Learning from experience is smart. We should all learn from mistakes as well as simply pick up knowledge and wisdom as we get older. That said, if we can get good advice early on – AND follow it – we should be ahead of the game.

Along those lines, I think it’s good to be able to offer financial advice to people younger, even if old enough that they’re just out of college and just starting out. Some of you might be at that stage now, or may have family at that point in life.  I came across an article on US News that offers some good advice for those starting out, and below I’ll share the tips as well as my own opinion on each.

1. Save one-third of your income.  You know, at first glance this seems really hard to do for most people just starting out.  I wouldn’t have been able to do it. However, I also made choices that made such an accomplishment unlikely – the primary one being graduating college and then moving to another city rather than going back to my home area. Living at home after college, if that’s an option, can truly help someone save one third of income. In many cultures and/or families, it’s no big deal and very normal to be living with Mom and Dad at that age. Why does it have to be weird and seem like freeloading? I say that despite not doing that myself.
2. Don’t be stingy with career-related investments.  I tend to agree with this. There are people that tend to think that once a person graduates from college, the need to invest in continual learning is over.  Well, that’s not true, as we need to keep learning to make money. This could mean spending money to invest in yourself to get an edge in your career, or give you time to do so.
3. Cultivate ambitious dreams.  Again, I agree. With life ahead of you, there are so many possibilities. Why not try to shoot for the stars? If you land a bit lower, it’s still better than where you’ll end up if you aim low. It’s doesn’t get easier when you get older, as you have less time and more responsibilities.
4. Pay off all but the cheapest student loans early.  Makes sense to me.  After reading about senior citizens with student loans, I think it’s a great idea to eradicate debt and work on becoming debt-free. There’s freedom involved in that situation!
5. Don’t wait to start investing until you have extra money.  The earlier you start, the better off you’ll be in the long run.  The power of compounding on money is staggering, check it out!
6. Give back on your own terms.  I agree on both parts of that: giving, and on your own terms.  I of course support helping others, as I’ve gone over here countless times. That said, nobody should force you into it and often times we might want to be careful to make sure that an organization we give to will actually use our money in a way we are comfortable with.

In addition to those tips provided, I have four more than came to mind, to make a combined list of 10 tips.  Here are my own additional four tips:

1. Don’t give in to financial peer pressure.  People of all ages can be tempted to keep up with the Joneses. I would suggest not worrying about competing with others in terms of how much money they seem to have, where they live, and so on. Be aware of what’s possible, and be inspired. But don’t give in to pressure to keep up appearances, and don’t get sidetracked with unnecessary social competition
2. Behave responsibly and be nice to people.  Besides being the right thing to do, it’s also smart not to be obnoxious.  With people getting googled by employers, and social media being used as a platform for many things, it’s best to think about ramifications if the world knew about what transgressions you commit. Because, that’s potentially but a few clicks away.
3. Don’t waste time on Mr. or Miss Wrong.  Easier said than done, I realize Of course, many of us have seen people spend inordinate time when young dating or chasing the wrong person. I heard a story of a friend of friend who turned down a massive job offer in order to stay with someone who was dating. Who, of course, kicked him to the curb within 2 weeks. Ouch! Big money and career opportunity gone in a flash.
4. Build your network.  Don’t burn bridges, build them instead.  The world is getting smaller, so it’s more important than ever to be a giver and think proactively with your network.

Turning the faucet off can lower your water bill!

Raise your hand if you like paying utility bills!

If we were in a room and I asked the question to the group, nobody would be raising his or her hand.  Paying utility bills is just a necessary maintenance activity that we deal with as a part of life.

Of course, beyond the routine of paying the bills, there’s the reality that they can eat up a decent part of our budget.  Thus, it’s a good idea to try to save on utility costs. One example of such an expense would be water bills.  We can’t live without water, it’s a necessity, but we have to pay for it. Thankfully we don’t have to be pay for air!

