Bank It!

Posted on | July 31, 2009 | No Comments

My most effective savings strategy is the monthly automatic withdrawals of a consistent percentage of my paychecks into my savings account. As the year goes on, I know that my account will continue to accumulate, barring any unforeseen natural disaster, lay-off or the like. Another great savings strategy that complements this principle is stockpiling products that I buy on sale and with coupons, allowing me to remain within my budget each month. Not only does that decrease the overall cost to me for products throughout the year, but the next time I need something like deodorant, olive oil or pajamas, I can just visit my supply closet and not run to the store.

All around my apartment is evidence of the stockpiling principle; I seem to be knee high in products. What has me questioning my strategies is the fact that I only seem to be ankle high in money. Why is it that I am buying everything at a discount, yet still stockpiling the same boring amount of money each month?

Then it occurred to me while window shopping the other day. “Savings” in the retail sense does not equal savings in the sense of stockpiling money and setting it aside in my bank account. As I passed an electronics store, a silver gleam on a new digital camera caught my eye. Then I saw red. Its price was slashed from its original, with the camera regularly costing $250 and now on sale for $100. That’s a “savings” of $150, I thought to myself. So I did the math, and figured out that yes, I can afford the $100 sale price, but that I didn’t have that extra $150 lying around to pay the regular price. The “savings” was merely a number on a sign for me; without it, I couldn’t afford the camera at all. With it, I still would never be able to bank that $150 because it simply does not exist. This deal, like so many others before, holds no tangible savings for me.

Then I started thinking about all of the “savings” posted on the bottom of my grocery, drugstore, and online shopping receipts, and how each month, without fail, I have still put away the same amount of money into my savings account. Wow. I feel quite gypped.

It’s great that I am able to stretch my dollar beyond recognition of George Washington’s face in order to buy a plethora of extremely discounted products. But if this never equals an increase in my savings account above what I contribute anyway, then what is the point? Maybe the reality is that without these extreme discounts I am always hunting for, I simply couldn’t afford my lifestyle? Doesn’t that make me just like all of the other people who live beyond their means?

Time to experiment.

I’ve made a list of all of the things I want to purchase in the month of June, or that I need to purchase, and then budgeted a certain amount of money for each item. In the next column I am going to subtract the product’s actual purchase amount from the amount budgeted, and this will be my “actual savings” column. Then, at the end of this month I will add up the actual savings column and bank the surplus money from all of the great discounts I find. This, ofcourse, will be above and beyond the normal amount I contribute anyway.

I know this will take some considerable adjusting on my part, as I can no longer stretch my budget into its no-fly zone in order to squeeze out an extra move ticket or steak. On the other hand, the thought of squeezing out extra money is very exciting, so I am sure the small sacrifices will be worth their weight in gold.

Join me, and watch your savings stockpile!

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