The Ways We Save 8

Today is the last installment in The Way We Save series that came from y'all. Thanks again for sharing your fabulous stories and ideas. And here's hoping that everyone got a new idea or two from the stores in this series.

Saving doesn't always mean giving up something you like to buy. Sometimes you can buy the things you really want just be being aware of how you're using your money. Andrea says:

When I reach the maximum EI and CPP contributions for the year, I take out those amounts each paycheque and put them into a short-term savings account. I got the idea when I realized that there was a maximum yearly contribution because I don't want to get used to having the extra money in my chequing account, only to have that extra money go away when the contributions restart in January.

The amount depends on how much I get paid every year, but the EI saves me about $500-550 and the CPP about $250-300.  The EI money is earmarked for Christmas; I figure out how much money I will save from EI and that becomes my Christmas budget. When the bills come in January, I just have to transfer the money over. It's a really nice feeling.  The CPP money is for splurges. Sometimes I have a specific goal in mind, but usually it turns into pretty dresses and shoes.

When you have kids, the money you spend can seem to be endless unless you keep a firm hand on your budget. Save in one place so you can spend somewhere else that's a bigger priority, like Anna does:

We have a family of four and $500 per month for all groceries and personal care items.  Because 2 of the 4 are toddlers and very messy, I do a lot of laundry so I found a recipe for homemade laundry detergent.I calculated that it costs less than a penny per load.  I found the recipe online while looking for cheap recipe ideas, it was in one of the side bars and I had an epiphany. We end up saving about $21 per month with this strategy.  We're able to afford infant cereal so I worry less about them getting the correct nutrients and every so often we buy me a pack of Boost when it's on sale.

Teaching children to save is an important part of their financial education, especially if you want them to be smarter about their money than you were. So says Melanie:

My husband and I had to learn our money lessons the hard way.  We are determined not to let that happen to the girls, we are trying very hard to empower them to make smart money choices.  When we give them money for chores, they have to put some in a special trip piggy bank (to save for road trips), they have to put some in a saving bank for their bank account and then they can spend what is left.  Last May when we took a trip to Montreal, they both had lots of spending money and were motivated to save even more when they hot home. Wish we had learned that at their age.

Saving is also all about knowing what's important to you. Trying to have it all at the same time can destroy your financial plan; knowing what you can do without… that's key to getting what you think IS important. Here's Michele:

Okay, call me old-fashioned but I have so far resisted getting a 'smart phone'.  I just can't stomach the cost of the contracts.  My husband has an iPhone with a minimum monthly charge of $60 and a contract of 3 years, at a cost of $2160 overall.  I on the other hand, have a phone that only costs me $25/month and an iPod Touch.  The only thing I give up is the 3G connection – I have to be somewhere with WiFi to get the internet. And I'll have saved about $800.  And I've had this phone long enough to run out my contract and Bell still has to honour those same charges.  I don't think they even offer contracts that cheap anymore! So that's one way I save money.

The other is to avoid getting a fancy car.  We got a great, reliable Hyundai from the repo lot.  Saved a heap of money, about $3500 because we also found one that had been scratched up – we suspect it was done by the original owner, when he discovered his car was being repossessed.  By paying less than $7000 for a 5 year old car, we saved a heap of cash.  And we were able to pay cash for the heap!  We live in Calgary, where hail is a guaranteed annual occurrence.  And hazard.  We haven't repaired the hail damage to the top of the car, since the scratches were already there.  So, yes the car looks a little like some college student's beast, but it's paid for, runs like a top, and nobody's going to steal it!

These are not glamorous ideas, but they've worked for us.  And by the way, our total debt less than 30% of the value of the house we live in – and we've lived here for only 3 years.  Plus we have another house, of equal value which is rented out right now.

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Kelly, you won Tuesday's prize. Tara, you won Wednesday's. I've given your emails to Cassie to contact you directly.

Today is Day Four of the giveaway of Casssie Howard's (MrsJanuary.com) Money In Your Pocket, which focuses on saving money on your grocery bills. To enter, answer the question of the day in the comments. Today's question: What's the biggest single savings you made on something you bought, and what did you do with the "savings"?

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