Anyway, with respect to water bills, there are ways that we can reduce our monthly payment.  This came to mind when listening to my father share with me how high his water bills have been in recent months.  Here are 10 ways to lower your water bill and reduce expenses:

1. Use a low flow shower head.  This by itself can reduce water usage and ultimately water costs, possibly over $100 annually for a family.
2. Consolidate laundry.  By this, I mean avoiding doing many separate loads of laundry. Rather, where possible, try to consolidate to do fewer loads.
3. Take a shorter shower.  Yes, you can get just as clean if you cut a minute or two off your shower time. Be mindful of time!
4. Water your lawn less often.  Of course, if you don’t have a lawn this won’t apply. But if you do, water it a little less often.  If your grass isn’t 100% green and the best looking showpiece in the neighborhood, who cares?
5. Run the dishwasher when full.  Now, by this I don’t mean overflowing so that everything doesn’t get fully clean. Rather, I mean make sure to run it when more than just half full.  The less you run the dishes, the more you save on water.
6. Install aerators.  Putting these on faucets can reduce water flow and save a little bit of money.
7. Repair leaky faucets.  This is one of those nagging things on a to-do list that we get around to when we can , but over time this can result in money dripping out of your account!
8. Properly insulate pipes.  If you can get your hot water faster, that means water wasted while waiting.
9. Wash your car less often.  If you take your car to a car wash, this applies too. After all, the more you wash your car there, the more you spend! If you rinse off your car in your driveway, you’re using water there too – lots of it, potentially.  Just rinse it off a little bit less, and save a little bit of money.
10. Teach kids to turn off faucets.  This has probably spanned generations, as kids sometimes just keep the water running more than they should, and at any random occasion. For example, turning on the water to brush teeth, then walking away before coming back a few minutes later. We were all kids once, so we know that logic isn’t always there. Teaching them good habits will save them some money in the future and you in the present.

The best thing about saving money on water is that these methods don’t really inconvenience us, as they’re a part of day to day life anyway. It’s just a matter of making a few adjustments.

Also, aside from money, let’s not lose sight of the other more important benefit of water conservation: helping the Earth.

My Questions for You:

Do you use any of these approaches to save money on water?

Can you think of any more to add to the list? I’m sure there are many more approaches that people take which can be included.

Save money on gas

With gas prices getting out of hand lately, the cost of driving can’t be overlooked.  Whether commuting to work, going shopping, or taking a leisurely Sunday drive, it’s not going to be cheap to drive with gas prices this high! Thus, it might be time to revisit some ways to save money on gas.

Here are 15 ways to save money on gas:

