id, Netflix, big meals out

 

I fully fund my Roth by having an amount automatically withdrawn each month from my savings account. Each payday, I have a portion of my income deposited into that account to cover the Roth contribution.

 

I also set a weekly dollar amount to transfer to my ING savings account. I'm not yet ready to make that automatic, but I hope to be able to do so in the future.

 

I'm driving a car I payed off, and will continue to drive it for a few more years.

 

I currently save 16% of my income towards retirement + company's 4% match.

I'm trying to save another 10% for short-term goals (house.)

 

I don't pay a lot in interest on c/c debt since I keep it below 1k (or pay it in full.)

[brazen]

I went ahead and set up a ING account today, gonna have a direct withdrawl out of our checking, and see how that goes.

 

Sorry I had not looked at the last few months on the TSP, looks like it is doing better.

 

I am working out a budget to help with contributing more to savings and paying down util at the same time. The only utilities we pay are phone and cable, I have the cheapest plans on those. I have the cheapest plan on my cell also, I don't use it too much, but it is a must being up here alone in case the car break's down or what have you.

 

I do see where we can cut back on eating out though. I am bad about that. With DH deployed, there are a lot of night's I abhorr to cook, with kid's and homework and everything going on. Casserole's and crockpot's are gonna have to be my savior's I guess.

 

Thanks guys for all your input!!! I am on it, doggone it!

Edited August 3, 2005 by sgtalaska

[Boobila]

I Like ING because with a regular savings account I tend to save....and then use it for an "emerency", promising myself to put it back. Of course, I don't put it back.

With ING, at least the transfer takes two days or so, and I know I can't

get the money right away, so I don't even bother.

[gamine]

I do see where we can cut back on eating out though.   I am bad about that. With DH deployed, there are a lot of night's I abhorr to cook, with kid's and homework and everything going on. Casserole's and crockpot's are gonna have to be my savior's I guess.

<{POST_SNAPBACK}>

 

I hear you. We aren't crazy about cooking either, we're trying to work up towards freezer cooking - you take a weekend, and cook 30 dinners (or 15 meals in double portions if you don't mind eating the same meal twice in a month) and then freeze it, that's supposed to be a real help if you have kids. Right now we're just working towards doing every meal at home, before we invest in one of the freezer cooking cookbooks.

[hegemony]

I just got a nice raise and 100% of it is going into savings.

[BrwnEyedGirl]

Yes, we have a bit more than the 1k.

 

I have been reading "Debt Proof Living" by Mary Hunt.

 

In our situation its unrealisitc to have no debt at all, but as low as we can get it would be good.

 

DH is military, so we haven't started a retirement fund yet. I know that has to be the next step. Something like a Roth or something. He is eligable(sp) for a Thrift Savings Plan, but since 9/11 it has been losing money.

 

Thanks!

<{POST_SNAPBACK}>

We are active duty military and TSP has been great for us.

 

I don't do the coupon thing, I have tried it and always leave them at home. We shop at the commissary sometimes.

Edited August 3, 2005 by SDMuse

[CCK2006]

I just got a nice raise and 100% of it is going into savings.

<{POST_SNAPBACK}>

 

We do the same thing. Everytime we get a raise, we just stick it in savings. When we paid the car off, we just continue making the payments into our savings. Same thing with credit cards. I think its effective because you learn to live with less, might as well keep it going.

Edited August 3, 2005 by CCK2006

[brazen]

You know, that book I was reading advocates putting 10% of your net pay into savings. Does this seem realistic? Any of you guys put in 10% or more? I was thinking of starting out with a more manageable 5% and working my way up.

Edited August 3, 2005 by sgtalaska

[Keishala]

You know, that book I was reading advocates putting 10% of your net pay into savings. Does this seem realistic? Any of you guys put in 10% or more? I was thinking of starting out with a more manageable 5% and working my way up.

<{POST_SNAPBACK}>

 

I put 20% of my net pay into savings. It was difficult at first and I found myself dipping into it, but I haven't had to *dip* for at least the last 6 months.

[Clarkfan2]

10% seems high at first but it's not bad. You have to start somewhere maybe 3% or 6%.(Most people will hardly notice 5% if they are not on a budget) If you start lets say at 6%, for most Americans you are less than 2 raises away from 10%. The key to saving IMHO is found in the book, "The Millionaire Next Door" and that is to continue to live at your current income while putting increases into savings. In other words, don't increase your lifestyle with every raise you get.

 

As far as saving 10%, many in the money management section of this forum exceed it form 2x to 6x times. There are a couple of savings threads that you might be interested in reading for motivation. My personal motivation is that I one time read an article that stated that early retirees save 25-35% of their income. That motivated me to get on a savings AND INVESTMENT plan since I would like to retire early myself.

 

A written budget is probably the most powerful tools that will get your savings on track. Keeping track of every expense for one month is the biggest eye opener the budget conscious can ever have. It's difficult to track every penny but the savings of $$$$'s after having done so was well worth the time,effort, and energy--10-100 fold.

 

Having an overall plan for goals,dreams, and what one wants in life will help to channel your energy towards those things. An overall strategy or lifeplan will help to really focus ones intensity in the budget to accomplish the stated goals.

 

Clark

Edited August 3, 2005 by Clarkfan2

[Q]

As of this month I dropped my 401(k) contributions to 10% and by the end of the month will be spreading 20% into savings splitting between long term and short term. I am still formulating the plan and paying off the majority of my CC debt which is small, but big to me.

[astrologa]

save up 6 months worth of full living expenses incase you lose your job, etc.. that's usually a good rule of thumb

[gamine]

I agree with ClarkFan about "Millionaire Next Door"... the book is worth buying, and rereading ... it helps to read about people who have been extremely frugal and successful about increasing their net worth, yet who are not in high-salary professions. (In fact, a big subtext of the book is that if you are a lawyer, doctor and so on, you're actually more at risk... I'm sure a lot of CB people know the book, so I'll leave it at that!)

 

If you like books, you might see if you can buy a used copy of "How to Invest $50-5,000" by Nancy Dunnan, as she talks about putting away small amounts of money, when you can't afford to save big bucks right away.

[sboram24]

My suggestion, and it may sound mundane but it helps me is, at the end of each day, take your lowest denomination bill in your wallet/purse (ie $1.00, $5.00 etc), whatever it may be, and set it aside. I usually put it an envelope and stash it somewhere safe. Some days, the bill is only $1.00 others it's $10.00. It really adds up. I label the envelope with a date sometime in the near future, say a month, and then on that date, I take the envelope to the bank and deposit it into my savings.

 

I'm a very visual person, so I work better see my money accumulate rather than numbers on paper. Seeing the dollar bills accumulate in that envelope motivates me to put more. Sometimes, I put two of the lowest denomination bills.

 

It's the little things.

[Jenna]

I currently save 16% of my income towards retirement + company's 4% match.

I'm trying to save another 10% for short-term goals (house.)

 

that's 26% of my gross income

[tootie357]

anyone take extra funs and place into principal payments on the mtg?