Have you ever had the feeling that someone’s cut a hole in your pocket and your money is slowly falling out? I’ve experienced that over the past couple of weeks, and here’s how I plan on sewing the hole shut. I’ve come up with four ways I can save money, starting right now and I plan on doing it all week. Here’s the list:
Four things I’m doing to save money this week:
– Van pooling. I have the option to ride a van in to work. The upside: It’s $50 a month and I normally spend $15 each day on gasoline alone. In 3 days it has easily paid for itself if I include wear and tear on my aging car. The downside: I have to get up at 5:00 AM to catch the bus.
– No vending. This is a hard one, because I’m a sucker for that impulse Snickers bar purchase. Gas prices have forced our vendors to raise the prices to an average of a dollar per item. It might not seem like much, but that’s potentially hundreds a year.
– Brown bagging it. I’ve heard that eating out regularly can cost us more in a month than a car payment. It’s pretty easy math, at $5 to $10 a day, that can come to $150 to $300, and that’s if one avoids the more expensive places. Last night’s leftovers or a home-made sandwich cost a lot less per meal (and are probably better for me).
– No impulse buys. I need to keep living my own advice about frugal shopping. I noticed small items just seem to land in my basket at the store — items I’m better off without.
Ok, so that’s not a big list, but I’d like to think I try to save money day by day. If you add up all the things I’m doing to save money, if I did them every week for a year… I’d save at least $5,000!
Multiple Benefits to Saving Money
Sometimes it’s the mistakes we make that teach us the most. I just read an article from someone who made a small fortune out of a much larger fortune, and the lessons the author learned from his experience provide some powerful lessons on investing. I thought I’d comment on them and add a few of my own lessons.
Bruce “Tog” Tognazzini became a millionaire when Apple computer went public way back in 1980 (apparently there was money to be made in the stock market before the internet). He then promptly began looking for ways to maximize his fortunes, and stumbled along the way. He wrote a list of nine lessons learned. Here are my favorites:
“The only way anyone other than you can make a single penny from your stock is to get you to sell it.” Oh, wait, I don’t own any stock outside of a pittance in mutual funds. But when I do own some stock, I’ll have to remember that lesson.
“$1000 is not pocket change” I think this applies to everyone, right here, right now. Budgeting has taught me how I used to spend lots of money thinking of it as small chunks. For most of us I think $100 is small change, but $1000 will work fine, because a million is just 1000 times 1000. Start with a cool million in the bank. Blow a grand a day (you know it’s possible) and you’re broke in 3 years.
“Don’t devour your chickens before they hatch” Delayed gratification is a wonderful thing. I really wish I had practiced this a few times over the last few years. Want something? Save for it. That brings me to my own life lessons:
“Avoid credit cards like the plague” That’s my opinion anyway. It goes right along with the $1000 lesson and the chicken devouring lesson. It is very easy to drop a grand on a credit card (new TV, Computer, furniture) and feel like nothings happened – at least that’s my experience. What’s worse is that you end up paying interest and loose the opportunity to earn with that money. Currently, I’m getting rid of my credit card debt.
“Invest in your future” Retirement, college, rainy days, weddings (or some combination of those) lie in our futures. “Tog” may have had a few missteps along the way, but he had some cash left at the end of it all. And for all he knew, Apple stock could have tanked in the 1980’s leaving him with nothing. That’s one of the risks in keeping your employer’s stock. But I’m certain there are people who’ve gotten rich on stocks, the lottery or inheritance that blew it all and ended up in bankruptcy court. I think it’s better to take the risks of the market than face certain financial doom.
How to Teach About Investing (Without Boring the Student)
Normally I don’t write articles like this, but I found a neat way to introduce my kids to investing, or at least find a great gift for my investor friends and family, so I thought I’d share the find with everyone.
It seems that we buy too many things that drop in value almost immediately these days, so the idea of giving stock (which hopefully will go up eventually) sounds like a good idea. But it’s also hard to package something like that. Not to mention that I’m not exactly in a position to go online and get 100 shares for something for someone (although I’m sure they wouldn’t mind).
I also want my kids to learn:
– What it means to own a share of a company.
– What it means to invest.
– That saving and investing can be slightly more entertaining than a savings bond.
My boy is into baseball cards, but those apparently are almost worthless now. I wanted something with some value in it, but something in addition to a monthly bank statement.
Then I found a place where I could buy a single share of a company like Disney and have a colorful certificate framed for the kids to see. OneShare.com sells single stocks and sends a framed certificate as a reminder. I think they look pretty cool. They also have about 100 different companies they work with, there’s a selection for everyone. This could make a great gift for the adults I know.
They cost more than a share of the stock would run you on an online trading site, but you also get more for your money. And seeing how much I’ve spent on things that don’t last, I think this is worth a try. Besides, if you go to OneShare.com through 7/31/06 and use FREESHIP when you checkout, your shipping is free.