Saving money is tough, especially when finances are tight and disposable income is at a minimum. For all of the recently laid off workers — employees of the state whose hours have been cut and other economically distressed individuals — that “rainy day” has arrived and I bet they all wish they had a larger emergency fund to draw from. Many families have gone from two incomes to one, creating a strain on the household finances. So what are some money saving ideas we can employ during a time like this?
Money Saving Strategies During Hard Times
1. Automate your savings.
The important thing to do is start small; make a plan and stick to it. Most banks offer an automatic monthly or weekly transfer from a checking account to a high yield savings account. This will force you to save money and in most cases it comes with the added benefit of a free savings account. “Keep The Change” from Bank of America is another popular automatic saving program that rounds up debit card purchases to the nearest dollar and deposits that remainder into a savings account.
2. Save your extra change.
Trying times like these call for creativity when it comes to money management. One easy way to start an emergency cash fund at home is with a technique I like to call “Give Me Five”. Whenever you make a cash purchase and you get one or more 5 dollar bills as change, tuck those away in a designated envelope and do not spend them no matter how tempting it might be.
3. Take advantage of low stock prices.
A struggling economy does have its advantages from an investor’s standpoint: just think of the opportunities that a downturn can present us. A lot of things of value may now be cheaper in price — for example, discounted stocks. Transferring funds from a low yield savings account to an online stock trading service can be a smart strategy and a great way to make your savings grow more rapidly. You will sacrifice some liquidity but you will increase you earning potential if you choose winning stocks. Save yourself expensive broker fees and account management costs by handling your portfolio yourself. There are plenty of stock trading tools online to help you make informed decisions about your investments, so be smart and turn your savings into income.
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