Thursday, October 16, 1997
Everyday Saving
by Dan Coyle
([email protected])
The Motley Fool is a great place to learn about investing, but if you don't have any money to invest, it's not worth the bandwidth it's printed on. Where do you get the money? First, let me say that this is not a get-rich-quick scheme. If you're looking for the secret to "turning your computer into $$$$," then go ahead and answer one of those spams you get in your mailbox every day. No, I'm talking about good, old-fashioned saving. If you're reading this Fribble, though, then you're probably not beyond help; you already have an interest in Foolish ways. I have some suggestions that have helped me and a friend of mine start building a mountain instead of filling in a hole.
This is for those of you who say you can't possibly spare any money out of your paycheck. I used to say that. You just have to make it as painless as possible so you barely notice it. Here are some suggestions.
Payroll deduction. This handy little feature of the modern world allows you to put money away without ever seeing it. This is the least painful way to save on a regular basis.
Give your savings account a raise: If you're like most of us working stiffs, you get the same amount of money every two weeks. Every once in a while, if you're good at what you do, you get a raise. If you're used to living on your old salary, keep doing it. Take the extra cash and put it away (preferably through payroll deduction). At least put some of it away. That goes for bonuses, birthday money, tax refunds, and any "extra" money that's not in your regular paycheck.
Sin Tax: Coffee? Cigarettes? CDs? Lottery tickets? If you're like me, you probably do something every day that you feel a little guilty about. If you are truly disciplined, then cut it out and put the money away instead. Yeah, right! For those of you who live on my planet, that ain't gonna work. How about this: You continue to indulge yourself, but every time you partake in your vice, you put a corresponding amount of money away where you can't see it. Do you really want that Starbucks Latte? OK, that'll be $6: $3 for Starbucks and $3 for the kitty. Can you say $720 per year? There are two benefits here. You'll pay for only what you really want because everything just doubled in price. If you can't afford it at twice the price, then don't buy it. (It's easier said than done, but try it.)
Loose Change: I had tremendous results from this technique. If you buy something for $17.56, then put the change in the kitty (not just the silver, the dollars too!). Whenever you buy something, pay yourself too.
These suggestions won't work for everyone. All I ask is that you try. If they don't work, then go blow what you managed to put away during the trial period. A year from now, you can have nothing or you can have a few hundred dollars. When I started doing these things, I was amazed at the little pile of money I managed to stash away. What did I do with the money? I opened a brokerage account and got down to some Foolish business.
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