1. Find the lowest prices.  This one is so simple yet people often look to other methods first. However, why not just pay less for gas as a first step? Use an app, or just keep an eye out for low priced gas.
2. Forget brand loyalty.  Who cares where you buy gas from, in terms of the branding of the station? A few months back, I saw two gas stations, on opposite corners from one another, with a difference of $0.24 per gallon. Yet, there were cars at the more expensive station. Why? Could it have been brand loyalty? I would rather go with the lower cost gas.
3. Carpool.  If you know someone who works or goes to school with you, and lives pretty much on the way to your mutual destination, why not consider carpooling? Taking turns driving – say alternate weeks – can result in commuting costs cut in half. Of course, you have to enjoy or at least tolerate that person’s company. Think dollar signs, and that can become easier in some cases J
4. Don’t speed. I have a friend who simply never drove the speed limit when younger. He was also really frugal. I’ll bet he never factored in the decrease in efficiency when speeding. Going past highway speed limits, mileage efficiency might be reduced quite quickly.  Best to avoid speeding, which is also smart since it’s safe and we aren’t supposed to be doing it anyway!
5. Use public transportation.  Yes, this might not be possible for you. However, for some people it is a possibility, and one that should be considered.  With my current work assignment, I’m probably looking at $10 in gas round trip, based on the approximately $4.30 per gallon local prices. By taking the train, my per-day cost comes out to about $7.50. An added bonus is less wear and tear on the car, and a less stressful commute!
6. Bike or walk.  Again, not possible for many. However, if you have a short distance to work, school, the gym, or wherever it is you want to go – why not work in some exercise? It’s good for your health, and saves gas. Even doing this occasionally can have incremental money and health benefits that could add up.
7. Get a tune-up.  If your car gets a regular tune-up and is running well, it can be more efficient in its use of gas.
8. Avoid unnecessary starting/stopping and braking.  By this, we’re talking about taking clear paths to places rather than dealing with stop and go traffic. Also, while you drive open roads, if you are constantly tapping on the brake out of habit, you may be able to let up on the accelerator instead.  This could help save money ultimately.
9. Clear out your car trunk.  If your car trunk is weighed down by unnecessary items, it can lower efficiency. To save a little money in the long run, get out of the habit of thinking of your car as a secondary storage unit.
10. Check your tires.  Tires that are low on air can impact the mileage you get.
11. Use lower octane fuel.  Going with premium fuel, when it isn’t truly necessary, can really add up over time.  Go with the lower octane variety.
12. Use coupons.  Yes, I have actually seen coupons for gas! One offered a $0.05 per gallon discount if you redeemed the coupon. Not bad!
13. Check your air filter.  Keep a clean car air filter, if totally in need of replacement it could impact your mileage.
14. Plan your trips.  If you take the time in advance to spend a few minutes planning your driving for a day, if you’re running errands as an example, you might be saving more than time. Consolidating stops and choosing locations to visit, resulting in a shorter and more efficient trip, can lead to gas savings.
15. Pinch pennies.  Here’s a way to really be a Squirreler by using the take a penny, leave a penny dish.  This one’s just for fun, I don’t really recommend it J

My Questions for You

• Have you given extra thought to saving money on gas lately?
• Do you use any of these strategies?
• Do you have any more to add?

How much is avoiding dental pain worth to you?

The cost of dental work can be quite high for many people. For those who do not have insurance, it can be outrageously costly. Even if you do have insurance, dental care can be expensive anyway.

Regardless, it’s something that’s important and we need to take care of our teeth for many reasons. Dental health has been shown to impact our overall health in numerous ways.

With that in mind, I’m facing a dental procedure that needs to get done. I need to get a wisdom tooth removed, which is not something anyone would look forward to. However, it has to happen, so I might as well get the time scheduled and get it over with. The only thing I thought I had to decide was when to make the actual appointment, but I found out that I have a new decision to make: how much to spend on pain relief for wisdom tooth removal!

Frankly, I haven’t really considered this type of decision before. Usually I’ll just deal with the medical care that I have to get, and will put my health above money – within reason of course. If things are truly optional, that’s obviously different. But if I absolutely need medical care or medicine, I’ve just gone ahead with it in the past. What’s the point of saving money if it impacts your health?

As I noted, this procedure must be done, so of course I won’t try to save by avoiding it. However, there are different prices for pain relief for this dental procedure. After getting an initial consultation, the office got back to me with the following 3 options for removing the wisdom tooth.

Local Injection

This apparently involves a shot (or shots) to the mouth and areas near the tooth. The idea would be to numb the area so I don’t feel as much pain as the tooth gets extracted.

Pain Relief: 3rd best out of the 3 options

Cost: $76 – least expensive of the 3 options

Gas (Nitrous Oxide)

This option, from what I understand, is intended to relieve your anxiety so that you really aren’t too bothered during the procedure. Thus, you may not notice the pain quite as much while the tooth is being extracted.

Pain Relief: 2nd best out of the 3 options

Cost: $115 – 2nd most expensive of the 3 options

IV Sedation

In this case, you are actually sedated. You’ll be out of it, and won’t be noticing what’s going on. Essentially, its like you’re asleep.

