Money for the Rest of Us

When it comes to saving money, I find that it’s the little things that make all the difference. The first rule of advice for savings has always been “pay yourself first.” I do this. Chunks of money get taken out of my bank account the day after payday for retirement, other investments, and shorter term (cash) savings. But when should I increase the amount of each of these recurring deposits?
I always increase it after a raise or a cost-of-living adjustment. But that’s only happened twice since I’m so young. So how else can I find money to increase these recurring deposits?

This week I just found another good time to increase the amount: when fixed costs of living go down; namely insurance.

My car insurance premium went down for this 6-month cycle by just about 10%. This is only $10 a month, and so I almost didn’t notice it when the automatic payment took it from my account. But $10 a month is $10. I immediately went into the automatic deduction setup for my online savings account and increased the monthly deduction by $10.

Take a look at your fixed monthly expenses and see if they have decreased at all lately. If they have then increase your automatic savings deductions. $10 at a 9% interest rate over 40 years (with taxes taken out) will add $34,218 to your nest-egg. Not bad for savings from an insurance rate change.