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Trimming The Fat To Boost Savings

Finding a way to stash money away for unexpected life events can be tricky, especially the way our economy is today. As difficult as it is, saving is something that we Americans don't do much of, and it is hurting us dearly.

Most of us do not have a savings account, or if we do it is too small to think about. Difficult decisions face us every day; whether to pay the electric bill or buy groceries, buy the kids new shoes or take them to the dentist; there seems like there just isn't enough money to go around, and dreams about savings accounts fly right out of the window. There is hope. You can do small things every day to save money and grow your savings. Here are a few ideas.

First, be objective about your finances. You really need to be honest when you do this, because if you are not brutally truthful, the only ones you are hurting are yourself and your family. Sit down and think about your financial state of the union, and don't sugarcoat anything. If the expense isn't a necessity or isn't benefiting you any longer, get rid of it.

Daily spending is usually the first place that can be trimmed down. Do you visit Starbucks in the morning before work? If you do, your latte could be costing you up to $130 dollars a month. If you put that $130 dollars a month into an interest bearing savings account that bore 4% each month, at the end of a year instead of spending $1,560 in coffee you could have $1622.40 sitting in your bank account.

Do you smoke? Besides the dire health consequences, lighting up has dire financial consequences as well. If your habit has you smoking a pack of cigarettes a day, that adds up to $270 a month. If you put that $270 a month into that same interest bearing savings account at 4%, instead of burning up $3,240 a year you could be growing $3,369.70 a year in the bank.

Next take a hard look at your monthly credit card or checkbook statements. Where do you usually spend most of your money? Is it at the grocer story or gas station? What about department stores, restaurants, or salons? Do you spend a lot shopping online? What about unplanned purchases? These areas can usually be trimmed down or eliminated all together to free up much needed funds.

You may wonder why you should bother giving up all these nice little things that make life worth living. Well, it's because nobody ever sees a crisis coming; problems usually don't call and leave a nice little message reminding you to have all of your ducks in a row for when it hits the fan. Unexpected car troubles, an ill child, a sick parent, an illness or injury that requires being out of work for awhile. These things are all facts of life, and the facts are that most Americans cannot pay for these things when they arrive because they are not prepared. So what happens is these expenses get put on plastic or get a payday loan advance taken out for them, complete with teeny tiny complicated small print and sinkholes. Before you know it, things have become so bad so quickly you can't see the light of day, and panic sets in. This is the kind of thing we all need to be prepared for, because it can happen to any of us, at any time, with no warning. Preparation is the best medicine.

About The Author

By: Nicholas Hunt

Nicholas writes for Your Banking Guide, where you can compare bank accounts including savings accounts with high interest payments.