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Savings account woes? We may have the book for you…
Who doesn’t love to save money? I know that with these tough economic times, I try to stretch dollars so far that my poor Washingtons scream when they see me coming. As a frugal consumer, I am always on the lookout for good ideas on how to save. That’s where The Smartest Way to Save comes in. This book, by Samuel K. Freshman and Heidi E. Clingen, tries to provide simple, common sense tips and strategies to maximize your bank account, while not making you feel like you live in a monastery.
Let me be clear, The Smartest Way to Save will not make you rich overnight, or teach you some secret handshake that only Bill Gates and Warren Buffet know. Saving money is easy…and hard at the same time. It all comes down to psychology. The authors realize this and spend a good deal of time explaining the concepts in a way that gets to the root of the psychological roadblocks for saving. The book does not really shed any new light on saving. Many of the concepts have been known since Noah was a longshoreman, but still evade the everyday consumer. Here are just a few of the saving concepts discussed in this book:
1. Daily choices add up.
Let’s say you choose to start your day with a Grande Mocha Latte from your local coffee shop and that costs you $5 (after you tip the barista). If you skip that just once per week, you’ll save $260 that year. Consider this: A very nice gourmet coffee machine will cost you about $150. The coffee for a year will cost another $150. If you switched to “home brew” gourmet coffee and drinks, you will save about $1000 in a year. Gee, look who just got themselves a wicked cool gadget AND bought next year’s Christmas presents!
2. Why are you shopping?
Again, the authors spend a considerable amount of time discussing the WHYS of why we cannot save. The key message is: EVALUATE. Do you need the new widget, or is the widget just filling a yet undefined void in your life? Understanding the WHYS will help you see and control any overspending.
3. Purchase value, not brands.
Do you really need that name brand over-the-counter migraine pill? Why not buy the store discount brand that’s a fraction of the price? Don’t think it works the same? It has to. It’s regulated by the Food and Drug Administration. Check the label, it’ll list the amount and name of the active ingredients. I bet it’s the same as the name brand you were about to pay twice as much for. Many household goods that are “generic” are just as good as the name brand. If you did this with many of your common household goods you could save $100s, perhaps $1000s per year.
4. Small, inexpensive gifts can show you care too.
While I wasn’t overly fond of the way this passage was written (the tips seemed kind of cheap, not inexpensive), the idea rings true. It is the thought that counts. Save money by buying small gifts when they’re on sale and on your terms, not when you’re under a deadline to find “the perfect gift.”
5. It’s not how much you make, it’s how much you keep.
This is an often repeated adage in the book. It’s good to increase your earning ability, but if your lifestyle costs increase at or above the pace of your income, then you aren’t really getting ahead. The book contains many ideas for what to do with raises and bonuses that will lead you closer to financial freedom.
If you can’t seem to hold on to two nickels, you may want to pick up The Smartest Way to Save.
Please, share your best frugal tip with us!
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