I have a big gripe with financial advisors, namely that they howl endlessly about saving for the future. While I don’t want to minimize the importance of this, I do believe that the word ‘savings’ has a broader meaning for those of us who ascribe to the importance of livimg For today.
Either way, the end goal is to spend less than you earn. And there are plenty of often-overlooked ways to do this, as I will now share with you:
1. Increase Your 401K & SEP IRA: OK, call me a kiss-up for wanting to make good with the financial advisory world that I just smacked down! But it does make sense to build a savings nest through a defined contribution plan such as a 401K (if you are a W-2 employee) or a Simplified Employee Pension (SEP IRA) if you are self-employed. Both offer a great way to tuck away a few dollars, combined with significant tax savings. So if your money guru recommends one of these options, be sure to listen up.
2. Revisit Your Geographic Choice: I really love living in Denver. But the Mile-High City’s distinction as one of Forbes Magazine’s 10 Fastest-Growing Locales has led to explosive housing costs and an overall cost-of-living that is becoming unreasonable to many who live here. I find myself counted among those exploring a move to another state in order to keep more of what I earn. Key considerations to assess before settling down in another locale include the aforementioned housing expenses, property taxes, and the accessibility of alternative forms of transportation.
3. Gold/Silver Plans: Lately, there has been a spate of online portals popping up that provide cool options for investing in gold and silver. I happen to be super-intrigued by AnthemVault of course, physical gold and silver being stable assets that have endured the test of time.
4. Automatic Deduction: If you are undisciplined with putting money aside, check with your financial institution about having a certain amount deducted from your checking account each month. Having it taken out automatically allows you to form good habits around tucking money away for emergencies or for long-term investment gains.
5. Tracking Expenses: Coffee here, lunch there. It’s amazing how much money can leak out when you are not paying attention to your spending. The good news is that there are some great tools to provide a nice dashboard for monitoring your outflow. Mint.com is perhaps the most recognizable. And banking futurist Brett King’s Moven app is a real gem. Me, I love the simplicity of the Spending Tracker app for keeping tabs on money coming in and going out. This tool has been big for me, given my propensity to blow small yet frequent amounts at coffee houses and bookstores.
6. Tax Free Write-Offs: Tom Wheelwright, author of Tax Free Wealth, touts tax write-offs as the best way to save money, bar none! In particular, there are enormous benefits accrued to those who have a small business, even if it’s only a side business. To take advantage of this, get into the habit of collecting receipts and documenting expenses. It’s also useful to have a CPA or wealth advisor on your side who is savvy about garnering for you every legal tax advantage under the sun.
7. Create a Fun Fund: Decide upon a fun purpose for some of the money you save and then find a place to park it. That’s the advice offered by my friends Chris & Marlow Felton in their book Couples Money. They advocate establishing a Fun Fund to tap into at the appropriate point, to enjoy the finer things in life.
8. Reward Programs & Freemiums: There is plenty of free stuff and discounts to be had if you just put a little effort into identifying these sweet deals. From restaurant perks to travel discounts, ways to save money abound. I could ramble on and on about this, but here’s just one for you book-lovers out there. It’s called Bookbub and it provides you with a daily email highlighting insanely great deals on Amazon books. So it’s worth checking out if you are infected with bibliofilia.
9. Tap Into The Sharing Economy: I ditched my car when I moved to Denver in 2010. And quite frankly, it’s been without a doubt my best source of personal savings: no car payment, maintenance, gas, auto registration, or liability for parking tickets. So how do I get by? Ride services Uber and Lyft make it a piece of cake to summon a car for those infrequent treks from one end of town to the other. For longer trips, renting at Car2Go rocks! And if you are into foot power, check out the WalkScore for where you live. You may be amazed at the number of places that are only a stone’s throw away on foot: the ultimate in transportation savings.