Saving by Plastic and E-Mail
Make your credit and debit cards and bills help you save.
Debit Round Up
You saw in the last post how to round up on weekday dollars and weekend fives. When your bank statement comes in, round it up.
Any purchase you made with your debit card needs to be rounded up to the next dollar. After you calculate your savings, write yourself a check for the amount. Put the check where you have your saved bills. When it is time to deposit, you will have the check to help you reach that minimum deposit.
Credit Card Keeping
Your mobile alert says you have spent $216.82 since your last statement. Pay the penalty. Round credit cards to the nearest $50. If you cannot swing a $35 savings this month, round to the nearest $25.
This time, instead of hoarding your savings, apply it to your credit card balance. By dropping the amount you owe on your credit card, you are saving interest and giving yourself some credit in the case of an emergency.
Cash Back Bonus
If your credit or debit cards offer cash back, use the bonus to pay down your credit card. Add your bonus to your monthly bill payment. Reducing debt will broaden your safety net by freeing up credit you can use in an emergency.
Once your credit card is paid off, you can save the cash back in your savings. We will discuss this in greater detail when we talk about maintaining your emergency fund.
For all of your accounts you pay online (mortgage, insurance, car note, electricity, gas, gasoline, cell phone, house phone), pay yourself a tax. All of your bills come with an access tax or handling fee. Tax yourself to access them as well.
How much? You save the postage by paying online. You saved gasoline by not driving to the establishment to pay. Add those together. The average trip to pay a bill burns a gallon of gas. Add the price of a stamp and a gallon of gasoline. Write yourself a check for that amount times the number of bills you pay online.
OK, so maybe bills are not truly junk mail. If you still get paper bills for things like water service and subscriptions, pay extra. Save at least 1% from each bill. This is elementary math…move the decimal point two places to the left (<<).
In as little as a year, you can save more than $700. Already that emergency fund is growing to the point we need to find a bigger place to put it…and one which will pay you interest!
Next, we look at banking your emergency funds.
See all posts in the Emergency Funds Series.
(c) Ann Marie Dwyer 2011
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