How to Save Money in a Weak Economy

With consumer spending down quite considerably, and the media overtly proclaiming "doom and gloom" for the Untied States economy, I get asked quite often "Should I be putting extra money away?"

First, I am a firm believer that a stable savings account = a well-rested mind. I do not necessarily believe that you should be stocking your funds into savings because of a fear that Armageddon is approaching; rather I think this a great time to strap down and focus on bulking up your savings - and maintaining such a habit well into when our economy begins to recover. So yes, you should be saving, but you should have been and continue to save as time progresses.

However, if you are like me, finding that spare change to clink into the penny bank can be a tedious task at best. From experience, I have learned that saving oftentimes requires a little sacrifice in the beginning to get going, but you don't have to give up those important costs such as healthcare and food. I have composed a list below that will help you cut corners and discipline yourself to add up those extra pennies without having to give up the bare necessities.

•1. Set your saving goals. Like most things in life, if you have a clear and determined goal in mind, you will accomplish what you set yourself out to do. (Need some goal setting motivation? Check out this.) Set a goal for how much you plan on saving that month and stick to it. Like I discussed with budgeting, having a rounded number that you set in your mind will reinforce your habits. If you know you plan on placing $100 per month in your savings account you'll be more apt to do so then if you just said "I am going to try to save as much as I can."

•2. Take the money directly out of your paycheck. Tying into the whole goal-setting mindset, automatically withdrawing money out of your paycheck and plopping it into your savings will greatly avoid the "I'll save what I can at the end of the month" dilemma. If you put off placing money into savings until you know how much money is left over, your will be likely to spend more seeing all that available cash in your checking account.

•3. Save the change! Okay, okay... you have heard this numerous times, but it really does help! I often dump around $20 dollars worth of coins out of my collection of purses every few weeks. I'll never forget the day my father ran hurriedly into my room when I was still in high school with a GIGANTO clear jug (that was probably about as tall as me), with a few coins dispersed on the bottom of it. "I'm starting to save for your wedding!" he exclaimed. That jug is now almost completely full.

•4. Cut back on the "wants" but do not restrict the "needs." A good way to see how much you spend on your needs vs. your wants is by going over your statements of the past month or two and labeling everything you buy as a "want" or a "need". How much more money do you spend on one or the other? Answer the following questions, and if you don't need them - then do without them!

• a. Do you need the extra 2,000 channels on your television set?

TIP: If there are a few channels that are included in those huge movie packages you absolutely love, see if you can pay for them individually. Sometimes they cost less than the whole package and can save you a buck or two (if you really CAN'T live without them, that is!).

• b. Do you need to eat out every night of the week, or can you buy bulk at places like Cosco?

TIP: Lean cuisines are a somewhat healthy alternative to TV food when you are on a tight budget and do not have the time to cook. Instead of hitting up your local restaurant, grab one of these for $2 (give or take your location), pop it into your microwave and BAM! Your dinner is on the cheap.

• c. Do you need to wash your clothes with hot water?

TIP: Doing laundry with cold water uses 90% less energy than hot!

• d. Do you need to have incandescent lightbulbs?

TIP: Fluorescent lights cost slighty more initially, but save BIG on your utility bill in the long run. For all of you extremely concerned with our present economy, think long-term and start conserving (and do better by your planet too).

• e. Do you need that cup of Dunkin Donuts or Starbuks coffee every morning?

TIP: Do the math... how much do you spend on coffee not made at your house? Let's be conservative and say you spend about $1.50 a day. That's $340 dollars that can go directly into your savings!

• f. Do you need that brand new Prada bag? Do you need that brand new 50 inch television?

TIP: If you don't , and buying these items will slightly strap you for the time being - avoid it! Live with the (gasp! dare I say?) knockoff or an older TV until you are financially mature enough to afford these.

• g. Do you need to go to the $200 per month GLOBO GYM?

TIP: Unless you are making a career out of personal fitness (and even if you are!), you don't need to go to the absolute best and most expensive of gyms. Is it really necessary that you have little mini shampoos for your showers and lockers with your names engraved on them? This is completely wasted money. If you really know how to work off a sweat ANYWAY, you'll know how to do to so in any gym.

• h. Do you need to spend astronomical money on your fingernails?

TIP: Go to a beauty school and get your manicure/pedicure done for a fraction of the cost - if not free.

•5. With astronomical gas prices - SAVE! This is THE MOST USEFUL web site on the internet to help you achieve this. Locate the cheapest gas station in your area and go to it.

•6. Bring a calculator with you when food shopping. Is 24 ounces for one price better than 36 ounces at another? These small savings can add up big.

•7. Drink water. Cutting back on buying all that soda will be great for your spending - and healthier for your body at the same time.

•8. Rent movies rather than going to them. OR - better yet if in the NYC area - go see them for FREE.

These are extremely easy ways to cut back on costs. In order to be most efficient at this, the most important factor you need to keep in mind is that you should do without the most expensive "wants" if they are beyond your needs for the time being. Start thinking "in the future." If you'd like a happy and secure tomorrow for yourself, live with what can make you happy in a simple way. Instead of focussing on materialism, focus that much more on your relationships, your family and your career.

For further reading, there is a plethora of information contained on various sites across the web. Check out some of my suggested links below!