Small Savings Equal Big Rewards

Whether you’re saving for retirement, a long term goal, next year’s vacation or just a day at the spa, it’s the small steps we can take that often add up very quickly. It’s instinctive to seek the least painful way to go about any goal. All too often we equate savings with denial. Actually it’s the reverse. Paying yourself first can be hugely rewarding in the long term. Let’s look at several options for saving assuming you’re looking at a short term savings objective to be met in less than a year. Try these steps and you’ll be on your way to reaching your goal.

  • Spare Change. The vast majority of Americans no longer carry cash, but use debit and credit cards. The days of collecting spare chain in a jar have passed. The banks have caught on to this and most are offering very enticing programs. Check out your bank’s option on their website or at the local branch. Often the scenarios are as follows. Swipe your card for a $1.50 purchase and the ‘change’ of $.50 is transferred to a designated savings account. Frequently the bank will match these deposits with a 5­10% bonus over a 12 month period. This spare change can add up quickly.
  • Deferred Gratification. Consider the amount spent on one movie ticket, pizza night or deli lunch. Pay yourself this amount each week by setting up an automatic transfer into the account designated above.

In order to meet your goal, break it down into smaller pieces. How much do you need to save each week to have your desired sum in 12 months from now? Between the ‘keep the change’ savings option, weekly deferred gratification, consider setting up either an additional weekly transfer to meet your goal or spending an extra 10­12 hours a week at a part time job. You’ll have met your goal before you realize it. More likely than not, it won’t be as painful as you think! Good luck!