Moms The Word

April 20, 2007

*Frugal Fridays* Savings

Filed under: Frugal Fridays, Good Ideas — mrslady @ 3:35 pm

One thing we have always had a big problem with is saving our money.  I think a lot of people (especially people like us who are already living on extremely tight  modest budgets) get a little intimidated when they think about saving.  It’s hard to imagine being able to save anything when you have to buy the day old bread just because it’s 30 cents cheaper.

That’s why pre-tax spending is so great.  A lot of jobs out there give you the option to put some money away into an account (like an IRA) before it even gets into your paycheck.  When you do that not only are you saving money for that rainy day you KNOW is coming some day, but you’re also putting the taxable amount of income on a lower level, which saves you some money wasted on taxes too.

Even saving a little can help.  We save $50 per paycheck in my husband’s IRA.  It doesn’t hurt us terribly (we can still eat and all), but it really adds up.  My husband gets two paychecks a month, when you put that in for 18 years (maybe you’re donating to a college fund?) then you have just saved $21,600!

Then consider this: even while working at the lowest of low jobs, I got a raise once a year of 50 cents.  An extra 50 cents an hour, working full time 40 hours, gives you an extra $80 per month, so if you save half of your raise wages then you’re saving a total of $140 dollars a month!

If you keep doing that-getting one 50 cent raise every year and putting another $40 a month into savings each time you do-then in a full 18 years you will have saved-get ready-$95,040!  (First year at $100, Year 18 at $780 per month after adding $40 to your monthly savings each time you get a 50 cent raise (I’m saying that happens once a year, but I know people who get those every 6 months!). That’s a lot of money to ME, and more than enough to put your kid into a decent college for a couple of years (right now at least).  Now imagine what you can do between when your child is in college and when you retire! (At least I can-that’s one of the lesser known ADVANTAGES of having your children when you are young.  I know that once my son goes to college I’ll have almost 30 years before I retire.  In case you’re wondering-30 years, upping your savings by 25 cents an hour every year (when you get a 50 cent raise an hour every year) you’re looking at a total savings of $244,800, not including any other investments you might make or if you decide to “double up” [save twice as much] once you hit 50 as is usually recommended.)

So the moral of this Frugal Friday is even the smallest drop in the bucket can someday make a title wave-and when we’re talking about money I wouldn’t mind swimming in it!

*For more Frugal Friday tips go to Biblical Womanhood*


1 Comment »

  1. It’s great to have a reminder of our long-term goals. Sometimes that can get lost in the daily drone of penny pinching!

    Love your blog layout–

    Comment by Meredith — April 22, 2007 @ 7:36 pm

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