Saving money isn’t easy, but it’s essential to achieving financial security. Earlier this decade, people tapped into their home equity and credit cards to keep up with their spending habits. Now, slumping home values and a credit crisis have caused people to find other cash sources. That’s a good thing, because too much debt isn’t a good thing!

So let’s talk about saving some cash. You need to establish an emergency fund to take care of unexpected events. Don’t know if you’ve noticed, but unexpected events occur each month…..so there’s no big revelation here on the need for this fund. Setting a goal to establish a balance of $1,000 in only one month might seem like a tall order, but once you get started and stay committed, you’ll find that it’s not as bad as you might think.

To make it happen, you’ll need to go beyond the obvious savings path of cutting back on the latte’s and dumping all your movie channels in order to make good on your commitment to save $1000. Call it your Mad Dash to Stash Cash.

There’s a lot you can do to trim expenses, but how about finding additional cash? Could it be that those much needed dollars are just sitting there, waiting to be stuffed in your pocket?
It’s time to sell some things & do a few odd jobs.

Sell Things

A garage sale is a great option, but it doesn’t have to be your only one. By selling things today, you can easily add to your emergency fund. It couldn’t be easier these days with websites like eBay or Craig’s list, which is a free service. Sell some of the things you just don’t use anymore – they’ll be useful to someone else that will gladly pay you to take them off your hands. Some suggestions follow:

• You might have needed the latest and greatest techno gadget, but if you bought a new camera it is time to sell the old one.
• Your aunt bought you a sewing machine that has only one accomplishment: collecting cob-webs. Auction it off on e-bay so some lucky seem-stress.
• Have the rims, but can’t afford the tires? Post them on Craig’s List and get your money back out of that garage ornament.
• Time to end the shoe fetish or purse addiction. Sell ‘em off.
• Got some sticks in the garage that don’t see the fairways? Give them up and save on green fees.
• Old bicycles, gym equipment, tools…..you name it. It’s probably sitting there waiting to be turned into cold, hard cash.

Odd Jobs

Look at your skills and think about how you can use them to earn some extra income. Think about what you are good at, enjoying doing, fits your schedule and your current job; or is an absolute need in my area? People are looking to save money these days and you could be the answer by offering personalized discounted services. Here are a few suggestions:

• Good at Honey-Do’s? Become the local handyman/woman with simple marketing. Drive around the neighborhood and offer to paint shutters, stain the fence and clean the gutters. Do a great job and the referrals will keep coming.
• Love animals? Start a dog walking service or dog sitting service.
• Love kids? What parent wouldn’t want a more experienced sitter than their 15 year old neighbor?

Many things you like doing can be turned into a small business that will earn some extra dollars on the side.

Our modern day culture thrives on The Want over The Need.

What do you need? Very few things in all reality: shelter, clothing, food, love and understanding. This list doesn’t include 5 versions of ESPN, 600 thread count sheets or the latest gadgets. Not that those things are bad, but they become toxic when the desire for such things brings us to the point of living beyond our means.

Things really get distorted when it comes to how you spend your time and making things convenient. Madison Avenue is genius in convincing us we need certain luxuries, a washer/dryer combo that cleans and dry’s our clothes in 14 minutes or a sports car that goes from 0 – 85 in 6 seconds. Yes, that may be nice, but certainly not a need.

Why Do We Want So Much?

• Keeping up with the Jones’ – Sometime we spend money just to keep up with those around us.
• Avoiding the truth – It is easier to be oblivious to mounting debt or overspending habits than to deal with the change needed in your life when reality hits. Fear keeps us form seeking truth.
• Counting the chickens before they hatch – We are often overly optimistic about incoming money and start spending before it is received.
• Plastic doesn’t feel like real money – It is much harder to part with cash than the second credit card swipe at the cash register. Watching cold hard cash disappear is much more difficult.
• Immediate gratification – Driving straight back to convenience. We create you to be frugal with your time with the drive-thru Starbucks and “Instant Credit “options. We expect to get what we want when we want it.
• Lifestyle maintenance – Typically your expenses will increase alongside of your income. This impedes your ability to save.

If you deal with these motivations and keep them in check, you have a chance to beat the game and start to rack up some dollars in your savings accounts. The first step is to define what you really need, which will include some, but not all of your wants. Once you’ve done this, every time you are about to buy something, ask yourself “Do I really need it?” Or replace the word “need” with “want” in buying situations to see how you feel. “I need new sofa pillows.” vs. “I want new sofa pillows.”

If you still have trouble, think about tomorrow. Retirement? College savings for the kids? These things must be dealt with and the time to do something about it is now.
It is warfare out there. Marketers are taught that success comes from selling wants, not needs.

So be strong and keep asking, “Doo I really need it?”. It will get easier and easier to say no.

The Envelope System is a cash based budgeting tool that has been around for ages. Today, it continues to successfully hold a family to their budget. Some may think that a debit card is a safer alternative to credit cards, but when it comes to budgeting they can be just as dangerous. Both debit and credit cards offer the same convenience and problems – they are easy to use and they make it easy to spend all of your money. If you don’t use cash, you no longer feel the emotional pull of money being sucked out of your wallet.

In the attempt to be frugal, the Envelope System is a very successful technique that’s making a comeback these days. It takes a little bit of time to get started, but that is only because you have to understand your budget before you start using the system. The good news is it’s time well spent!

Getting Started:

1. Itemize all annual expenses. Include regular monthly expenses like car, rent/mortgage and utilities. Be certain to include irregular expenses like annual property taxes or semiannual car insurance payments.
2. Divide the annual amount that you calculated in step 4 by the number of times you get paid per year. This gives you the contribution amount per envelop per pay-period.
3. Figure other monthly expenses. Study the history of your spending and figure the amount you need per month all other expenses.
4. Group all expenses by category. For example; food, utilities, auto, etc.
5. Document it. Write out budget based upon the information you’ve gathered. You’ll need it in order to step back and see the big picture and as a baseline for where you started.

Stuff the Envelopes:

1. Get enough envelopes for each category.
2. Label each envelope with the name of the category and the amount you plan to contribute.
3. With each pay-period deposit the proper amount of money into each envelope.
4. Monitor and adjust the amounts as you notice left over money or struggles with each envelope. You made need to make adjustments from your original calculations and projections.

Empty Envelope = Stop Spending.

Once you are committed to the Envelope System you must stick to it! When there isn’t any money left in an envelope, you stop spending. It’s as simple as that. There may be a last minute party invite but if your entertainment envelope is empty it is time to RSVP No. Even if you have $20 left over in your clothing envelope and your favorite brand of shoes is on sale for $35, it is time walk away.

Revise and Repeat.

Your budget can’t be set in stone. Just as with life your budget will be ever changing so be certain to review your plan frequently. Daycare expenses will go away eventually or you may find a better deal when bundling your cable, phone and Internet. As you have left-over money each month allocate it to an area that may be stretched, maybe medical or food. With the cost of food and gas on the rise these days this may be an area that will be frequently stretched. However on a positive note, if you consistently have more money in certain envelopes than planned, set that money aside into an emergency fund envelope and save it for a rainy day.

The Envelope System may seem old school at first, but it works. It really does.