September 25th, 2009 | 
Author: In today’s financial climate it can get very hard to find a little extra money to put away for that rainy day. I did not say that it was impossible just kinda hard to be able to build up the emergency fund when it seems that every day is an emergency. Here are three of the best ways to save money even when money is tight.
Save Your Change
Set up a change jar. I have mine set up at the kitchen counter by our back door where I always empty my pockets. I throw my keys on the counter next to my wallet and I plug in my cell phone and throw all my change (every day) into my jar. Twice a month I empty my jar and take it to the bank sometimes there is only two or three dollars in it and sometimes five or six. It is amazing how fast it adds up. At approximately $8.00 each month it comes to $96 a year. Not a fortune but better than a sharp stick in the eye.
Save Coupons and Use Them
Start to clip coupons or better and easier, just print them off your computer for the brands you use. It is amazing how much you can save on your monthly grocery bills if you just do a little work at it. Of course if you are going to save then the money you do not spend you must put into your savings account. What we have done is set our bi-weekly food budget for the amount we spend to eat each payday. Then we clip coupons and look for deals while shopping so we do not spend our entire budgeted food allowance. Depending on the coupons we find for the two week period we can save $10 to $20 each time which adds up to an average of $30 per month totaling $360 per year. Again not a fortune but $360 plus the $96 comes to $456 each year.
Pay Yourself First
This is a must if you are ever going to build up your emergency fund. Just put yourself in the budget and pay yourself every payday the same as you would pay your electric or phone bills or any other creditor. Make sure that you drop it into your savings account right away or you will spend it on something you really do not need. If you pay yourself only 10% of every payday it will add up fast. Say you bring home $400 per week 10% is $40 times 52 weeks totals $2080 per year. At only 5% it would total $1040 per year.
As you can see just these three of the best ways to save money can put a sizable sum into your emergency fund in as little as a year. Add seven more ways to save and look out world here we come.
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One way my fiance and I save money is by saving all of our change and $1 bills. At the end of the day we both put our pocket change and $1 bills into a mason jar, and about once a month or so we put it into our savings account. And that's going to be our spending money for our honeymoon.
…@#$%@#
Hello. There are a number of solutions, every single one of them with some type of drawback.
The basic problem is that back in the 1930s someone decided to prevent the rest of us from competing with the banks (including and especially the investment banks) as a source of capital by preventing us from accumulating capital over multiple generations. There are several laws to prevent this:
* "Kiddie tax" on minors, NOW UP TO AGE 18!!
* Gift tax
* Estate tax (charged to the estate, not to be confused with inheritance tax which some states charge to the heir IN ADDITION TO the charges to the estate!)
* Generation Skipping Transfer Tax (GSTT)
Due to the amounts of money you are talking about, you will fall under the radar for most of these except for the kiddie tax, but you should know about the other taxes too.
Anything I suggest will be hit by one or more of these as soon as certain threasholds are hit. Talk to an appropriate investment advisor to make sure you understand the tax consequences of any particular strategy.
Probably the most simple to understand is the UTMA/UGMA. This is a custodial account. It is technically an irrevokable account, HOWEVER, you must NOT die before your child turns 18 or it will be taxed to your estate. Plan accordingly. One possibility is to use a trusted grandparent (aunt, uncle…) as the custodian; this will keep it out of your estate (as well as the grandparent's since the grandparent is not the grantor). It is unfortunately subject to the kiddie tax. You can contribute to the account in amounts that will fall under the annual exclusion (currently around $12K per year I think) to avoid gift tax.
There are 3503(b) and 2503(c) trusts. I won't go into them too much because any income from the trusts distributed to the child are hit by the kiddie tax, and any income not distributed by the c trust is hit by trust tax rates, which are high.
A Crummy trust is one in which the child has the right to receive distributions (that right is normally allowed to lapse, under threat of not putting any more money into it). This right creates "constructive receipt" which means that it's not taxed to you nor does it end up in your estate.
Interest on US EE savings bonds are not taxable if used for education, but I will not recommend them because the interest they pay is negligible compared to inflation. They can be called "certificates of guaranteed confiscation" like Federal bonds used to be.
UTMAs/UGMAs are getting rare because of the kiddie tax thing, but it is probably the best solution to your problem. Trusts are expensive to set up. Here is how to minimize the tax consequences:
* Try to arrange for a grandparent or aunt or uncle to be the custodian. This needs to be someone who is financially sophisticated as well as honest, as this person will have control over the account. If this is impossible, don't die before the kid turns 18.
* Think VERY carefully about investments, and pick something that will appreciate over a long period of time, so as to minimize taxable transactions. Favor long-term capital appreciation over current income, except in the case of "qualified dividends" which are currently taxed at a modest 15%. Beware of "growth funds" as they are usually full of risky stuff that does not necessarily "grow" (sometimes it shrinks). You might consider a balance between dividend-paying blue chip stocks, investment-grade bonds (**these will generate income-taxable interest, beware**), and something that is a hedge against inflation such as GLD (Streetracks gold-tracking fund) at around 10% of the portfolio. Rebalance the portfolio at regular intervals that are at least 1 year and 1 day apart; the time lag is to avoid short-term capital gains. Keep track of all of your purchase prices (including any dividend reinvestments) for income tax purposes.
Information provided was current at the time it was offered. Laws change and are more complex than I can describe them here. Consult with qualified tax and legal counsel.
This answer is for informational purposes only and does not constitute advice to buy or sell securities. Do your own due dilligence.
A perfect way for more then a $300 save is lowering your insurance rate. You can find your insurance rate by location over here:
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I love these vids! It’s so easy, I feel stupid.
bank account.
direct deposit.