The holidays are around the corner, and a lot of people are worried about how they are going to afford the costs of the season. But it doesn't have to be so painful. "Early Show" financial contributor Vera Gibbons showed that with a few simple changes, you can save more than $500 a month to stash away for the coming holidays.
ADJUST YOUR TAX WITHHOLDINGS
The average tax refund last year was about $2,400. A lot of people think that tax refunds are a great way to get some money in the bank, but that's misleading. If you received a refund that only means that you paid the government too much money in your paycheck tax withholdings. But if you get that money as you earn it, that money can earn money for you through interest. If you received a refund from the government last year, approach your human resources department and change the amount of tax being withheld from your paycheck by filing a new W-4.
There are calculators on the web that can show you exactly how much tax should be withheld from your paycheck on the IRS Web site, or on Kiplingers.com. The changes will go into effect on your next paycheck, and based on the average refund, one month of savings should be around $200.
Savings: $200 a month
CURB YOUR IMPULSE BUYS
This is big problem with a lot of consumers, women in particular. Sixty percent of women who responded to a recent survey by Consumer Reports admit they bought something on a whim over the past year; mostly clothing (25 percent). Generally these purchases were made at a mass merchandiser like Walmart or Target (33 percent) and 42 percent of those say they did it because the price was just too good to pass up.
Yet the average cost of most of their recent purchases? $108! So if you resist all impulse buys over the next few weeks, that's money in the bank.
Savings: $108 a month
BECOME YOUR OWN PETTY THIEF
According to one survey, 52 percent of Americans actually lose nearly $3,000 a year. We spend $250 a month on things we cannot account for, and have no idea where the money went. You have to more accountable to stop yourself from becoming a statistic. Take $2 out of your wallet every day and put it in a jar. At the end of the month you will have $60 saved, and the chances are you won't even miss that cash.
Savings: $60 a month
TAKE FEWER TRIPS TO THE GROCERY STORE
Almost half of all shoppers go to the grocery store three or four times a week. And the more trips you make to the grocery store, the more unexpected purchases you make. In fact, shoppers making a "quick trip" to the store usually purchase 54 percent more than they planned, according to a study published by the Marketing Science Institute. If you're spending an additional $10 more every time you make that "quick trip", that's an extra $120 to $160 a month! Go to the grocery store just once a week and impulse buys are now down to $40 a month. That cuts your total spending by $80-$120 a month.
Savings: Average $100 a month
BE A HOMEBODY
Enjoy DVDs and books from libraries - for free! If you'd normally rent a movie once a week and buy a book once a month, you can cut your costs by $30. Also, if you eat out one less time a month and you could save at least $60 a month (considering that a meal at casual dining restaurant costs about $20 per person and that you'd spend $80 for family of four). That's $90 savings a month.
Savings: $90 a month
ADDING IT ALL UP:
$200 for adjusting your tax withholdings
$108 a month for curbing impulse buys
$60 a month for being your own petty thief
$100 a month for once a week grocery shopping
$90 a week monthly entertainment expenses
That's $558 total in monthly savings.
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