Archive for the ‘Saving’ Category.

Minimize your Expenses, Maximize your Earnings

The eventual objective of your budget is to have leftover money, after you have accounted for everything else. That is, you need to make sure that you are maximizing your income and minimizing your expenses. How? let us find out:


-Minimizing your Expenses

  • Review your budget first: go over every item, line by line, and see which ones can afford some reductions.
  • Find a better and cheaper insurance. This could save you hundreds of dollars a year. Better yet, if possible, bundle your home and auto insurance to maximize your savings.
  • Cancel any entertainment or media packages you don’t need. Do you need your TV cable as well as a Netflix plan at the same time? Or, do you need two cell phone plans?
  • Driving less or even commuting to work with others will save you money on gas.

-Maximizing your Income

  • Sell something online: do you have any items, books, electronics sitting around that you could sell? list them on Ebay, Craigslist and you may be surprised to see how many people will express their interest in buying them.
  • Working in a PT job: if you have a lot of free time, why not look for a PT job, one or two days a week?This will certainly maximize your earnings.

These were just some examples you can follow to minimize expenses and maximizing your revenues. You may think this is all common sense, and it sure is, but you may not be applying it to your life already. You need a reminder or to read about it before being able to actually applying it to your situation.

The more you maximize your earnings and minimize your expenses, the more money you will have left in your budget for you to enjoy and save. So it is worth taking the time to review your budget and finding areas to tackle for savings or reductions.

Although there are lots of variables to account for, and life changes can be unpredictable, your budget of the future should have a positive net income. In other words, as you move forward, your expenses should be brought under control and reduced, while your earnings are maximized. With some planning, you can reach this ideal situation.

How your loose change can pay for big purchases!

I used change money to pay the down-payment on my dental treatment. That is right, I used nickels, dimes, quarters, loonies and toonies that I had saved in a piggy bank to pay more than $800 towards the total cost of getting braces for my teeth. And it took me less than 18 month to save this money.

The best thing about it all, it didn’t even feel like saving money. I was simply putting away loose change that I didn’t need.

Although this was my first experience of using change money to pay for a large purchase, other even bigger ones were done later on. So how can such small amounts of money lead to enough savings for a big purchase? Using my own long experimentation with this type of saving, here are some ways where you can save enough coins to buy some of the things in your wish list.

-Decide where you will collect and save your change: a piggy bank comes to mind, and while it doesn’t have to look like a pig, it is important that the jar you use is closed and has no way of opening it, unless you break it. You don’t want to make it easy for yourself to open your little bank, the next time you desperately need change for a coffee.

-What are you saving for? you have to decide what you are saving for. Is it a down-payment on a used car? New computer? Getaway vacation? Once you decide what you are saving your change money for, print a little sticky tag with what you are saving for and stick it on your piggy bank jar. This helps, according to our 3rd principle of budgeting and finance, to keep you focused on a clear goal.

-Target date: while it is not a must to have a target date to reach your savings goal, in certain situations you will have to specify one. For example, if you are saving for an August car show in California, then you have a clear target date to abide by. A specific target date together with a clear objective for the saving (see note directly above) will help you stay more focused.

-Where to place your ‘loose change’ bank? This is extremely important. Based on my personal experience, the car has proved to be the best place to keep my piggy bank. Why? It is so within reach to deposit all your leftover and unneeded change from any purchase. Of course, you will have to hide it from clear view for safety reasons. If you are uncomfortable leaving it in a car or don’t even have a car, next best place is somewhere that is within the view of everyone at home. This will help make it easy to reach, so you can deposit your change in it when you come back home. Occasionally your family members may (hopefully) deposit their unneeded change there too.

Although I used a piggy bank jar to save my loose change money, occasionally I would deposit small bills too. This can speed-track your savings.

Putting your loose change away in a bank has an additional benefit to your health as well. Like we noted in another article, as your wealth and health are closely related, saving your change will help you avoid spending it on junk food or high caloric beverages.

Last, you shouldn’t use a piggy bank to replace your real bank savings. The two are completely independent and this second one is more of a complimentary (not a substitute) for your real savings in a real bank.

In accordance with our 1st principle of budgeting and finance, ‘every bit helps’ and diversifying your means of savings, even through change money, will go a long way towards achieving your financial goals.

Diversifying your Places of Savings will Maximize your Future Wealth

Putting your money in a savings account is not the only way to save and grow your money. It is just one of many. Generally speaking, and based on my own personal experience, the more sources of savings you have, the more money you can save. In other words, don’t put all your eggs in one basket. Find alternative ways to save money. Here are some of them, most of which I have tried myself:

-High interest savings account: whether it is at ING, Ally or your local bank, this is a must for all people looking to save their money. Don’t worry about interest rates being at historical lows. They are going up and will continue to. You are not just putting your money there to gain interest. You are also leaving it there so that it is not within your reach, where you could end up spending it.

-Piggy Bank: we already went in-depth about how to save money using a piggy bank.  Where your savings account will hold big amounts, use this one to save your loose change (and some small bills occasionally)

-Automatic Payroll Deduction: This is one of my favorite and easiest ways to save. You don’t even see the money and it goes straight to your saving account.

-RRSP: for Canadians, it is highly recommended that they open an RRSP account to compliment their existing savings account. You can use automatic payroll deduction at your company (see note above) to take advantage of this.

Of course, you can choose to go more advanced and start investing your money, buying stocks, currency etc. but that is beyond the scope of this blog for the time being.

Having more than one place to save your money will not only get you more money, it will just give you a feeling of having more money, and this in turn will encourage you to want to save more money.