How do I save money effectively?

Question

My husband and I have a lot of things that we need to save money for. We're having a baby in late July, possibly early August. Our car died on us and we figure that it will cost more than what the car is worth to fix it. AND we need a new computer - prefferably a laptop type - because we live in a small town and can't drive to the city to get certain things we need - we have to order things through the internet.

So - how do we save money when we don't make very much money anyway? And how do we get the items we need and be able to afford everything else?

Answer 1

You save by not spending money. A flip answer I know, but that's what it is.

As to technique, have your employer automatically deduct X percent of your pay and deposit it into a savings or brokerage account. If you don't see it, your more likely not to spend it. I routinely do this having 15% automatically diverted to my retirement account and 5% diverted to personal savings.

As for the car and laptop, if you need to buy them, buy them used to save money.

Answer 2

Congrats on your baby.

First, make an automatic savings plan. Meaning, have a percentage of your income automatically put into a savings account. The things you mention here are short term, but I also suggest you consider long-term goals like home ownership (if not already,) retirement planning, college fund for junior, etc etc...

On the car situation, consider buying a good used car rather than new. A lot of people get sucked into this. Buying a new car is the worst investment anyone could possibly make. Also get financing before showing up at the dealership. They are going to try to sell you on the monthly payments instead of on the value of the car thus making another 2-5k profit on you. Boy Scout motto "Be prepared!"

Do you really need the computer? Or do you want it? Now you are saying that you "need" internet access also. Okay, if you insist.

A need is something critical for survival i.e. food, shelter. A want is something you "feel" like having.

You might consider picking up some personal finance books. You seem to be looking at only what is happening right now, which is fine. But the sooner you start planning for those life goals, the longer your investment has to work for you. More info at the page listed below.

Be blessed!

Answer 3

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