What immediate isolated actions or habits could I take on to add $1000 more to my bank account each year? And which can I take on in the next 3-5 years that will pay off even more?
July 21, 2011 5:30 AM Subscribe
What immediate isolated actions or habits could I take on to add $1000 more to my bank account each year? And which can I take on in the next 3-5 years that will pay off even more?
Looking for examples that are less conventional than what I've come up with so far. Things like "use coupons" or "put enough air in my tires" don't have the return I'm looking for.
My Too-Conventional Examples:
+Drive a car that gets 10 more mpg (worth about $2000/year)
+Become an Amazon.com Mechanical Turk Worker (worth maybe $1000/year)
+Obviously a strategically chosen higher degree could pay quite a bit long-term.
My Motivation (which you can probably skip)
I'm realizing that I'm only adding about $1000-2000 to my savings each year which is not a rate that allows me to prepare for any significant life change (marriage, kids, car accident, buying a house).
Looking for examples that are less conventional than what I've come up with so far. Things like "use coupons" or "put enough air in my tires" don't have the return I'm looking for.
My Too-Conventional Examples:
+Drive a car that gets 10 more mpg (worth about $2000/year)
+Become an Amazon.com Mechanical Turk Worker (worth maybe $1000/year)
+Obviously a strategically chosen higher degree could pay quite a bit long-term.
My Motivation (which you can probably skip)
I'm realizing that I'm only adding about $1000-2000 to my savings each year which is not a rate that allows me to prepare for any significant life change (marriage, kids, car accident, buying a house).
Get one of those savings accounts that automatically transfers money to savings with each time you use the card. My bank automatically transfers a dollar to savings every time we use our debit card. I was shocked at how quickly that adds up to real money.
posted by COD at 5:41 AM on July 21, 2011 [1 favorite]
posted by COD at 5:41 AM on July 21, 2011 [1 favorite]
pack a lunch.
posted by cosmicbandito at 5:41 AM on July 21, 2011 [5 favorites]
posted by cosmicbandito at 5:41 AM on July 21, 2011 [5 favorites]
Saving $5/day yields $1825/year. By far the easiest way for me to do this has been reducing what I spend on food/drink. Options include packing lunch, brewing coffee at home, cooking in large batches and saving leftovers, eating more beans/eggs protein sources, drinking only water at restaurants/bars.... The savings can easily top $5/day (and you'll probably be healthier, too).
posted by mauvest at 5:50 AM on July 21, 2011
posted by mauvest at 5:50 AM on July 21, 2011
What about trying to earn the money? You might be able to make $1k/year using a website with some ads on it. In order to make $1k/year on a website with $5 CPM you would only need to have about 550 visitors a day, which is not very difficult at all.
posted by delmoi at 6:11 AM on July 21, 2011 [1 favorite]
posted by delmoi at 6:11 AM on July 21, 2011 [1 favorite]
Options include packing lunch, brewing coffee at home, cooking in large batches and saving leftovers, eating more beans/eggs protein sources, drinking only water at restaurants/bars....
This is good advice but it won't work unless you actually calculate and set aside your savings regularly. If you estimate that you are saving $20/week packing a lunch and $5 carrying a water bottle, then transfer $25 to savings each week. If you used to go out to dinner 2x/week and now 1x/fortnight, then transfer three restaurant meals' worth of money into savings. Online banking makes this super-easy and it feels really good when you do it.
Make sure your savings account isn't linked to your atm card.
posted by headnsouth at 6:12 AM on July 21, 2011 [1 favorite]
This is good advice but it won't work unless you actually calculate and set aside your savings regularly. If you estimate that you are saving $20/week packing a lunch and $5 carrying a water bottle, then transfer $25 to savings each week. If you used to go out to dinner 2x/week and now 1x/fortnight, then transfer three restaurant meals' worth of money into savings. Online banking makes this super-easy and it feels really good when you do it.
Make sure your savings account isn't linked to your atm card.
posted by headnsouth at 6:12 AM on July 21, 2011 [1 favorite]
This is good advice but it won't work unless you actually calculate and set aside your savings regularly.
I agree. I think you have to do this part first- arrange to have $85 a month moved from your checking to savings. Then, figure out how to cut corners.
posted by ThePinkSuperhero at 6:22 AM on July 21, 2011
I agree. I think you have to do this part first- arrange to have $85 a month moved from your checking to savings. Then, figure out how to cut corners.
posted by ThePinkSuperhero at 6:22 AM on July 21, 2011
Go through your last bank statement and spot all the monthly recurring payments. Cancel everything that's not essential (cable, magazines, gym, anything you don't use).
Research cheaper utility providers and switch.
Purchase a cheap second hand bicycle and use it.
Take on a second job, or freelance in your spare time.
