As part of its "America Saves" campaign the Consumer Federation of America invited readers to submit tips for building an emergency fund (e-mail Nancy Register at firstname.lastname@example.org and send me a copy). More than two months later, I'm still receiving a steady stream of letters and e-mails on the subject and savings in general.
Jan. 13: Dreams can come true, with knowledge
Jan. 6: Impulse buys compound low savings
IN THIS PACKAGE
- Disciplined saver faces a big expense
- Seasonal slogans may not always peg investment truths
- A little money, lots of time can make teen a millionaire
- Tax strategy can save on stock distributions
- The savings game
- The Leckey file
- Getting started
- Spending smart
- Can they do that?
- Taking stock
- Approach to retirement can become filled with turbulence
- The week ahead
-- "Saving money requires spending less than you make each month. Saving also demands discipline," said Donald Swegan, of Sebring, Ohio.
His system--the same one my wife, Georgina, and I use--involves setting aside enough money each month to pay not only for the regular monthly expenses but also a share of all anticipated expenses for the year. Swegan estimates he incurs expenses totaling $7,200 a year for automobile and other types of insurance, doctor bills, holiday gifts and other items. These bills come at different times and for different amounts.
But they don't catch Swegan by surprise because he sets aside $600 a month into an account where he always keeps enough to handle those expenses.
-- Beverlyann Dooley, of Ocala, Fla., realizes she's "spending" money every time she drives, not just for gasoline but also because of the wear and tear on her car. If she goes on car trips lasting 11/2 to 2 hours she sets aside $20 toward future maintenance, repairs and eventually replacing the vehicle. For trips of six hours she ups the amount to $100.
-- Irene Lewandowski, of Dalefield, Wis., took up a "$1-a-day challenge" and has hundreds of dollars and a high-yielding certificate of deposit to show for it. "I took the challenge (saving $1 a day plus loose change, as suggested in a magazine article) on Jan. 1, 2006," she said. "I cleaned an empty coffee can and added my first dollar and what change I had. By the end of the month I counted what I had accumulated and deposited it in my savings account, which didn't pay much interest. However, by the end of 2006 I managed to save close to $500, which I used to open a certificate of deposit that earns 5 percent interest.
"And yes, I did start the $1-a-day program again in 2007 and it has become a habit. So the next time you say you can't save, just try the $1-a-day challenge--or just the change in your pocket. You'll be amazed how it can add up."
-- Here's another way to save a dollar at a time and also engage in a friendly competition with friends: "I save $1 bills that have the sequence 24 anywhere in the serial number," said Doris Winchester, of Colorado Springs. "I have a friend who saves dollar bills with a 23. Another friend saves bills with the letter J. We have fun comparing how quickly the dollars add up."
-- Finally, Bill Etherton, of Phoenix, reminds us that the most effective way to save is to not spend money on things you don't need:
"Your article on saving reminded me of something that happened a long time ago. I was either in elementary or junior high school and my Mom wanted to go buy something on sale. I told my Dad, `Why don't we put the money we save in the bank?' My dad replied, `Why don't we not buy it and put all of it in the bank?' It has made me rethink a lot of purchases since then."
Humberto Cruz is a columnist for Tribune Media Services. E-mail him at email@example.com.