Monday, January 14, 2008

Save some SERIOUS money - quickly!

I assume we have all heard the old adage, "Watch your pennies, and the dollars will take care of themselves", right? Not a bad piece of advice. But there has to be a faster way of getting those dollars, right? Yep, and I actually heard about it from a very unlikely source.

I don't want to talk politics here, as this is not what the blog is about. However, I do listen to Neal Boortz occasionally. Sometimes Boortz has me saying "Right ON!", and other times he makes me want to tear my hair out. But he's almost always good for a laugh, regardless of which side of the political fence you sit on...maybe because he just doesn't care who he offends. Anyway, I digress...

So I happened to catch a few minutes of his show one day, and he talked about some advice he had gotten from someone when he was younger. What astounding, life changing advice was this? Do not spend your dollars. Huh? Say what? Don't spend my dollars? What kind of crazy idea is that. Well, Boortz went on to explain, and that light bulb over my head turned on (albeit, dimly). Simply put, do not buy anything by using dollar bills. Use change, use fives, tens, twenties, etc. Just do not spend a dollar bill...anywhere. If you buy a cup of coffee, use a $5 bill to pay for it, and put those $1 bills you get back as change into a savings account or investment account. If you use a $10, keep the $5 for another purchase, and save the $1's.

I thought about this, and actually realized there is a two-fold benefit to it. First, the actual $1 bills you physically are not spending but saving or investing. The second benefit is you'll stop making unnecessary purchases of "splurge", items if you say disciplined enough to save the $1's. Imagine buying a $1 cup of coffee, and basically putting $4 of your cash out of play for ever, since it will be invested where you can't spend it.

So, to recap, you will end up saving more, by not spending the $1's, plus you'll save more by actually reducing the amount of spending you do on "splurge" items.

That Boortz guy is pretty smart.

No comments: