Savings – Page 10

Overbudget and Save

February 25, 2008 by Danny Crum

I once read on a website, someone suggest overpaying utility bills a few dollars in order to make next months bill less. In my opinion this is pretty bad advice. If you overpay the water company $10 one month you are basically giving them an interest free loan for a month.

One suggestion I would give is to open an online savings account for utilities. If you want to budget each utility a little high each month, transfer the extra to the savings account. At the end of the year you would have some extra money to pay toward debt, or keep in the savings account for an emergency fund. For example:

UtilityÂ Â Â Â Actual CostÂ Â Â Â Budget Cost
CableÂ Â Â Â Â Â Â Â Â $44Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â $50
WaterÂ Â Â Â Â Â Â $27Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â $35
ElectricÂ Â Â Â Â $80Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â $90
GasÂ Â Â Â Â Â Â Â Â Â Â $43Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â $50
PhoneÂ Â Â Â Â Â $32Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â $35

Total Actual costs for the month are $226 and your budgeted costs are $260. Transfer the extra $34 to savings. If you run over the next month and need the extra cash take the money from your savings account and you’ve actually earned a small amount of interest on the money instead of giving interest free loans to the utility companies.

Keep the change – Savings Account

January 14, 2008 by Danny Crum

Keep the change – Savings Account

Before I get started, no I’m not getting any kind of reward for promoting this program, but I do think it’s a great idea. The program is called Keep the Change and it’s offered by Bank of America. It’s basically a savings account built into your debit card. There is no charge for the service and it can help you save a few bucksÂ per year, depending on how often you use your debit card.

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Importance of an Emergency Fund

January 2, 2008 by Danny Crum

Importance of an emergency fund

You know you need one, and you’ve probably talked about saving one, but most people never get around to saving one. When you’re starting your financial plan and budget it’s very important to have an emergency fund started. An emergency fund needs to be around $1000 for the average person. This money needs to be easily accessible in case of an emergency.

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Mandatory Savings

December 31, 2007 by Danny Crum

Mandatory savings account

ThereÂ is an old saying that I’m sure we’ve all herd before, “The more money you make, the more money you will spend.” For most people this is completely true and for many years I fell into this belief. If you get a $100 month raise at work you automatically think you have an extra $100 to spend on something every month. You’ve got $2000 a month coming into the budget and $2000 going out to bills and expenses.Â

When it comes to your savings account it’s very hard to force yourself to put anything in there each month, especially when you never have any left at the end of the month. How does one even start to save? Why do I need to save anyway when I have a credit card?

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Saving

December 31, 2007 by Danny Crum

The concept of saving has been around for many years. Saving money was applauded and seen as a good strategy, while debt used to be frowned on and portrayed as a very bad strategy. You only borrowed money from someone if it was a last resort and then you had to pay them back as quick as possible. That concept has totally been reversed with our current society and today debt is a way of life. As early as the 1920’s saving money began to be “un-American”. The concept of living a better life became more and more prevalent thus the concept of debt seemed less and less evil.

Â Saving money is not only important for your retirement and future planning, but also important for short term goals as well. We get caught up in needing something immediately and can’t wait a few months to pay cash for something. We finance theÂ new LCDÂ television with a credit card that has 18% interest paying $45 per month for one year instead of saving $45 a month for 1 year. Financing the TV would cost you a total of $550 and saving would give you $547Â leaving you $47 extraÂ after paying for the TV not to mention you would probably save more by paying for the TV with cash.Â

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