Friday, June 13, 2008

School Stories 6 - Investments - Personal Finance 2 of 5

Since the movie had mostly been about how to save when you already have money and are saving (I guess it was about how to save smarter), our professor, Alayna, brought a list of “Ways to save so that you have money to invest”. We discussed the list in class, and she shared her experiences. This list is also from Ric Edelman.

- Never spend your coins. (Alayna says that if you’re someone who uses cash, this can be a good way to start saving. She said her grandfather used to always save his coins, and they would do trips to Lagoon and stuff like that with coins that he had saved.)

- Bring your lunch to work. (She said that he says it will save $25/week. After 5 years, that’s $7,010. After 20 years, $35,600. She doesn’t know how he got those numbers; he probably includes interest, etc, but she said they seem about right.)

- Buy in bulk. (From Costco, etc.) Alayna added, buy stuff at the grocery store when it’s on sale. “I brought proof,” she said, and she showed us a 5 foot long receipt. She has three boys and her husband, and everyone plays sports, and they’re always drinking Powerade. Powerade went on sale, and she bought seventeen cases of Powerade, or 255 bottles. She says it will probably last 6-9 months. She paid $131 for all of that Powerade, and she said that usually it’s at least $1 per bottle, or sometimes even $2 per bottle. So that much Powerade would have cost $255-$500, and she had just saved at least $150 on something they would have bought anyway. She finished that discuss: “Now don’t go buy cat food because it’s on sale and you have a coupon but you don’t have a cat...” So, buy things that you use in bulk.

- Get rid of home phone line services. Now, most people have cellphones, but a lot of people are still paying for extra services on a phone line that they don’t really use. If you drop call waiting and caller ID and all of the fancy services that you’re not using anyway, a lot of people can save a bunch of money here.

- Go over your utility bills. (Alayna said that one of her students did this and discovered that she was paying $10 a month towards some charity, without realizing it. Not that charities aren’t good and important, but sometimes you’re paying for more than you realize.)

- Buy fewer premium TV channels.

- Eat dinner at Happy Hour. (A lot of places offer a lunch menu until 5pm, she said. So go at 4:57, and save a bunch. At this point, Alayna told a fantastic story. She said that last semester she had a guy in her class who was like, “look, coupons are a nice idea, but I’m young and single, and I’m still taking girls out. Is this really practical?” And she was like, “Absolutely! You just have to spin it right. Tell the cute girl, “I’m saving $8 on your meal and it’s going into my retirement account, and did I mention I’m going to be a millionaire by the time I’m 41?” So that was an awesome story.)

- Use supermarket coupons. “Some ladies play Bunko, some ladies scrapbook; I clip coupons. And when I save a buck, I feel like I’ve scaled Everest,” she said. She said that when she goes to the grocery store, she warns the people in line behind her that it’s going to be a while, and they usually choose other lines. One lady was like, oh, well, do you mind if I watch and see how much you actually save with coupons? And she was like sure, and on the receipt that she brought in for this story, she had paid $121 and saved $258.09. She said the lady applauded at the end. Also about coupons, she said that she likes coupons so much that she sometimes buys them on eBay. She paid $1.50 for 20 GM coupons, and saved $20. Ric Edleman (whose suggestions these are, remember?) said that clipping coupons can save you $49,000 over 20 years.

- Borrow movies from the library. Alayna said that you can even get on a waiting list so that you can get the brand new ones right when they come out. And then you get them for a week, for free, instead of paying for Blockbuster or whatever.

- Vacation at home. Not skip a vacation, just skip the airfare and hotel costs. Alayna said her? ( I think) family did this one year when she was growing up, and they spent a day at Lagoon, and went off to see where the Golden Spike had gone in (it’s in Utah), and did vacationy stuff all day every day for a week, and that they had a lot of fun, and that’s a way to save some money.

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