Save Now So You Can Spend Later

Why is saving a dollar important? Every dollar that you save now can be invested and then be available to you in the future. For example, one dollar invested at six percent for 30 years results in $5.74. So for every $1,000 you save and invest now, you will have $5,740 in 30 years. In 40 years you will have $10,290 and in 50 years $18,420. That’s real money!

Here are some savings tips that will benefit you and your wallet.

• Make savings your number one priority. After you pay the essential bills like mortgage or rent, utilities, car payment, taxes and the like, pay yourself by adding money to your savings account.
  
• Make extra payments on your mortgage. Just a few more dollars each month will reduce your principal and reduce your number of mortgage payments.
  
• If you refinance any loans, invest the money you save on your payments rather than spend it.
  
• Downsize your wants and needs. Do you really need the largest SUV on the market? Wouldn't a midsize model do? Will the latest HDTV really make you happy? If you must own it, wait a year or so until it comes down in price. Is a 5,000 square foot house necessary? Wouldn't a 3,500 square foot model do? The money saved by downsizing just a bit, could fund a financially carefree retirement.
  
• Cut back on those frequent seemingly “small” expenses, which add up to a considerable sum of money. For example, eating lunch out and eating snacks from a vending machine costs real money.
  
• Share your kids’ toys with your neighbors. Does every family in the neighborhood need a basketball hoop in their driveway?
  
• If you smoke, stop. You will save a small fortune and you might save your life as well. A pack-per-day smoker spends $1,000 to $1,500 each year. That’s enough money, if invested each year, to fund a modest retirement account.
  
• Save money for a purchase and then pay cash instead of using credit cards. You will reduce your impulsive buying and be free of outrageous interest payments.
  
• Teach your children the value of a dollar. Maybe they will be content with low-cost sneakers and affordable jeans. Put away the money saved for their college education.
  
• Does junior really need a cell phone? Those monthly cell charges, if invested instead, would make a considerable nest egg over time.
  
• Break the bottle water habit - drink tap water, which tastes as good and costs a lot less.