How do you save your money?

This post over at Get Rich Slowly has drawn a lot of “me too” comments and a lot of flack for the idea being stupid. Intrigued? The guest subject pays her bills, then if she has any extra, she shuttles the money right into a savings account so she isn’t tempted to spend it.

Easy-peasy, right? But how many of us do it? I won’t ask for a show of hands.

I save money several ways:

  1. I have savings accounts set up with ING Direct for an emergency fund as well as Christmas, vacation, my child’s school tuition, summer camps, etc. Mr. Cheap has his own “fun money” account there too. Every month, those accounts reach into my checking account and automatically transfer set amounts into savings. It’s like another bill and I never miss it.
  2. In addition to a basic emergency fund deposit, long ago I started depositing $1 a day into my emergency savings account. Each week, that account pulls $7 into savings. I don’t even notice a transaction of that size. But in the 19 months I’ve been doing it, I’ve effortlessly saved $532, plus another $20 or so in interest over that time. $550 that feels like nothing … isn’t nothing.
  3. I save change in a change jar. When the jar is full, I turn it in at Coinstar. I use the receipt to pay for groceries (the machine is at the grocery store), but then I transfer that amount to my savings account.
  4. I sock away extras. If I get paid for extra work, or sell something on eBay, I transfer the money into savings. We sold some of my daughter’s old toys this fall for big bucks. She got part of it to invest in new toys and her own savings. I put the rest aside to buy her a new mattress, something she really wants.
  5. From my business, I put 25% of each and every client payment into a savings account. I have to pay self-employment tax and quarterly estimated income taxes. This amount more than covers what I need to pay, which means that it leaves a nice cushion for months like this one, when an invoice got lost and a client paid late. Plus, no freaking out at tax time if I earn more one year — I’ll have the extra to cover a tax bill if need be. (When I started out and didn’t yet have a child and a mortgage, I was able to set aside 50% of each check — and at year’s end, paid off my remaining student loans in a lump sum.)

A new tool to try

I’m thinking about adding one more method. I’ve been observing myself using shopping self-restraint lately … and thinking about some big home improvements I’d like to make. I’m thinking I should make note of the small purchases I don’t make — maybe a latte, maybe an item of clothing, maybe a little something at Target — but could probably afford, or would normally buy. Then I could tally up those totals over the week and transfer the amount to an account for fixing up other areas of life. I think it just might provide the motivation to hone my attention to purchasing even more.

I’ve heard of people getting aggressive about grocery savings and then taking the “you saved $xxx today” amount from their grocery receipt and transferring it to savings.

One could do the same thing with thrift store purchases — add up how much you might have spent and pay it to yourself instead.

What do you do?

What are your little tricks for saving money? Share the wealth!

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9 thoughts on “How do you save your money?

  1. sarah says:

    I do something similar- money goes automatically into savings every week. When I finally managed to quit smoking, I figured out how much a day I was saving and started having that transferred automatically into an account, too, which serves as both a great little cushion of money and a fantastic motivator to stay quit. Cigarettes? INSANELY expensive. I’ve saved about $800 USD in 4 months, which is wonderful to see (although, conversey, horrifying to think about all the money I wasted destroying my health!).

    I save all my change and bring it to my bank, too- they have a coin counter there, as long as you’re just depositing the money.

  2. Kitt says:

    ING savings is great. Your money is accessible, but you will think twice about withdrawals because you have to allow for some days for the transfer to process.

    I have had a regular savings deposit there for a while. And when my car was paid off, I just started making that monthly payment into my savings account instead. I was already used to living on the remainder.

    I should start doing that with lattes since I quit buying them.

  3. Carol says:

    Hi CLM,
    Doesn’t your bank have a coin counter? I cringe when I think of the amount Coinstar takes for counting the coins.

    When my grandson was born, we started having savings bonds taken out of my husband’s paycheck. Every month we bought 2 bonds and didn’t even miss the money. However, the rate on the bonds is now so low that this doesn’t make sense, so I cancelled the bonds and am direct depositing to my grandson’s credit union account. At our credit union, a child (under 18) can open a CD for as little as $100. The rate of return is much higher. A one year CD is currently earning 3.44%. At our local commerical bank, the savings account rate is .08%. My grandson earns more in 3 months on a $300 CD than my son earned on his regular savings of $3000 in a year.

    One of the biggest savings for us was paying off credit card debt and not using it anymore. Not only was interest killing us, but we bought stuff we didn’t need on impulse.

    Also, I budget $100 a week for groceries and try to see how low I can get my grocery bill. Any leftover amount goes into my emergency fund. By the way, my biggest savings method at the grocery store is to not take my husband. 🙂 Last week, our budget was blown completely because he saw salmon on sale and bought several filets. Luckily, it freezes!

    I gave up lattes too! I just couldn’t justify spending $3-$4 on a single cup of coffee.

  4. cheaplikeme says:

    @Carol – My credit union has a coin counter, but they now charge a counting fee as well. Between the credit union and ING Direct, I do not pay any bank fees on my personal or business bank accounts, so I consider the occasional $4 for coin counting just a hazard of financial management.

  5. Kelly says:

    I am enjoying your blog! Does ING have good rates? Right now my savings is with my credit union and I have been wondering if I should open an account elsewhere to get a better rate. Thanks for all of the tips!

  6. Rob says:

    Good tips. I currently sock away money at the CU, auto deposit and you are right I don’t miss it and I am a coin saver also- I usually save enough for christmas but one year I saved enough for flight and hotel in Beautiful Las Vegas!

  7. Billie says:

    We don’t have much in savings to be honest. We have been trying to get out from being under crushing expenses and a period of un/underemployment. Now that our expenses are less than our income, I have been taking extra money – like overtime, bonuses, that occasional third cheque and payments on a loan we made to a friend – and putting it down on our car loan. Our taxes will go there too. We have even been managing to pay some medical expenses on our regular paycheques.

    We should have our car loan paid off at the end of the year. That payment along with our extras (see above) will then be put in a savings account to pay off our remaining car loan in one lump sum.

    After that… some will go towards retirement, some towards savings and hopefully some towards a vacation or something fun.

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