Ideas to Save Money

Here you will find tips for financial management that are relevant and valuable any time, any place. These gems can save you time and money when making important financial decisions.

Saving More

 Despite the compelling arguments for salting away money, many folks save pitifully little. What to do? A vague commitment to save won't get you anywhere. Instead, you need to lay down clear-cut rules about saving and spending and then force yourself to follow them.

"When I get my bi-weekly paycheck, I think about how much I will need to cover outstanding bills and then I immediately allocate the remainder to mutual-fund purchases and a money-market account," says Patrick Sullivan, a 43-year-old federal government employee in Newport, RI. "I am probably able to save 30% or more of my take-home pay be being a smart spender -- or what my girlfriend calls 'thrifty'."

If you don't have Mr. Sullivan's self-discipline, you can always compel yourself to save by enrolling in your employer's 401(k) plan or arranging to have money automatically plucked out of your bank account each month and invested directly into some mutual funds.

Want to save even more? Lay down other rules. You might commit to saving all windfalls, such as money from second jobs, tax windfalls and medical-insurance reimbursements. Similarly, you might allow yourself to spend the cash in your checking account, while declaring your savings account, certificates of deposit and mutual funds off limits.

"When I was running a business, I put the checks we received into your checking account," says Jane Marlow Willis, a 58-year-old writer in Brandenburg, KY, who has done two stints as a Peace Corps volunteer. "But I put the cash we received into a savings account. When it got to be $1,000, I would buy a certificate of deposit."

Spending Less

If you boost your savings, you will be compelled to trim your spending. But where will you cut back? To get a handle on your spending, write down all your expenditures over the next week or two.

As you consider each dollar spent, you will instinctively tighten your belt. Looking for additional budget cuts? Try shopping for cheaper insurance, delaying your next car purchase, eating out less, taking cheaper vacations and using a home-equity loan to pay off costly credit card debt.

And don't overlook smaller savings. "I started clipping coupons when I was a young mother and we hardly had any extra money," says Fran Shaw of Fort Lauderdale, FL. "I would buy the paper on Wednesday or Thursday just to read the ads, clip coupons and write down the specials. I am now 62, a widow and still do this, even though I no longer have money problems."

Ms. Shaw also advises bringing your lunch to work, avoiding convenience stores and taking to your children to the free programs at your local library. "And stop throwing money down those Coke machines when you can save 50% by taking your soft drinks with you," she adds.

To keep spending under control, I am a big fan of leaving the credit cards and home and sticking strictly with cash and debit cards. But if you like the convenience of credit cards, consider the following example of Suzy Hoffman, a 37-year-old computer consultant in Milwaukee.

"I deduct each credit card transaction from my checking account, just as I would a check or cash-machine withdrawal, " she says. "Then, when the credit card statement arrives, I simply write a check to the credit card company for the total. Meanwhile, any rebates or frequent-flier miles from the card are mine."

Seven Ways to Boost your Savings

1. When you finish paying off the car loan, keep writing the monthly check but send it to your savings account instead.
2. Save all windfalls, such as money from tax refunds, second jobs, year-end bonuses, inheritances and medical-insurance reimbursements.
3. Add a few dollars to the monthly mortgage check, so that you pay off the loan more quickly.
4. Settle on a weekly budget, make a cash machine withdrawal for the amount and then spend only this money.
5. Sign up for your employer's 401(k) plan and set up automatic investment programs, where money is pulled out of your credit union account each month and placed directly into some mutual funds.
6. Go to the stores with a shopping list, and buy only items that are on the list.
7. If you have spare cash, get it out of your checking account and into a certificate of deposit, money-market fund or some other account where the money is less likely to get spend.

To read other great stories and learn useful tips for financial management, check out our online newsletter and Financial Tips page!

Insurance in a New Millennium
It doesn't have to be that expensive

Insurance is a consumer's nightmare: Costly, confusing, and unrewarding - until you have to use it. And that's when you often find out whether you bought the right coverage from the right company. There is a better way to buy home and auto insurance, and here it is. Here's how to purchase peace of mind now - and later. 

In each newsletter, we will discuss insurance topics such as: auto, home, deductibles, claims, savings on your premiums and managing your risk. Here is the first installment, just the cold hard facts: 

Top 10 Things To Know: Auto and Homeowners Insurance

Here is an overview of the most important points of this lesson.

1. Face it, you're a statistic. To an insurer, you're not a person, you're a risk. And an insurer bases its premium - or its decision to insure you at all - on your "risk factors," including your occupation, who you are, how you live, what you own, and how you behave.   
    
