Advertisement

Money: You earn it, so why not save it?

September 07, 2007|By LYNN LITTLE

Money: Most people need to earn it, everyone seems to enjoy spending it, and it is also important to build wealth by saving it. Many people think saving is difficult or that saving feels like they are depriving themselves. Often, money can be saved by doing something differently, rather than doing without.

Building wealth takes time and every little bit helps. If you can save small amounts of money on a regular basis, you will build wealth.

Think of savings and building wealth as "paying yourself." Treat paying yourself as one of your regular weekly and/or monthly bills. There are lots of people who want your money; however, it is important to keep money in your possession. The Pay Yourself First strategy helps you do that. Paying yourself first is a wonderful way to start building wealth, and it feels better than always paying someone else first.

How do you save a dollar when you feel like you don't have a dime to spare? When it comes to savings, small lifestyle changes can lead to big savings.

Advertisement

· Save change in a jar - 25 cents a day equals $91.25 a year.

· Buy generic or larger quantities - $5 every two weeks equals $130 a year.

· Pay bills on time to avoid late charges - $10 a month equals $120 a year.

· Substitute a glass of water for one can of soda per day - 75 cents a day equals $273.75 a year.

· Bring your lunch to work two times a week - $6 a week equals $312 a year.

For more ideas on ways to save money, visit http://www.pueblo.gsa.gov/cic_text/money/66ways/index.html and view the publication "66 Ways to Save Money." If you would like a printed copy, send a self-addressed, stamped, business-size envelope to Maryland Cooperative Extension, Washington County Office, 7303 Sharpsburg Pike, Boonsboro, MD 21713. Mark the envelope, "Savings."

A savings account for emergencies is an excellent first savings goal. Grandpa's advice to set money aside for a rainy day is still sound financial advice. Even with interest rates at an all-time low, saving is still important to decrease debt. For example, if a $1,000 emergency occurs, and you have no savings to cover it, you might put that expense on a credit card. If you plan to repay the loan at $92 per month, the total cost of that $1,000 loan at 18-percent interest is $1,104. That's assuming you stick to your payment plan and don't add any additional charges to that account. If you extend the payments longer, it will cost even more. Taking that $1,000 expense from a savings account that earned interest is a financially sound method that will use less of your money. For a better understanding of the cost of credit, visit www.bankrate.com and click on calculators. You will find calculators to help you determine the consequences of paying the minimum on your credit card, the real cost of debt and what it will take to pay off your credit cards.

Building wealth starts when you set a goal and make a plan to reach that goal. Whatever goal you choose - whether it's buying a car, buying a house or getting out from under your debts, you will be two times more likely to be a successful saver if you have a specific savings plan. An easy way is to pay yourself first each month (or week)! Grow your money into wealth that will work for you. To learn more about savings, visit the America Saves Web site at http://www.americasaves.org and click on savings strategies.

Lynn Little is a family and consumer sciences educator with University of Maryland Cooperative Extension in Washington County.

The Herald-Mail Articles
|
|
|