I began looking for ways to build up a savings account which wouldn't mean sacrificing all the joys of living for today. And with that thought, I came up with a plan on how to save $30,000 over the next ten years by simply using coupons.
Let me begin with a major disclaimer about my plan. I am not a financial wiz - not even close. The calculations I came up with do not include creative financial planning. This is a simple approach which allows me simple goal setting.
Also, this type of savings plan only works if you use coupons to save on items you would normally purchase, not if you use coupons to buy items that you would not usually buy without the coupon. In other words, if your coupons are truly saving you money, you can put that money in the bank!
With that said, here is how I am going to save $30,000 in ten years.
The PlanI would rate my efforts invested in clipping coupons for grocery items at about a level six - meaning I clip them and use them but not as aggressively as many out there. Between shopping sale items, using coupons on sale items and taking advantage of every discount I can spot, my average savings is running around $240 a month.
I keep $10 a week for myself ($40 a month) and put the rest into a savings account. As the amount builds up, I look for other conservative places to invest it, which results in an average annual gain of about 9 percent. If I save more in a given week, I still just put $10 in my pocket and nest egg the rest away. This helps for the weeks I save less.
How Does This Turn Into $30,000?By saving $200 a month, at a federal taxable rate of 25 percent and state rate of 6 percent, with an average annual gain of 9 percent, I will save approximately $35,000 (give or take a few hundred).
The Trick to Long-Term Savings With CouponsLike everything good in life, building a savings takes a certain amount of planning and discipline. The reward comes when you see the account building and can see this type of savings plan really can work.
- Set a Reasonable Goal
- If you save $20 a week by clipping coupons - set your savings goal at $7,000 in ten years.
- If you save $100 a week by clipping coupons - set your savings goal higher at around $60,000 in ten years.
- Immediately Pay Yourself
The only way this system works is if you pay yourself for the money you have saved. Immediately head to the bank after you leave the grocery store and transfer the amount you saved from your checking account into your savings account. This is essential if you plan to stay on track with this type of savings method.
- Keep Your Hands to Yourself
It can be very tempting to dig into any account that has money in it when special things arise, but I try very hard to keep my hands to myself and out of my savings accounts. Unless it is an unavoidable, such as an emergency, I do not take money out of my coupon account.
- Short-Term Goals
Using this same method for saving for holiday gift-giving, a future wedding, vacations, the down payment on a house or anything which it is hard to set aside money for can also be rewarding.
Tool for SavingThis is a simple calculator which can help you figure out your own goals for savings with coupons.
MSN Money Saving Calculator