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It may seem hard to believe, but purchasing that 40-inch plasma tv for next year’s Super Bowl–or opening an IRA account–can be as easy as squirreling away your spare change, giving up those two large lattes at your local coffeehouse, and turning off the lights before you leave the room. Before you shake your head in disbelief, read on. We interviewed several financial experts–and two regular folks–about ways to save for short-term goals by implementing everyday savings strategies. Before you know it, you’ll be able to achieve those one-year, two-year, and even three-year goals.
STRATEGY# 1: Sheraun Britton-Parris is a pro when it comes to cutting back. Britton-Parris, 32, left a fast-track career in marketing to create The Possibili-Tees Inc., an online boutique that sells women’s T-shirts with motivational affirmations. To finance her business, she literally began saving her pennies. “I began putting my pennies in an apple juice jar,” says the New York resident. “By the end of the year, I had $100 to $135 in change, which I reinvested into my business.”
Robert Bennett, 46, the owner of WBPM NetRadio, an Internet broadcast radio stream in Tampa, Florida, saves about $200 per year in change. He and his wife, Sharon, 44, use the extra funds as spending money on their yearly vacation.
Gail Perry-Mason, a first vice president at Oppenheimer & Co. and the co-author of Girl, Make Your Money Grow! A Sister’s Guide to Protecting Your Future and Enriching Your Life (Harlem Moon; $11.95), approves of penny-saving. “If your whole family saves, it adds up. We’re talking $75 to $100 a month,” she says. Just think, at the end of the year you’ll have $1,200 saved. And if you’re really ambitious, you may want to follow the lead of one of Perry-Mason’s clients, who was saving for an IRA and decided to put aside money every day for an entire year. Her strategy? “She saved $1 a day in January, $2 a day in February, and so on,” says Perry-Mason. By the end of the year, she was able to fund an IRA, and she increased her financial confidence by sticking to her goal.
STRATEGY# 2: David Bach, author of Start Late, Finish Rich: A No-Fail Plan for Achieving Financial Freedom at Any Age (Broadway Books; $25), suggests that consumers find their “Latte Factor.” According to Bach’s Website, www.finishrich.com, by forgoing the average cost of a latte and muffin, at $5 per day, and investing $150 per month at 10% interest, you can save almost $4,000 in two years. “Instead of buying breakfast at work, I would buy a box of cereal at Costco [wholesale club] and take it to work,” says Britton-Parris. “I saved $2 to $4 per day, which put almost $1,000 toward my business.”
Alfreda Norman, community affairs officer at the Federal Reserve Bank of Dallas, which publishes the online booklet Building Wealth: A Beginner’s Guide to Securing Your Financial Future (www.dallasfed.com), agrees. “For many people, those daily expenses represent a big, black hole.”
STRATEGY# 3: Cutting back on