Save by Spending Less

One way to save is by spending less. If you are not an expert bargain-hunter already, here are some reasons you may want to hone your saving skills:

Save money, and you can work less. One way to get a new perspective on your spending is to know how much you would have to work to buy an item. Let's say your take-home pay is $15 an hour. If you want to buy a new television worth $450, you have to work about 30 hours to pay for it. If you spend less, you will have to work fewer hours to buy an item. Or you can sock more of your money away for retirement, when you may not want to work!

Saving money is a great investment. Usually when you earn money, whether by working or generating investment income, you have to pay Uncle Sam taxes on that income at some point. But when you save money by spending less, your savings are tax free. For example, you buy $50 worth of groceries on sale for $35. You have saved $15. But since there's no tax burden on those savings, they are worth about $20 in pre-tax earnings! (Don't worry about the math, just keep in mind that thanks to taxes, a penny saved is worth far more than a penny earned.)

Saving money takes less time than you think. On average, about half of us do not shop around because we don't think it is worth the time or effort, according to a study by the Consumer Literacy Consortium. But in fact, significant savings can take very little time. Here are some examples of the savings student shoppers turned up and how long it took them:

Little changes can make a big difference: Think a few dollars here or there do not matter? Guess what?

• Give up one $35 meal at a restaurant just once a month and you can have $420 at the end of the year.
• Make your own coffee twice a week instead of shelling out $3.50 and you will save $364 this year.
• Bring your lunch four days a week instead of spending $5 on fast food and you can sock away $1,040 by year's end!

You will live like a millionaire! Drs. Thomas Stanley and William Danko have been studying the wealthy for decades. In their classic, "The Millionaire Next Door," they say that one of the typical characteristics of millionaires is that they are "frugal," or careful with their money.

Calculators

• What will it take to become a millionaire?
• What's it worth to reduce my spending?

Tip: You are eligible for exclusive savings on a wide variety of products and services because of your union membership. Use this calculator to see how much you can save!

Simple saving tips

	When you get a raise, bonus or other windfall, save at least part of it. Your raise will be worth much more over time if it is saved and/or invested!
	Get a big tax refund? Adjust your withholding so that money comes in your paycheck, then save and/or invest it.
	Spend only bills, and each day empty the coins in your wallet or pocket in a jar. Deposit them at the end of the month.
	Clean out the clutter, then hold a garage sale or get online to sell items you no longer use. Save the money you get.
	Cut 10% off your typical spending for items like groceries, utilities, etc. Save the difference.