Monday, September 8, 2008

A savings challenge

We in Frugal Land talk about a lot of things that are important to being more frugal and living better because of it, but one of the two most important things you can do to get ahead is to put money into a savings account or other safe place. (The other thing is to get out of debt.)

I don't care how many plastic bags you wash out or how many pennies you pick up from the sidewalk or how many lattes you forego, if you don't save the money you save, it's all pointless. I mean physically save money. Put it in an account, put it in a piggy bank, in a cookie jar, under your mattress, but put it somewhere away from your daily finances.

The problem is in funding that account in the first place, even if we're actively frugal and save every where we can. We often save in such small amounts (although many times over) that the money just get lost in the bigger picture. We tend to let a lot of loose change slip away just because we don't actually see the savings. How do you get the money saved from a fifteen cent coupon to a savings account? Or how do you figure the savings when you opted to NOT buy a new outfit for work? The key is one word: Tracking.

Now don't get me wrong, if you don't track and you save fifteen cents by using a coupon, you have fifteen cents more than you would have otherwise. It will eventually add up and you should notice a difference in what's leftover each month if you save wherever you can. You can just put that in your savings account, but the chances are that you've lost some to the wind along the way.

Tracking is something that a lot of people don't like to do and I'm one of them, so I can sympathize. It's the best way to control your money, though.

You'll need to write down your savings every time, no matter what the amount. If you want to really save the money you saved from not buying that outfit, record the cost of it as savings. There may be some times when you won't record a "savings" because you didn't have the money in the first place and were only dreaming when you wanted something. Record only the savings you made when you seriously considered buying something then changed your mind for frugal reasons.

A far as real cash flow goes, put real savings pennies and dollars in the bank. You can add in the pennies you find on the sidewalk and the change found in the washer, if you like. If you go to the grocery store and save $1.43 by using coupons, either write that amount down to be added to other funds for the savings account, or physically take that amount of money out of your cash and put it away. Add to it as time goes by and you'll soon have enough to make a deposit into your checking account. Be as faithful as you can to track every bit.

I know that sounds petty and a lot of trouble for some of you, but it works. If you're not convinced that you should or that you even want to, I challenge you to try it for a month. Give it a fair chance and see what happens.

At the end of the month, add it all up and multiply by 12, then ask yourself if you don't mind wasting that amount of money every year. And if you do mind, put it in the bank and go for another month... and another one.

Saving this way will soon become second nature and not nearly the chore it once seemed to be. Your savings account will thank you with its own rewards. How can you lose?

P.S. They're discussing this very thing over at Dollar Stretcher Community forums: "Small Change" Tricks


  1. WOW. This is so insightful and helpful. Thank you so much for this information. I am sending this blog posting to my husband so that we can start this process NOW.

  2. When I am able to save money at home, I put that little bit in my "saving's fund" as well. For example, I love those 3x5" notebooks for jotting down new ideas, books to get from the library, or anything else I want to remember. I use scrap paper that is too small for the printer. I cut it to 3x5". When I get to 50 sheets, I use cardboard from cereal boxes, etc. cut to size for both front and back. Then punch 2 holes in the top (usually I have to do this in 3-4 sections because my hole punch isn't as strong as I'd like). Then I put yarn through the top, and tie. Another $.75 saved. I don't "pay myself" until I start to use that pad. I also don't overdue accumulation of these pads. They will add up quickly and become clutter.
    Regards, Peg

  3. I'm glad it was helpful. Peg, thanks for your example.

  4. I agree, great reminder. Don't remember when it changed, but stores used to give back the money from coupons. I'd take that and put it in a jar - we used it for special treats from slushies to a weekend camping trip. Bellen

  5. I came across your blog and thought I would post a comment can also look at the bottom of your grocery receipts and (for instance) at King Soopers it tells me how much I saved with my coupons, how much I saved with my club card & how much I saved with the store doubling my coupons. Take the total amount and put it away!

    Great site by the way.

  6. Nice article.Thanks for the post.
    Account Savings