Move somewhere cheaper (whether in rent or in heating/cooling bills).
Move closer to somewhere that you use a lot of fuel driving to.
Take advantage of specialist knowledge to buy badly listed items on eBay, improve them in some minor way and relist them more professionally or at a more appropriate time of year.
posted by emilyw at 6:30 AM on July 21, 2011
Research cheaper utility providers and switch.
Purchase a cheap second hand bicycle and use it.
Take on a second job, or freelance in your spare time.
Move somewhere cheaper (whether in rent or in heating/cooling bills).
Move closer to somewhere that you use a lot of fuel driving to.
Take advantage of specialist knowledge to buy badly listed items on eBay, improve them in some minor way and relist them more professionally or at a more appropriate time of year.
posted by emilyw at 6:30 AM on July 21, 2011
Best answer: If you live in a place that has a lot of folks travelling through, you could rent out a room/couch/space via AirBnB. I know a few people who do this in the New England area and have more travelers than they can regularly handle. You have to do a little work in terms of laundry and keeping the place up, but even a couch in a living room can bring in $30-40/night.
posted by jessamyn at 6:41 AM on July 21, 2011 [3 favorites]
posted by jessamyn at 6:41 AM on July 21, 2011 [3 favorites]
Ask for a raise. When you get it, deduct the raise from your paycheck and have it automatically deposited into your savings account.
posted by xingcat at 6:43 AM on July 21, 2011
posted by xingcat at 6:43 AM on July 21, 2011
This is somewhat unanswerable without knowing what your habits are, how you use your money, or what your income is like. If you drive to work, riding a bike might give you a few extra grand. Moving into a cheaper apartment can add hundreds to your savings every year. As others said, eating out less or skipping your morning latte could add up to a few grand. If you have your savings parked in a low-interest savings account, move the money to a higher interest account or into the markets (though obviously you could lose money if you go into the markets). If you're carrying debt on a car or on student loans, consider the fact that paying those off sooner yields a return on your investment equal to your interest rate; that could save you thousands over the long run.
posted by craven_morhead at 6:47 AM on July 21, 2011
posted by craven_morhead at 6:47 AM on July 21, 2011
Give up alcohol, coffee, and tobacco. Quit eating meat. Buy your clothes at second-hand stores.
posted by Bruce H. at 6:49 AM on July 21, 2011
posted by Bruce H. at 6:49 AM on July 21, 2011
Cancel cable. In our house that would save $1000/year. Phone bills are another big one - can you cancel your home phone? The data plan on your cell phone? You apparently don't own a home, but what about your other insurances - car, renters - have you talked to your agent lately about that?
posted by dpx.mfx at 6:56 AM on July 21, 2011
posted by dpx.mfx at 6:56 AM on July 21, 2011
Best answer: I do a combination of automatic $50 transfers to my savings every month, plus BoA's Keep the Change program, which rounds up debit card swipe purchases to the dollar, debits that even amount from my checking and transfers the "change" leftover to my savings. Any kind of windfall money goes into savings, too, and for me that includes income from my job on the side as a professional musician. But even without the side job, which you might not be able to swing yourself, just doing the little transfers to savings has allowed me to save at least as much as you're looking to save.
posted by emelenjr at 6:57 AM on July 21, 2011 [1 favorite]
posted by emelenjr at 6:57 AM on July 21, 2011 [1 favorite]
Stop buying all that fancy imported french cheese! oh wait no thats me... perhaps you don't do that. Hmmm
These days I'd imagine the most expensive monthly outgoing you have is rent. It is for me, its almost equal to all my other costs combined. Do you live alone? If so you could instead move into a sharehouse which could possibly cut your rent in half.
posted by mary8nne at 7:33 AM on July 21, 2011
These days I'd imagine the most expensive monthly outgoing you have is rent. It is for me, its almost equal to all my other costs combined. Do you live alone? If so you could instead move into a sharehouse which could possibly cut your rent in half.
posted by mary8nne at 7:33 AM on July 21, 2011
Best answer: Does your job offer 401(k) matching? If they match 100% of a 3% contribution from a $40,000 salary, that's $1200 a year in free money.
posted by bcwinters at 7:45 AM on July 21, 2011
posted by bcwinters at 7:45 AM on July 21, 2011
I recently discovered that if I am more conservative with my driving (a round trip commute of about 40 miles) I can get away will filing up the car once every two or more weeks instead of once every week and a half. Each fill up costs me nearly fifty bucks so I'm saving nearly a grand a year. I've handled this decrease in spending by upping the amount of money that comes out of each paycheck for savings. This is done through an automatic transfer to an internet-only bank (American Express Bank, 1.00% interest on savings) so I never even see the money.
