Saving for Rainy Days

To the wise spender, money is not merely something to be expended, but also to be invested and saved. One has to break the pay-cheque-to-pay-cheque cycle and start reserving funds for future needs. Rich or poor, everybody will go through what is called rainy days, or trying times. When such moment comes to your life, it is specially relieving to know you have set aside some amount for emergencies. Here are practical tips to control spending:

1. Reduce telephone extras –- rid of costly frills and consider cancelling additional services like call waiting and caller ID. Opt free directory assistance services. Control long-distance calls via landlines, use prepaid phone cards or cellular phones, instead.

2. Feel-good financial tricks -– a sizeable tax refund can be tempting to spend. Adjust your monthly withholding tax and pay just what is right. Pay in cash, not on credit. Living within your means is good, but living one pay raise behind is better. Any increase in your income will directly go to your savings or investments.

3. Stretch clothing budget –- shop smarter by buying clothes that are versatile and easy to mix-and-match. Buy wash-and-wear clothes for daily use and dry-clean-only for special events. Hold a yard sale of unworn clothing.

4. Rev up car savings –- plan an efficient itinerary, combine errands into one trip, and take the shortest route to save time and gas. Buy retread tires because they are cheaper, safe, and environment-friendly. Burn less fuel by taking it easy behind the wheels - accelerate and brake gradually.

5. Insurance savings –- cut on policies that you can do without. Working couples may get only one medical coverage and opt for the best deal offered by one employer. Maintain a good credit rating to get good insurance scores.

6. Savings from eating right –- whenever possible, dine at new restaurants to enjoy grand-opening promotions. Hunt for discounts and coupons. Cut back on caffeine costs by making your own coffee at home or in the office pantry. Prepare your meals instead of buying from fast food.

7. Affordable entertainment –- go for inexpensive fun through home entertainment. Reduce unneeded subscriptions like magazines and cable programming.

By examining daily expenditures and looking for ways to slash spending, you can stop your account balance from running low, allowing you to relax on a rainy day.

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