2. Insurers differ. Since insurers don't judge risks identically or operate with the same efficiency, they often price the same coverage differently. You can save a bundle by shopping often and casting a wide net.
    
3. Don't just look at price. A low price is no bargain if an insurer takes forever to service your claim. So research the insurer's record for claims service, as well as its financial stability. Some insurers have "come-on rates," rates to get your business and then they begin raising rates after one or two years until you are paying much more than you would have if you remained with your original insurer. Look out for cheap insurance rates, they end up costing more in the long run than a reputable insurance firm.
    
4. Go beyond the basics. Most states require only a minimum of auto-insurance liability coverage. And a basic homeowners policy may not promise to entirely replace your home. There is a big difference between an extend replacement cost and replacement cost coverage, so don't skimp on coverage. (Extended replacement cost coverage generally will rebuild to the original condition - replacement cost coverage only replaces what the actual cost of the property was, less depreciation).
    
5. Know your home's value. Establishing your home's replacement cost is essential to getting the right amount of coverage. A local builder can provide an estimate. In this rapidly appreciating market in Scott and Dakota Counties, it is in your best interest to look in the paper and keep an eye on what your neighbors are selling their homes for.
     
6. Insurance is meant to cover the BIG losses. You'll pay less if you shoulder more risk yourself. Take a higher deductible. Avoid add-on, specialty coverages. And try to cover smaller claims yourself.
     
7. Demand discounts. Insurers provide discounts to reward behavior that reduces risk. Yet, Americans waste some $300 billion a year by not asking for insurance discounts. Have you had any claims in the past 3 years? If the answer is no, call and ask for your preferred insurer discounts.
     
8. Ask for the real thing. Insurers cut costs by paying only for copycat car parts. Those parts can be inferior. Demand parts by the original equipment manufacturers (OEMs).
    
9. At claim’s time, your insurer isn't necessarily your friend. Your insurer's job is to restore you financially. Your job is to prove your losses. Your perspective on what's fair compensation may not be the same as your insurer's. Paperwork documenting your cost and your loss are what important to you.
     
10. Prepare before you have to file a claim. Read your policy in advance so there's no surprises at claims time. And regularly update your policy.

Strategies for saving money

Everyone has certain "triggers" that prompt them to spend money where they might have resisted. Temptation can be everywhere; after all, that's what advertising and marketing are all about. It's time to recognize your unique cues and stop them in their tracks.

Do you shop when you're feeling blue? Does a certain friend have more disposable income and urges you to go with her to that sale -- except it's still out of your range? Do family members harp on you to buy something for yourself because you deserve it?
Try these trigger-busting tips:

1. Stay away from those people who tempt you to spend:
   Having a cup of coffee or taking a walk with these people is a better use of your time together.
    
2. Don't shop if you're hungry, tired or depressed.

3. If you shop to get a rush, you may need professional help in letting go of the addiction. 
   Replace that rush with the good feeling you get from doing something for someone else.
   
4. Think of the consequences of making the purchase:
   What will it enhance? Does it further your goals in the long run?
    
5. Are there alternatives to buying? 
   Try renting, borrowing or even making it yourself. 
    
6. And if you do decide to buy:
   Do some major comparison shopping. It pays to scan the sales pages and let your eyes do the homework first. 

- adapted from personal-budget-planning-saving-money.com
 

  Unclaimed Property

Does the State of Minnesota have some of your money? If so, do you want it back?
Every year, SMFCU files an unclaimed property report with the State Department of Commerce. If we identify any member accounts that have been delinquent for over three years, and we can not locate the member, we also have to turn over the funds to the state. Here is what the State of Minnesota says about the unclaimed property it receives:

• Every day, someone loses some form of financial property because of a change of address, death, or just plain forgetfulness. What happens to these forgotten funds? The Unclaimed Property Division is responsible for holding the abandoned or unclaimed funds or property until the rightful owner or heir is found. There is a one in 20 chance that you may have $100 or more coming to you from the state's unclaimed property fund and not know it.
   
• Unclaimed property may be in the form of abandoned savings accounts, Certificates of Deposit, safe deposit boxes, uncashed paychecks or other remittances, travelers checks, stocks and bonds, insurance or uncashed tax refunds. They only tangible property the department receives is the contents of safe deposit boxes.
   
• In 2004, the Department will try to locate more than 40,000 persons and businesses to claim abandoned property worth 450 million. The Department has received the contents from 550 safe deposit boxes and over 15,000 security-related holdings.

To see if you are on the list, go to the State of Minnesota's Department of Commerce website and click on the unclaimed property list on the left side of the page.

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