Automatic savings & Daily expenses

Today, I'd like to speak to the advise of automatic savings. We read a book a while back that most of you I'm sure are familiar with; "Smart Couples Finish Rich" by David Bach. In the book, he comments on the "Latte Factor" and how small spending each day add up to a big amount. Well, this is true. We did the calculation of our daily spending and realized that we were spending money of items we can certainly cut down on such as our daily coffee or lunch. We reduced those costs by making coffee at home and bringing lunch to work. Yes, it's a pain to pack a lunch somedays, however, we found that at the end of the day, it was worth the effort. Through our online banking, we set up automated savings withdrawals. For us, we timed the automatic savings withdrawals with our pay periods so that we ensured to "pay ourselves" first. The remaining would be for expenses. Soon enough we were accumulating a significant amount.

The automation is a wonderful thing because you forget about the savings and only see what you have left in your bank account. Technology is a great thing.

In terms of reducing expenditure, I have to say, the task of analyzing your daily expenditures is tedious. However, if you're tired of wondering where all your money went, try it out. You won't regret it.

One specific area we cut costs was our banking. We used PC Financial for our daily banking because of their no monthly service charges. Based on how bank fees are structured, I estimate we saved approximately $140.00 per year ($280 as a couple). That may not sound like a lot but we've each been using PCF for over eight years now so that's $1120 ($2240) in savings in that period of time.

I encourage you to take a look at your daily spending for about a month (a week at a time) and see where you can cut.