Pain Relief: best out of the 3 options

Cost: $338 – most expensive out of the 3 options

With all this information provided to me, the first thought that came to mind was this: “give me a shot, get that sucker out of there, and let me save some money!”  Then, I paused and thought about it for a moment.  Do I really want to do that?

The difference between a local injection and the gas is $39. That’s not much, all things considered, for something like this. So, I’m eliminating local injection as an option. The difference between gas and IV sedation, however, is $223.  That’s a little bit more noteworthy. I’m probably going to go with either nitrous oxide, or IV sedation for this treatment.

The decision: is $223 worth spending for a little more pain relief?

It’s money vs. pain? I wonder how many people even think of money in a case like this? I’m guessing there are people on both sides of the spectrum. Some might want pain relief no matter what, and there might be some tough characters that will save a buck at any cost. The things people will do to save money!

This also serves as a reminder of how important it is to have insurance and some financial resources. Some folks have no options.

But for those that do, I wonder how many would tough it out and go with the cheapest options. For some, losing money can be quite painful!

My Questions for You:

Which choice of the 3 would you go for?

Do you think of money in cases like this, or do you just want comfort at any reasonable price?

Have you ever faced a decision on any health care decision that was impacted by cost?

The following is a guest post via MoneySupermarket

Savings is the catchphrase at the moment for many in these difficult economic times. If we saved more before, we might not have been in the dire straits we are now, either globally or personally.

Can you save more? Can you afford to save more? How much can you afford to save and what would it mean for your future? Consider the options and see this page for the best interest rates currently available on savings accounts. If you do not have a budget, it is time to get one. Do it before the end of the year or make it a New Year’s resolution.

The beauty of a budget is that it trains the mind and disciplines your spending habits – something we can all use in our lives.

Take a sheet of paper and draw a line in the middle. In the first column write everything that you earn and include your full-time income and any other part-time income that you may receive regularly. In the second column write all your fixed monthly expenses. The idea is that there should be more money in the first column than in the second!

If not, you have to seriously reduce the spending in the second column. In the second column you will find expenses that are necessary with items such as a mortgage loan repayment, car repayment, required insurance and utility payments. Insurance payments would include health insurance and any insurance on your car or house. The car and house insurance might be a lender requirement or a sound judgment of your own.

Also necessary, will be amounts spent on items such as groceries. Gas will also be necessary, but how much of it is necessary? Can you perhaps make a plan to reduce your gas bill by taking the train or bus more often to avoid rush hour traffic? Can you team up with a neighbor on your way to work? If you use public transport, will the cost be less than your gas bill? Can you walk to a store nearby instead of using your car, out of habit?

Look at the expenses in the second column and work out what you can stop paying and put it into savings instead. Do you have any store accounts? Will it not be better to pay them off, save that amount and buy with cash in future?

Do you eat out? Do you order in? Can you reduce those amounts? Will it not be better to cook a healthier meal at home and involve your kids in the cooking process? If the kids cannot cook, it will afford them the opportunity to learn an invaluable skill. Also, home cooked meals are healthier than bought ones and by keeping their hands busy they will snack less and they can even lose weight.

Reducing expenses is easier said than done. If you earn just enough to get by, you will never save much. The fact of the matter is that we all need an emergency fund because we don’t know what the future holds.

Add another item to your list of necessary expenses and call it savings. Arrange for a deduction from your bank account so that you cannot renege on your decision. Then forget about it. Your savings can be a saving grace. Make a definite effort to start saving, even if it is the smallest monthly amount that the bank will accept.

The following article is a guest post

Cars are a major component of our living costs. With around 95% of US households having at least one car – and with transport taking up around 15% of our annual budgets on average – cutting car costs is something that could benefit us all. From being more careful about where we get our car insurance quotes to changing the car we drive, there are quite a few things we can do to spend less on motoring.

Read on to find out about five ways you can cut your car costs. 

