Saving even when you feel you can’t
October 17th, 2005 | by mbhunter |The Women In Red’s MP Dunleavey writes on how to Save Big on a Tiny Income.
Some of the money-saving advice is standard fare — buy generic, save up for periodic expenses, buy in bulk, sock away some portion of your purchases according to some rules, like putting the spare change in a jar or rounding up purchases in your check register. (This last trick is not for everyone, like my wife, who likes to balance the checkbook down to the penny. But if it makes it easier to save, then I’m all for it!)
Others, also relatively well-known, deal with extending the life of what you have or dressing up second-hand items.
One that I hadn’t heard before, and is quoted here for your viewing pleasure:
9. Switch from paper to plastic. A surprising number of women are mega-advocates of relying on credit cards as a way of controlling spending. Some get cash back or miles; some just feel handling cash is too risky. “I don’t carry cash, I don’t use cash,” writes Chris. “This has helped to curb impulse spending, which equates to effective saving.” (Caveat: These responsible souls pay the card balance in full each month, often depositing the cash for purchases in advance. Ahem!)
This is backwards from the traditional advice, which is to cut up your credit cards, because there is the temptation to spend more with a credit card. Statistics back this up; average purchases are quite a bit higher when they’re made with credit instead of cash — like 12% higher. (Or is it 112% higher? I see both, but the 12% figure seems closer to what I remember.)
The tricks here are to make purchases as if you’re paying cash, which is hard to do because you don’t have the kinesthetic reinforcement of the money leaving your hand. That, and make sure you pay your balance off in full. Rebate cards (like the ones pictures on the left sidebar) can make your purchases a little bit cheaper if you follow these two pieces of advice, but miss a payment or overcharge, and those savings are gone — and then some!
4 Responses to “Saving even when you feel you can’t”
By Jane Dough on Oct 18, 2005 | Reply
I used to read Dunleavy regularly a couple of years ago – but now I feel like I have really grown beyond her column. It can be interesting, but more often than not I feel like I now know more than she does.
By mbhunter on Oct 22, 2005 | Reply
Hi Jane — sometimes I agree. I suppose that with as wide a net as MSN.com is casting, the writers need to cater to a general audience, so if the writing comes off as a bit watered down, that might be why.
By Sarah on Oct 28, 2005 | Reply
I’m a big fan of credit cards handled responsibly. Last night I ordered a new digital camera and matching docking station from Amazon (I need it for work and our old one is dying and officially unreliable).
I put in all the Amazon credit card rewards gift certificates that I had laying around. It turned out to be… free. I liked that a lot, especially considering that all the rewards were just for normal spending.