How To Save Money in 2010

December 7, 2009

With the economy still struggling to recovery, many may be resolving to save more money in 2010 when the clock strikes midnight on New Year's Eve. But unless would-be savers can critically examine their finances and make small daily sacrifices, saving money will be a daunting challenge. Taking the hurdles one step at a time is the best way to put money away for a rainy day. After all, as Benjamin Franklin once said, "A penny saved is a penny earned."

Little Changes Make Big Pocket ChangeRather than goaling an aggressive savings plan for the entire calendar year, try breaking down the resolution to save money into small parts. Focus on how you plan to save money, wherever you can cut 50 cents or whatever you can do without. There's no need to take all the joy out of life, but minimizing how often one "splurges" on a new outfit, a weekend vacation, or a big grocery bill can add up quickly.

Try these strategies to curb spending and stash some cash:

* Save on fuel. "Driving at 55 miles per hour, instead of 70, will save the equivalent of roughly 70 cents a gallon," says Jason Zweig of Financially Fit. Drivers can also save on gas by starting the car after they're belted and ready to set out. If it's possible, walking or biking to work during warmer months can save hundreds of dollars a year.
* Save on energy. Regulating the temperature in the home can save big on heating and airconditioning bills. Put on a sweater before turning up the heat during winter and run a fan until it's too warm in the house during summer.
* Save on food. Americans spend almost 40% of their food budget on dining out. Instead of buying lunch, pack one. Try to limit dinners out to two or three times a month and instead, cook at home. Investing in a cooking class or a good cookbook can save money for years to come. And grocery shoppers would do wise to stick to the list, as impulse spending can cost hundreds a year if not contained.
* Save on entertainment. Local libraries offer wide selections of books and DVDs, so there's no need to run up that bill at Amazon or Netflix. Cancel rental subscriptions and give it a try; which could save as much as $20 a month.
* Save on mistakes. Keeping a detailed budget and sticking to it can help to avoid mistakes in calculations, which often result in pricey overdraft fees. If the money isn't there, don't spend it - it's that simple. Start an Excel database or keep a manual check register to be sure that what gets spent can be spent. Paying bank fees is a quick way to counteract all those steps toward saving.
* Save the change. Designate a place to keep loose change and stick to it. Forgotten nickels and dimes add up over time, and even $50 in one year can turn into a profit with a good interest-rate savings account.

Save For the Future

Speaking of interrst rates, all of the pennies saved from these daily changes should do more than just sit in a checking account. Looking forward to the years beyond 2010 and a financially better future, money saved should be put to work. Consider a high interest rate bank, like INGDirect, to make the most of it.

Some banks offer incentive programs like "Keep the Change" from Bank of America, which allows spenders to round purchases up to the next dollar and transfer the change into a savings account. Though these aren't high-interest rate, the small amounts do add up quickly. And, in some cases, banks will match the total savings for the first year, instantly doubling this investment.

With just a few small sacrifices and some smart money choices, it's possible to start a successful savings account in 2010. As with anything, persistence and committment can help a would-be saver really rack up a nice financial cushion in the next year.