Drive less

It may sound obvious, but one major way we can cut the costs of driving is simply to do it less. The majority of trips involve a car these days, and 85% of us use our cars to get to work. Of course, there are some journeys where a car is definitely required and, if you live in the middle of nowhere, walking to the grocery store to pick up some basics might not be an option.

However, most of us could drive less if we put a bit of thought and effort into it. Plus, it’s recommended that we get around half an hour’s exercise every day, so leaving the car in the garage and walking down to the store could be a good option for more reasons than just financial ones. 

Switch to regular gas

Many of us like to use premium gas in our cars – after all, why not use the very best? This makes sense for some cars, but most vehicles run perfectly well on regular gasoline. You could save up to 20% on the cost of your fuel by doing this, depending on where you buy your gas. Also, if you live in an area where there is a large number of gas stations, shop around rather than going for the first one you see. You can find price differences of up to 10% in a relatively small area, which will obviously have an impact on the cost of your gas. 

Shop for insurance

Another trick when you’re looking for ways to cut the costs of motoring is to shop around for your car insurance. Different companies will offer different policies with different standard cover and extras. You might also find that two insurance companies offer the same cover for markedly different prices, so take a look at a couple of price comparison websites to work out where you can get the best deal. 

Don’t modify your car

Also, try and avoid modifying your car wherever possible. Not only do the modifications themselves cost money that you don’t really need to spend, but they can also bump up the cost of your car insurance. Even small changes such as alloy wheels can have a big impact on how much you pay for insurance, so try and resist the temptation if you can! 

Buy an efficient car

Finally, buying a more efficient car might cost you some money up front but it could save you significant amounts over time. For instance, a car that uses fuel more efficiently will help you at the gas pump and if you buy a car that’s renowned for its safety, it will also help your car insurance costs. It’s definitely one to ponder.

Recently, I had to purchase a box of envelopes after discovering that I didn’t have any at home. With online bill pay, the need for envelopes just isn’t top of mind in my home. However, once in a while you need to actually send a check via mail.

Anyway, I added buying envelopes to the list of things I needed to get done on that day. So, on my way to a local Wal-Mart, I spotted an office supply store very close to my destination and immediately thought “Envelopes!”.  So, I stopped on in and searched for envelopes.

Once I found the aisle with envelopes in the office supply store, I narrowed my search to the standard security-lined variety.  In doing so, I was searching for the best value. After all, an envelope is an envelope, right? Now, I didn’t want to buy in bulk and buy too many, so I settled upon a box of 45 for the price of $4.49.

After I paid, I got back in the car and drove over to Wal-Mart. As I walked into Wal-Mart, I quickly went through the store picking up the few items that I needed.  Before I got to the checkout area I thought about my envelope purchase just 20 minutes ago from the other store. That got me curious about what the cost would be for envelopes from Wal-Mart, so I walked over to the supplies area to look for envelopes and satisfy my curiosity.

As I found the envelopes section, I quickly found a box of security-lined envelopes. A glance at the price yielded a surprising figure: $0.97. That’s right, 97 cents!

I did a double take, and it was definitely $0.97 for a box of envelopes. I then looked at the box, and yes – it was for security lined envelopes. I very quickly thought “what about the number of envelopes in the box, maybe there are less”. Well, I looked at the box and it indicated that there were 40 envelopes in the box.

So let’s revisit the prices again (excluding taxes):

Office Supply Store: 45 envelopes for $4.49 – about 10 cents per envelope

Wal-Mart: 40 envelopes for $0.97 – about 2.5 cents per envelope

Basically, it cost me 400% more to buy envelopes from the office supply store vs. Wal-Mart. But wait – isn’t the former an office supply store after all?

Well, it might be, but that doesn’t mean that prices will be lower there. Now, for all I know the envelopes from Wal-Mart might have been a bit lower quality. Who knows? But as I mentioned before, an envelope is an envelope for these purposes, right?  To pay 4 times as much at an office store seems a bit crazy.

