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Saving money in these economic times

Invest and save

You can still save money in tough times, but it takes some thought and discipline on your part. Here's what a banker and an economist advise.



These are the times that try our wallets. But if you think that higher prices at the pump and the grocery store mean that saving for the next rainy day – or even your next vacation – is surely impossible, think again.

With a little thought and some planning, you can develop a strategy that will allow you to save a few dollars and even have enough to make some investments in very worthwhile bargains. While it is true that "these are difficult times," Dennis Hoffman, a professor of economics at Arizona State University, says, "it's also important that consumers understand there are pockets of bargains available, if you're willing to search and be ready to purchase."

When your budget is feeling pinched, that can be difficult. Amy Hurd, senior vice president and a regional manager of in-store services for US Bank, says it's important that families "truly understand where your money goes." She advises: "If budgeting isn't your thing, commit to at least two weeks of writing down everything – I mean, everything. You spend to see exactly where your money is going. You might be surprised at how much you spend on things that are really discretionary."

Then, Hurd also says, when you look at that list of spending, be ready to decide how you and your family define 'discretionary.' That morning latte for you, afternoon stop for a soda for your teen or weekend shopping date at the mall with your girlfriend may be justifiable if it adds real satisfaction to your daily life.

While you're tracking spending, take a little time to review your credit cards, too. "Consumers pay way, way too much in credit card interest," Hurd says. "Once you know exactly what you're paying, call your bank or card holder and tell them you've reviewed your payments and need to work with them on a better option."

"Banks want to keep you as a customer, and will often help you with a better rate or payment plan," she says.

Once you know how much you spend on what, you can develop a strategic plan to spend more carefully. Here's where you can begin to feel better about some aspects of the economy, Hoffman says.

For instance, if you need to purchase any major appliance, this is an excellent time to look for sales. "Manufacturers and appliance departments are dying to sell you something," he says.

If you've been considering updating a room or your yard, Hoffman advises "this is also an excellent time to find both do-it-yourself bargains from the major home improvement stores and even from contractors who want to keep busy during the housing crunch."

And to improve your economic perspective even more, you could take a vacation and save money, too. "Gas and airline tickets may be up," Hoffman says, "but if you search, you'll find some good prices on tickets. Once you get there, hotel rates are likely to be very good, and even restaurants are offering special deals."

It's all in how you strategize and balance your spending – and saving.

Tips on saving

"Saving is just a way of thinking," Amy Hurd says. "And here's an added bonus - if you see it as part of the way you live your life, so will your kids."

1. No matter what, pay yourself first. If you stash away $20 a week first, you'll never miss it. Or, at the end of the day, just put all your spare change into a big jar. You'll be amazed how quickly it will add up.

2. Keep your credit card(s) in a safe place that's not your wallet. If you have to retrieve one before using it, you'll have time to decide whether you really need that purchase.

3. Join a big-box club store. Shop with a neighbor to split purchases.

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