I've also slowly worked up the amount that comes out of each paycheck for savings and retirement. This has forced me to be more careful with my spending.
posted by Loto at 8:03 AM on July 21, 2011
I've also slowly worked up the amount that comes out of each paycheck for savings and retirement. This has forced me to be more careful with my spending.
posted by Loto at 8:03 AM on July 21, 2011
Seconding (or sixthing) the idea of an automatic transfer from checking to savings the day of or day after payday, assuming you have direct deposit. A lot of spending is so discretionary it's practically based on whim, so having that $80 available and burning a hole in your pocket -- or you checking account -- may well mean you'll spend it on some impulse. Checking your balance and finding it hovering just above "overdraft" puts the idea of "a couple of friends for drinks and then a cab home" or "the director's cut of the whole saga in Blu-Ray" on the back burner.
If you do have an online presence, look into Google Adsense and Amazon Affiliates ads: my experience is that regular readers tend over time to become regular customers of "our sponsors." I've found in particular that the most faithful readers of my blog make a point of going to Amazon to buy stuff they want so I'll get the commission.
About 10 years ago when I was unemployed I kept myself in walking-around money, to the tune of at least a grand a year, by selling my opera CDs -- the one I bought, but had listed to only once or so -- on Ebay. True, this was when people still bought music on physical media, but you likely have some kind of collectible or other kind of non-essential and eventually replacable stuff you can part with for now. Later, when you're flush, you can buy another whatsis.
posted by La Cieca at 9:21 AM on July 21, 2011
If you do have an online presence, look into Google Adsense and Amazon Affiliates ads: my experience is that regular readers tend over time to become regular customers of "our sponsors." I've found in particular that the most faithful readers of my blog make a point of going to Amazon to buy stuff they want so I'll get the commission.
About 10 years ago when I was unemployed I kept myself in walking-around money, to the tune of at least a grand a year, by selling my opera CDs -- the one I bought, but had listed to only once or so -- on Ebay. True, this was when people still bought music on physical media, but you likely have some kind of collectible or other kind of non-essential and eventually replacable stuff you can part with for now. Later, when you're flush, you can buy another whatsis.
posted by La Cieca at 9:21 AM on July 21, 2011
Again, automatic transfer idea. You may have to do a careful analysis of your spending. Necessary spending (rent, gas(work commute), food(groceries, not takeouts), utilities(water, electricity, gas, not cable, nor insurance for your boat, etc). Come up with a minimum figure of fixed expense, and determine your disposable income, and how much of that disposable income you're spending on silly stuff (too much take out, too many $4 coffee, games, movies, etc). There needs to be a sacrifice if you want to put away more with the same amount of check you take home. If your check gets deposited on the first of the month, schedule the auto transfer to be on the fifth, and live off of the remainder. If you're saving 10%, try for 20% the next month or two then move to 30%. This will be difficult if you have a lot of fixed expenses, especially if you have kids, they get bigger, they have activity expenses, you gotta feed them, have lessons, trips, etc...but very doable. Need to make sacrifices.
It's easier to save money with the money you earned than trying to make it in my experience.
posted by icollectpurses at 9:39 AM on July 21, 2011
It's easier to save money with the money you earned than trying to make it in my experience.
posted by icollectpurses at 9:39 AM on July 21, 2011
Do you smoke? Quit.
posted by Scientist at 9:46 AM on July 21, 2011 [1 favorite]
posted by Scientist at 9:46 AM on July 21, 2011 [1 favorite]
jander03: "What immediate isolated actions or habits could I take on to add $1000 more to my bank account each year? And which can I take on in the next 3-5 years that will pay off even more?"
Load up your expenses into a program like GNUCash. You'll get a a clear picture of the "big ticket items" you can look at, and you can compare that with some government data sources to see if there's any major discrepancies (there probably isn't). But since you're going after 1000+ dollars, it helps to know where that kind of cash is hiding.
The universal big ticket item is rent / mortgages. I estimate I've saved 3k a year by finding a roommate and moving out of my one bedroom apartment. I'm also splitting utilities and such.
Another example might be buying a car with cheaper depreciation. I like to buy new cars and own them for life, but I assume there are cheaper ways to go, if you measure by cents per mile. You might even consider getting by with public transportation. I live too far away from major population centers to make that worth my while, but even here in the middle of Kansas plenty of people do it; either for political, fiscal, or legal reasons. At any rate, forget about miles per gallon; high MPG cars can easily cost more up front and defeat the purpose. Focus on cost per mile.
A personal example though might be of most interest. I'm a gamer. So much so that past budgets included line items for buying videogames, of about a thousand dollars. So here's a few money saving tips:
* Games drop in value, so don't hold on to them just in case someone wants to borrow it some day. Sell them and put the money to work earning you interest.