Doing so would almost be like ignoring coupons or coupon codes that could instantly help save money. For example, for a different type of purchase in an entirely different store - let’s say soaps, lotions, etc – you could take advantage of a coupon code to save money. So clearly, across product categories and stores, there are ways that we can save money.

Anyway, back to my specific experience – I went ahead and bought another box of envelopes, this second one from Wal-Mart. I had to go back the other direction anyway, and then stopped at the office supply store and returned the envelopes I had bought there.

Lessons Learned:

• Just because a certain store specializes in a certain type of product, it doesn’t mean that it offers a better price than a general retailer
• Prices for given products can vary significantly from store to store – even as much as 400%!

My Questions for You:

• Have you ever bought something at one store, then discovered that you could have purchased it cheaper somewhere else?
• Have you ever noticed any products for which there’s a wide range in prices, depending on where you buy them?

Gift cards are nice to receive as well as purchase for others. They’re a way that someone can show an interest in – and knowledge of – the recipient’s tastes and preferences. At the same time, they allow for some individual choice in the ultimate purchase.

For example, instead of getting a gifted sweater that doesn’t fit your style, maybe a gift card valid at the same retailer will allow you to pick a different one that’s more to your tastes.  This would have been nice when younger, I remember getting one super ugly sweater that was bright white with some black streaks. I felt like a Star Wars stormtrooper when wearing it, and worse – probably looked like one too! That is, when I was actually crazy brave enough to wear it:)

When actually buying a gift card, it can be tempting to go directly to a retailer and buy. I’ve done this many times in the past. However, another way to do it is to actually look for gift cards at a lower price. Yes, it’s possible to find discounted gift cards for sale. Cardpool is a site that offers such cards for sale.

It’s interesting to see the type of cards that are available. Examples at the time I perused the site are:

• Restaurants
• Flowers
• Movies
• Clothes
• Furniture
• and Others

The savings can be pretty good, and that’s worth considering. Thinking about myself, I could potentially purchase maybe $300 of gift cards in a year.  While discount percentages could vary, let’s assume I got 10% on average. Right there, that’s a $30 savings for the year. Not bad! Of course, you could take it that next step and invest the $30, let the returns compound, and it could result in even more money going forward:)

It can also be worth it to sell gift cards as well.  If you get a gift card for value at a business that is not one that matches your needs, why let it sit idle? It might be possible to sell your gift card as well, using Cardpool. Capturing value from unused or unwanted gift cards can be another way to generate some extra cash and make the best use of an asset that you might not otherwise utilize. Seems like it might be a win-win for many people in that way!

Going forward, I’m going to keep in mind the potential benefits of buying discounted gift cards, and the possibility of selling unused or unwanted gift cards where possible.  It’s nice to have a chance of capturing money that might otherwise be left on the table.

Health care costs can be a big part of one’s expenses. As one starts to get older, this becomes more and more apparent.  Once additional dependents get in the picture, this becomes a category of expenses that merits much more examination.

While we might spend all kinds of time trying to save money at the grocery store, restaurants, and other places – what about spending some time trying to save on health care?

Well, here’s a list of things you can do that could help you with that. Below are 10 ways to lower health care costs:

