One of my whole reasons for starting this blog was a feeling of dissatisfaction with the "Save money! Now!" articles that kept popping up on my computer screen. They seemed to be geared towards people with money to spare who were temporarily squeezed or simply looking to be smarter with their money.
I came across this article today, though, on Yahoo. While it falls into some of the same traps, concerning ATM fees, collecting your spare change daily, and coffee-house coffee, and assuming a decent credit history/bank account, there is some information that is helpful.
"Know how you use plastic" - a sound piece of advice, because it is easy to deny your own habits. This is something about which I have had to be honest with myself. For me, if my card is getting too much of a work out, a mental reminder isn't enough. Physically removing it from my wallet/purse, and putting it someplace where it is inconvenient to access helps. Someplace like a box, tucked away in the closet, or the freezer, in a bag filled with water. Having to de-clutter a closet or defrost a card will make you think twice about using that card.
"Are you really going to pay yourself first." - I like direct deposit, and my automatically deducted retirement plan payments. Splitting your direct deposit amongst savings versus spending accounts is a great way to ensure money is getting saved. But, this pre-supposes that you have a job who will do direct deposit (which does seem to be more frequent now), and that you have a bank account. I used to think that everyone did, but have learned that grown-up does not equal bank account, for various reasons. If you live a cash-only life, I'm not sure what to tell you, other than the envelope method sounds like a good place to start.
"Have paychecks deposit paychecks into savings account" - again, presupposes a bank account... see above?
"Allow yourself only one ATM withdrawal per week" - How about avoid ATM withdrawals at all costs? I'm thinking of the fees involved. The article seems to be thinking that if you automatically get cash back off of every debit card transaction, you are not fully aware of how much cash you are spending, which is true. Taking a moment to think about your expected cash needs for a given time period, and then using only that money is a safe way to go about using cash.
"Record credit card purchases as you make them in your check register" - I like the idea behind this: keeping track of CC spending, as if it were debit card spending. Not only does it help you keep track of your spending, but it also ensures that you will have the money to pay the bill, and pay it off. So, no late or missed payments, plus, you'll be able to pay off the balance monthly (assuming you start doing this at a 0 balance, yada, yada...) It is the application where I am weary. My uneasiness stems from the fact that I live almost a cashless existence. If I have cash, I will spend it like water. So, that means I use my card a lot. So, I should be recording everything, but the simple truth is I don't. Do I need to do some serious behavior modification, probably.
"Save your spare change" - I guess these guys are trying to cover all bases by talking about ways to save with CCs and with cash. I can attest to the value of saving spare change, having helped collect over $100 in coins, mainly pennies, from my mother-in-law's house when they moved. Should you start using cash more in order to have change to save? Should you stop spending change in order to collect it up as a holiday stash? I'm inclined to say no. If you use cash, and have change, save it. If you are currently using change to buy bread and milk, keep on. So, this is a good idea, but I'm not sure that I would drastically alter my behavior in order to do so.
"Bag the savings from taking your lunch" - An interesting idea. Seems to be a lot of work if you aren't using cash to buy your lunch in the first place (at least a lot of work for your mouse, if you online bank, or for your teller, if you go in daily to transfer $5 from checking to savings). I suppose you could always just say at the end of the week "I took my lunch X number of days, so I saved Y," and transfer that. But then, I wouldn't have written out my entire thought process. And what fun would that be. So, yes, this is a good idea, but what about people who are taking their lunch because that $5 lunch excursion would have equaled no rent money? C'mon, guys, these are the kinds of things I contemplate.
"Pay yourself once you've paid off a debt" - I like this. If you don't have other debt you'd rather put the money towards, this is great. I don't think I can be reminded about this enough. I admit it, I am tempted to keep up with various different Joneses sometimes. A reminder to keep paying myself and my future is always good.
"Give yourself time to think about purchases." - my husband does this, the "it'll be here tomorrow; if not, I wasn't meant to have it." Frustrates me sometimes. But, I realize the wisdom in it. We don't usually go back for the item, or if we do, it is gone. Honestly, can't remember what it is we haven't bought.
Alright, there you have a little insight into my brain. What do you think? Did you like the article? Am I being too nit-picky, or not nit-picky enough?