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Money Saving Tips for Financial Security

Reduced Spending, Investing and Fiscal Management in a Bad Economy

Aug 18, 2009 Subha Ekambaram

Staying within a budget, building a 6-12 month emergency fund and cutting non-essential recurring expenditures are some ways to ensure to financial security.

It is possible to ensure financial stability, by following some simple money saving, investing tips. Identifying and eliminating non-essential expenditure, redirecting unspent money to savings accounts, frugal living, staying within a budget, comparison shopping for essentials are some ways to make peace with one's financial situation.

How to Cut Spending and Boost Savings

Recurring expenditures that seem non-essential, like a gym membership, an extra phone line and high end cable channels are the easiest places to begin to cut spending.
Use of coupons to shop for groceries and buying seasonal produce can reduce monthly expenditure.
Finding a carpool partner is one way to save on gas.
For those seeking an aggressive savings plan, having a portion of income sent automatically to a savings or investment account is a good option.
Have the remaining money that's meant for spending sent to two checking accounts. One of the checking accounts is for paying bills. The other checking account is for day-to-day expenditure. Have a self-imposed limit to withdrawing money from day-to-day expenditure account to control spending.

The New Emergency Fund Rule- How to Have a Bigger Cash Cushion in case of Job Loss

The new rule to emergency funds in a bad economy is six months of expenditure, and as much as 12 months' expenditure if kids are involved or if there is only one income. A bigger safety net is needed because, according to the Bureau of Labor Statistics, the average length of unemployment has risen from 4.5 months in 2008 to 6 months in 2009. The emergency fund can be kept in a high yield savings account and a short-term bond index fund.

If its hard to save money to throw into an emergency fund, consider temporarily redirecting 401(k) contributions that are made over the company's match. If there is sufficient equity in the home, a home-equity line of credit could be a backup plan.

How to Streamline Finances for Easy Management

Consolidate bank accounts to one institution.
Roll over old 401(k)s into one IRA
Keep only two credit cards in wallet
Choose to pay bills online
Sign up for banking alerts to signal that payments are due so penalties can be avoided.

Being smart about spending and saving can make the difference between enjoying financial freedom and experiencing a life-long debt situation. Simple, every day choices of frugal living, informed investing and fiscal awareness could help lead a life of mental peace and material prosperity.

Source

Money and Main Street, How Today's Economic Events are Affecting Americans, Editors of Money Magazine, [Money, August 2009]

The copyright of the article Money Saving Tips for Financial Security in Personal Budgeting/Finance is owned by Subha Ekambaram. Permission to republish Money Saving Tips for Financial Security in print or online must be granted by the author in writing.

Save 6-12 Month Expenditure for Emergency Funds