Give your Savings a Boost

It often seems as if saving money is an extraordinarily difficult task, but it isn't. All it really takes is a little ingenuity mixed with a health dose of self-discipline. If you sit down and truly brainstorm, you'll be able to come up with a host of ways to give your savings program a charge. Here are just a few ideas to get the creative juices flowing:

Pay cash as often as possible. Keeping credit card purchases to a minimum will help you to distinguish between things that you want and what you really need. And, needless to say, by using cash you eliminate finance charges.

Put the money from your next raise into your savings. If you're used to living on a $40,000 salary and you receive a 5 percent raise, take that $2,000 and stick it into your savings or retirement account. You won't miss it because you never had it.

Continue to 'pay' for debts that you've already paid off. When you finish paying off a credit card debt or car loan, don't put the extra money back into your checking account, where it'll certainly vanish just like the rest of your funds. Since the expense is already factored into your budget, deposit the would-be payments into a mutual fund or other savings plan.

If both of you work, live on one income. If at all possible, adjust your standard of living so that you can use one partner's paycheck for living expenses and the other for savings. This can rapidly build your nest egg, and also ease the transition during tough times. If one partner loses their job, bills will continue to be manageable; the only thing that you'll have to cut back on temporarily is the money that you put away into savings.

When you substitute a cost-cutting measure for a big expense, make sure that you're really saving money. For instance, if repairing your old jalopy will run you $2,500 and possibly more down the road, it might be more prudent to buy a new, less maintenance-intensive car (but one that comes with manageable monthly payments).

Make your cash hard to get to. Don't keep a lot of extra money in a savings or checking account. Instead, put any additional spare cash into a bank Certificate of Deposit, which penalizes – and thus deters – you for early withdrawal. But be sure that you really aren't going to need those funds; otherwise, you're shooting yourself in the foot.

Pay yourself back with interest. When you absolutely must withdraw money from your savings, return the borrowed amount as soon as possible, along with a little bit extra. You pay everyone else interest, why not yourself?

Adjust your withholding. If you get a tax refund every year, or if your income has dropped, chances are that you're allowing too much to be taken from your paycheck. Increasing the number of withholding exemptions on your W-4 will increase your take-home pay, along with the amount of money that you can use for your own savings.

And last, but certainly not least, don't forget to reward yourself. When you've reached your savings goal for the year, treat yourself and your family with any extra savings that's left. This will give you an incentive to keep saving in the future, and keep you refreshed and upbeat about your financial picture and life in general.

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