Five Simple Saving Strategies Part 2

Tax Planning

The following post is an excerpt, with permission, from Beyond Paycheck to Paycheck, by Michael B. Rubin, named one of five books to help your career by  The Savings Solution discusses the following saving strategies extensively.  Both books (and ebooks) are true conversations and are available at

Here are the second five of ten easy strategies to increase your savings level without becoming cheap.  The first five are posted here.


 Strategy 6:  Enjoy being with people you like.

Your friends make the evening enjoyable—not the menu design or the lighting where you meet. When a few friends suggest meeting for dinner, it’s perfectly fine to suggest a place you loved when you had less money.  That place is probably less expensive than the trendy yuppie restaurant that just opened. Many of your friends (but not all) will be thrilled to spend $15 on the evening’s food rather than $35.  They just lack the courage to propose an alternative to the comparatively free-spending organizers.  Don’t be surprised if one or two of your friends thanks you for your suggestion—in private.

Strategy 7:  Don’t blow off the recurring minor.

Small recurring expenses aren’t truly minor. Examples include your cable bill, your cell phone plan, and your morning coffee.  Estimate the cost of such expenses for a full year. Are you comfortable with that level of spending?

There is no right or wrong answer here—it’s a personal decision. Some people need their coffee every morning and it’s something they look forward to from the moment they wake up.  But other people spend $5 every weekday morning ($1,300 annually) just to delay getting to the office for another few minutes.

Regardless, don’t try to change all your habits at once, but see if you can find at least one minor recurring expense to cut.  Perhaps lose the premium cable channel you never actually watch.  Or switch to a lower minutes­­–per-month cell phone plan.  Minor expenses aren’t really minor if they last a long time.

Strategy 8:  Spend with comfort on items or experiences you value highly.

As with time management, you cannot prioritize all financial desires as “highly important.”  Life requires choices. Not prioritizing your spending is itself a choice.  Often, the result is giving up control, because you run out of money at an inopportune time.

A better approach is to prioritize your desires.  When you know what you truly value, you can spend on those things with no guilt. Enjoy! Sacrifice what is not important to you. Few people have enough money for unlimited discretionary expenses, and you are not one of those people.  So enjoy whatever you value highly and limit the discretionary expenses you do not.

Strategy 9:  You won’t spend what you don’t see.

Think about a friend with a similar lifestyle who makes 10 percent more than you.  Seems she should be able to save about 10 percent more of her pay, right?

You: No doubt.  We go out together and shop at the same stores. It definitely seems like we spend about the same.  I just don’t know why she can’t save more given she makes more than I do!

Good.  The same is true about you because somewhere someone is looking at you in the same way.  This person makes 10 percent less than you do—and thinks you could save 10 percent of your pay without much effort.

You: Hey!

Suddenly saving this much might seem hard if you don’t know what you’re spending that “extra” 10 percent on. If your spending is limited only by the money you have available, the money just seems to disappear.  The solution is to create a forced savings program, in which a percentage of your income, say 10 percent, is redirected into savings without your ever “seeing it.”

If you spend the money you have available (but not more), you quickly learn to spend less. You must, because the missing 10 percent isn’t sitting in your checking account.  The earlier in your career you participate in a forced savings program, the easier it is to do successfully, so don’t delay.  When you just start out, any pay is big pay.

Strategy 10:  Constant budgeting isn’t required.

While some swear by it, I am not a fan of constant budgeting because I find the task too inflexible to deal with life’s spontaneity.  Still, it is appropriate to prepare a budget when committing to a significant nondiscretionary expense.  Evaluate what you can afford based on your income level and spending history.  Don’t take the salesperson’s word that you can afford what he’s showing you.

However, if you prioritize your values and commence a forced savings program, you will consistently meet any strict budget objectives you would otherwise put together.  To me, that’s a better way to live.

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