Dear Ken: You keep talking about saving for emergencies. But my wife and I are having a hard time making ends meet. We know we should save, but it is almost impossible. Do you have any special tricks that might work?
A: Saving in tough times, or for that matter, saving anytime is tough. There are two basic rules of saving — spend less than you earn and have a reason to save.
Part of the problem is the perception that we have to make a huge sacrifice to save. When times are tough, the temptation is to cut back on saving and focus on surviving. However, when people start thinking about ways to save and start cutting back a little in several areas, they find they can save more.
Here are a couple of thoughts for you to ponder.
First, get the entire family involved in the process.Let everyone know things are going to be tight, and you all are going to have to work together to make things work.
Set some weekly savings goal. It might only be $20 a week. Look for ways to trim your everyday expenses. Ask yourself what your family can do differently to save $20. Talk it out.Maybe you give up one meal out, skip a drink out of the vending machine, carpool to work, pack a lunch, save change in a jar, shop a little smarter at the grocery store. There are ways you might not have even thought of.
Another exercise that might help is to write down everything you spend and what you spend it on. Review the diary or list after two weeks.
Analyze your spending habits and you will find corners to cut or even some things you could eliminate.
If you have your paycheck direct-deposited, check with your financial institution and do a payroll deduction of $10 or $20. That way you probably won’t even miss the money.