Let Small Savings Add Up

Most of us need to save money — to pay off debts, pay for college or sock away for retirement. That’s easier said than done, but saving significant sums isn’t impossible. One strategy is to save small sums — repeatedly.

The classic example is that costly cup of coffee many of us buy daily. If you’re forking over, say, $4 for each one and you buy one every weekday, that’s costing you about $1,000 per year! Brew your own coffee at home (or at work) and you can save quite a lot.

If you’re a smoker, you have a powerful money-saving opportunity: Kick the habit. A single pack of smokes costs $8 or more in many places, so one pack a day can cost $3,000 or more annually for lots of smokers. Two packs a day? Double that. Better still, quitting can add years to your life, and may reduce your overall health care spending as well.

Many of us enjoy meals at restaurants regularly. If you spend around $50, on average, each time you (and perhaps your spouse or family) eat out, and you do so twice a week, that’s costing you roughly $5,000 annually. Eat out half as often (and perhaps skip the appetizers or drinks), and you can save thousands of dollars. If you pack your own lunch instead of buying one every weekday, you might save $5 to $10 each day, totaling well over $1,000 in savings each year.

Other ways to save include trading babysitting services with friends instead of hiring babysitters, and streaming your entertainment at home instead of paying $10 or $20 for a ticket and popcorn at your local cinema. Shopping around for a better-priced cellphone plan or a better deal on car or home insurance can also pay off handsomely. So can simply calling your credit card company and asking for a lower interest rate or for your annual fee to be waived.

Little sums saved regularly will add up to large sums that can make your financial future more secure.