1. Choose generic drugs instead of brand name. Generic drugs are generally equivalent to branded drugs, with the same efficacy and side effect profiles. The difference: they’re often much cheaper.
2. Use mail order for prescriptions. You can obtain multiple months of a prescription through the mail, for a discounted price.  Though I’ve never had the reason to try it, I most certainly would if I had a chronic condition that required continual refills. Why pay more on a monthly basis?
3. Ask for samples.  Perhaps you can get a product sample that will help you get started on a particular therapy – thus saving you money in the process? This happens all the time. Why not ask?
4. Utilize a flexible spending account (FSA).  If you have the opportunity to take money, set it aside and not pay tax on it, why not do it? As long as it’s used for qualifying expenses, this one’s an easy choice. Make sure not to overestimate expenses, so you don’t lose what you set aside – or scramble at the last minute to use funds like I did last year.
5. Stay within your network.  Going out of network for doctor visits and for procedures can cost significantly more money.  Take advantage of the lower prices that have been negotiated.
6. Participate in wellness assessments.  This may not be an option everywhere, but I once got involved in a wellness program through a past employer, and got a financial benefit.  If offered, might as well take the opportunity for easy benefits.
7. Review your bills thoroughly.  Billing errors do happen. When they do, doesn’t it often seem like they’re in the favor of the entity doing the billing? Taking the time to scan through each bill can be a good use of time, particularly if you end up catching a mistake.
8. Negotiate your bill.  Ultimately, bills might be negotiable in some cases. A prior post I did on negotiating your medical bill illustrates how it could potentially be done. One way is to offer to pay up front, a lump sum that’s  less than the full amount owed. They just might take it. It doesn’t hurt to ask. Remember, simply asking can in some cases help a person avoid potential money problems.
9. Avoid the emergency room.  OK, sometimes you just have to go the emergency room and there are no two ways about it. We all know that. However, there are other times where you just might have an alternative. An urgent care center can often provide fast care for some problems that occur, without an appointment, during business hours – and sometimes beyond. If your doctor doesn’t have an appointment for another week, and you need care, you could consider such centers. It beats the high cost of the ER!
10. Make smart choices every day.  Eat well, get plenty of sleep, exercise, take care of your teeth, and make good choices every day. Lifestyle can play a big role in determining our health conditions, so it’s imperative to make smart decisions with the long-term in mind.  One trick – picture yourself older and in poor health, as a direct result of today’s bad decisions. That tends to  help motivate me and get me more disciplined, though I’m I work in progress!

My Questions For You:

Do you employ any of these strategies?

What other tips do you have for saving money on health care?

We all would like to have more money, right?

Well, maybe all is a strong word. Some people are totally content with what they have, and don’t think they need more. However, most of us fall into that first group. We would like to have more money!

Here are 5 steps for increasing your savings:

1. Discern wants from needs.  Figure out what you truly need, and distinguish these needs from what you want. Do you need a car? That’s probably the case, for most us.  Do you need a new car that costs $35,000? No. You could always buy a lesser brand that’s still reliable, and pay $20,000, for example.  Or, better yet, spend even less on a quality used car. The brand name is a want. The ability to safely get from Point A to Point B is a need.
2. Track your expenses.  Instead of spending indiscriminately, track your expenses. If you track cash outflow down to the penny, you can get a really good idea of where your money is really going. This can help you figure out where you can cut the fat, so to speak.
3. Live within your means.  OK, if you follow Step #2 above, you know how much you’re spending and on what you’re spending, right? Now you need to make sure that this fits within your income. Most people have a much better idea of what they earn than what they spend, it seems.  If you have both pieces of information, you can make sure that you’re spending responsibly.
4. Maintain a gap between income and expenses.   Once we’re able to live within our means, we can take steps to make sure that there’s a gap between our income and expenses that results in savings.  Of course this means income exceeds expenses, not the other way around:) Many people say 10% is a good figure, but I think that is way short for most people. Working up to 25% or more is more realistic, in my opinion, for today’s reality of a self-funded retirement.
5. Preserve and grow income.  Thus far we’ve focused on keeping control of expenses. That’s certainly important. That being said, we need to actually have money to save, before we can work on saving it! Let’s not take for granted the cash inflow part of the equation.  Working to maintain income first, and then working to increase income, are vital to our overall financial situation. Doing this, while keeping expenses under control as detailed in Steps #1 to #4, can supercharge our savings efforts.

The net result of increased savings is more money in our bank accounts.  From there, we can choose the best accounts for our needs. Ultimately, taking the money in these accounts and investing intelligently with a good rate of return (and time on ours side), we can work toward a bright financial future.

My Questions for You:

What steps have you taken to increase your savings?

Where do these steps above fit into your savings efforts?