* Games drop in value the most just after release, like many retail things. Even being a few months behind the curve can save a hundred dollars a year.
* Check your library; my previous suburban library actually carried games. Put em on hold and it's like a property tax funded netflix.
* Online trade in programs have gotten much more competitive recently. Places like gamestaq and glyde make it very easy to buy and sell used games, and take steps to absorb the fraud risk you'd see from craigslist or ebay.
* Renting via gamefly is expensive, but they sometimes have good sales.
If you can go from buying 16 $60 games a year to none, that's a thousand saved.
posted by pwnguin at 10:56 AM on July 21, 2011
Load up your expenses into a program like GNUCash. You'll get a a clear picture of the "big ticket items" you can look at, and you can compare that with some government data sources to see if there's any major discrepancies (there probably isn't). But since you're going after 1000+ dollars, it helps to know where that kind of cash is hiding.
The universal big ticket item is rent / mortgages. I estimate I've saved 3k a year by finding a roommate and moving out of my one bedroom apartment. I'm also splitting utilities and such.
Another example might be buying a car with cheaper depreciation. I like to buy new cars and own them for life, but I assume there are cheaper ways to go, if you measure by cents per mile. You might even consider getting by with public transportation. I live too far away from major population centers to make that worth my while, but even here in the middle of Kansas plenty of people do it; either for political, fiscal, or legal reasons. At any rate, forget about miles per gallon; high MPG cars can easily cost more up front and defeat the purpose. Focus on cost per mile.
A personal example though might be of most interest. I'm a gamer. So much so that past budgets included line items for buying videogames, of about a thousand dollars. So here's a few money saving tips:
* Games drop in value, so don't hold on to them just in case someone wants to borrow it some day. Sell them and put the money to work earning you interest.
* Games drop in value the most just after release, like many retail things. Even being a few months behind the curve can save a hundred dollars a year.
* Check your library; my previous suburban library actually carried games. Put em on hold and it's like a property tax funded netflix.
* Online trade in programs have gotten much more competitive recently. Places like gamestaq and glyde make it very easy to buy and sell used games, and take steps to absorb the fraud risk you'd see from craigslist or ebay.
* Renting via gamefly is expensive, but they sometimes have good sales.
If you can go from buying 16 $60 games a year to none, that's a thousand saved.
posted by pwnguin at 10:56 AM on July 21, 2011
Response by poster: Thanks for the suggestions - a lot are things I already do.
The big ones for me are:
Take a second job / free-lance
auto-route money into a savings account
consider monetizing my web presence
This also confirms a suspicion I had when I posted which is, short of switching jobs/careers, there is no way to make a huge impact on my finances. Good to know.
posted by jander03 at 2:32 PM on July 21, 2011
The big ones for me are:
Take a second job / free-lance
auto-route money into a savings account
consider monetizing my web presence
This also confirms a suspicion I had when I posted which is, short of switching jobs/careers, there is no way to make a huge impact on my finances. Good to know.
posted by jander03 at 2:32 PM on July 21, 2011
Bike to work.
Bike everywhere.
Once you're happy with that, sell your car.
Easily worth $1-4k/year.
posted by schmod at 2:55 PM on July 21, 2011
Bike everywhere.
Once you're happy with that, sell your car.
Easily worth $1-4k/year.
posted by schmod at 2:55 PM on July 21, 2011
Depending on your particular skill set, you may be able to set up some sources of passive income.
Are you a developer? Can you build a small app for the iPhone or for Android phones and sell it in the appropriate app store?
Are you a photographer? You could submit some of your work to sites that sell stock photography and make money when they resell it.
Are you a writer? You could write a short (or long) story or book and self-publish it in Amazon's kindle store.
Few people get rich by doing these things, but $1000 per year certainly sounds within reach.
posted by Vorteks at 2:13 PM on July 25, 2011
Are you a developer? Can you build a small app for the iPhone or for Android phones and sell it in the appropriate app store?
Are you a photographer? You could submit some of your work to sites that sell stock photography and make money when they resell it.
Are you a writer? You could write a short (or long) story or book and self-publish it in Amazon's kindle store.
Few people get rich by doing these things, but $1000 per year certainly sounds within reach.
posted by Vorteks at 2:13 PM on July 25, 2011
Response by poster: Just as a follow-up, I took a side job which adds ~$400 to my bank account each month. So, taking into account a possible slow season, we're talking $4000/year.
posted by jander03 at 9:28 AM on October 22, 2011
posted by jander03 at 9:28 AM on October 22, 2011
This thread is closed to new comments.
(Mechanical Turk workers are paid the equivalent hourly rate of almost nothing, I would use your skills elsewhere)
posted by devnull at 5:33 AM on July 21, 2011 [3 favorites]