5 Money-Saving Strategies for the Struggling American

News Article by Jamie Seger, OSU Extension Program Assistant, Miami County

Times are tough. Money is tight. All of us should be saving. Yes, you read that correctly. Even though we are all experiencing a deep recession, we should still be putting money into our “rainy day funds.” Having a cushy amount of funds in your savings is crucial to being able to withstand a huge monetary emergency such as job loss, medical issues, and other unexpected expenses. Even though we know we’re supposed to save – most of us do not. This is especially true for younger families and twenty-something’s who have admitted to rarely (if ever) putting money back for emergencies. A great question I hear a lot is: “How on earth am I supposed to come up with the money when I spend every dollar I earn for the basic necessities of life?” My answer to them; even when we are experiencing economic hardships, we can still find ways to save…and here are five examples of how:

1. Set financial goals to save toward – even if you are unsure if you have the funds This recommendation may sound a bit crazy – but it works! If you take the time to put your financial goals in writing (i.e. make a list, prioritize, etc) you will begin to think about ways you can go about achieving those goals – which typically leads to wanting to save more money.

2. Budget, Budget, Budget! Keeping track of where your money is going on a daily, weekly, and monthly basis is extremely important for knowing what you can afford to put back into your savings. Chart your usual bills, expenses such as entertainment, clothing, etc. Also carry a piece of paper around with you each week to document how much you are spending on extraneous items such as fast food lunches, packs of gum, etc. You may be surprised at where your hard-earned money is going.

3. Go “treasure hunting” for money. We can usually find extra money where we least expect it. The 25 cents you had leftover from the vending machine at lunch is still in your pocket, and will add up when combined with other extra change from day-to-day. Nixing the $2.00 daily coffee at the local convenience store works well. Even cutting back on how much you spend for your nephew Johnny’s birthday presents can make a difference – also attending a coupon party (all the rage these days) can help as long as you put the savings into, well, your savings!

4. Put money into your emergency fund as if your life depended upon it. Extremely high medical expense debt is one of the highest causes of bankruptcy today. Not only will planning early for these emergencies help relieve the financial burden later on in life; it will relieve stress in the present because you will be prepared for other unexpected financial situations. A good goal amount to strive for is 3 – 6 month’s worth of expenses saved at all times.

5. Find a savings strategy that works for you and stick to it. If your typical savings strategy involves waiting around until the end of the month to see if there is any money left to put in your back, the time is now for you to find a new strategy. If your banking institution offers scheduled deposits into your savings account – use it (even if it is only $5 per check!) The out-of-sight, out- of-mind rule is at play here: if you do not see that money, chances are you probably won’t miss it.

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