Saving money doesn’t come naturally to me; I have to work hard at it. According to the US Department of Commerce the national personal savings rate is about 6% which is an improvement considering it dipped below 0% in 2001. However, I think most people would agree with me when I say Americans need some strategies to bump their savings rate up because we can do better than 6%! Since I know saving money isn’t easy, I’ve concocted some mind bending tricks to make me save more of my money.

Pocket those Percentages.

One way I’ve been able to stash some extra cash is to set aside a percentage of my income. Using percents makes it easier for me to feel like I’m accomplishing my savings goal, especially since I live on a fluctuating income. I set aside 10%  percent from every source of income I receive and apply it towards savings. I auto debit the amount from my pay check making it easy for me to not count it as “income.” For all other sources of income, I automatically move 10% of the total check to my savings account.

If I had a set amount, I’m not sure I’d be able to meet it every month and I’d become discouraged. Percentages work no matter what my income might be in any given month.

Don’t Spend the Lincoln’s (or Benjamin’s, or Jeffersons, etc.)

I came across this tip on another website (of course I don’t remember which one!) that used a mind trick to save some extra cash; select a bill of choice and make a commitment to NOT spend it. I rarely have cash on hand, however, my goal is to save every Lincoln I come across. Five bucks here and there will eventually add up. After three to six months, my goal is to deposit the total into my savings account. This might motivate me to use cash more often. Of course the objective here is to increase your savings account, so place the cash where you can forget about it for a while!

Save those Gifts

Birthday’s, anniversaries, and even holidays are great ways to boost your savings. Deposit cash gifts into your savings account and turn gift cards into cash by cashing them out, or selling them. If the gift card is from a place you normally shop, save them for future use and stash the cash value in your savings account. If you don’t feel comfortable turning a gift into cash, tell family and friends that you’re working hard to ramp up your savings and would prefer gifts that help accomplish that goal.

Find Motivation

Another great way to get motivated to save more money is by using an online company that offer rewards for saving such as SaveUp. SaveUp wants to make saving money fun and offers daily give-aways to help motivate their members. Setting up an account earns you points that you use to “play” a game for a prize. Prizes include cash, bills paid, cars, shopping sprees, and many other options. Just a warning: SaveUp is a little addicting.

Do you use mind tricks to save more money?

For 2012, I’m focusing on using my Quickbooks reports to design a more realistic budget for the New Year. In the past, I tried creating a “utopia” style budget that was unrealistic and disappointing each month. Yet, before I can take on the task of formulating my budget, I need to really look at where my money went this year. I like how Newlyweds on a Budget calculated her expenses based on every $100 so I decided to do a similar calculation:

For every $100 I spent.…

$45 went towards rent and utilities. Ouch! Mock me all you like but that’s the price I pay for living in the second most expensive city in the US.

$8 went towards the car. Much better. Must have something to do with being a one-car family and biking a lot.

$7 went towards the purchase of household items. This was mainly our new couch and refrigerator. Moving often equates to new purchases.

$13 was applied towards groceries. I think we can do better than this in 2012.

$7 was applied towards business expenses.

$4 went towards personal items like clothing and doctor’s visits.

$3.50 was applied towards meals eaten out and entertainment, such as movie rentals (Netflix and Redbox).

$10 went towards a bunch of miscellaneous expenses like my Starbucks, postage, travel, gifts, insurance, etc.

$2.50 measly dollars was applied towards our savings. I think I need to be grounded or placed in the time out chair.

I can definitely improve on groceries, business expenses, household purchases (I’m hoping there just aren’t any this year!) and miscellaneous expenses. I’m sort of stuck in a lease this year, so my rent and utilities will remain about the same. However, I’m giving myself a big pat on the back for reducing my meals eaten out and entertainment by $1.00. I’ve also reduced my Starbucks expense by 90-cents per $100 as well. If I can cut out a few more dollars per category (minus rent/utilities), I should be able to boost that savings amount to $7 per $100 which would put me on target to meeting next year’s savings goal.

Quarterly updates should help.

How do your expenses stack up?

It’s time to get creative when it comes to budgeting. Instead of listing the pros and cons and then explaining how to go about creating one, I’m going to experiment a bit here.  I’m breaking it down into steps, like a recipe. Here’s my attempt at creativity (or a new perspective on budgeting):

A Yummy Budget Recipe

• Light that fire under your butt and Pre-heat your bank account
  • What are you spending? Do you even know? Look at one month’s worth of spending and add it up.
  • How much do you make? Add up all your income.
• Add a pinch of calculations
  • Now that you know how much you spend and earn, what’s the difference? (This is second grade math, people.)
  • The total is what you have left over.
• Dice the expenses
  • Did you find that not much is left over at the end of each month?
  • Time to dice up the expenses and reduce them to less than your income.
• Add a splash of savings
  • Now that you have something left over, automatically deposit it into savings.
• Bake the budget for 3 months
  • Reevaluate your expenses and income (or budget) after 3 months.
  • Are you on track? Are you saving more now? Fix it if need be.
• Serve with humble pie
  • Now that you’ve calculated income and expenses, you have an idea of what’s a “need” and what’s a “want.”
  • Stick to what’s a “need” and an occasional “want.”

So my recipe isn’t an exact science, but neither is a budget. The bottom line is spend less than you earn, no matter how you get there!

How do you budget?

This post was originally published on Budgeting in the Fun Stuff as a guest contributor.

Growing up in a frugal family that saved a small fortune on a conservative fireman’s salary, one would think I’d follow in these similar footsteps and end up the ultimate uber-saver. Not so; as life would present too many tantalizing baubles and opportunities to spend my hard-earned money on. I could blame my deprived childhood, due to extreme frugality, on my poor savings habits and psycho-analyze my behavior as trying to make up for things I missed out on as a child. But let me be realistic and honest; I let spur of the moment opportunities seize my usually money-conscious brain and talk myself into freak lapses of budget-blowing insanity. Instead of sticking to my guns and meeting my saving goals, at the end of year I look at the paltry amount I’ve accumulated, and vow to do better.

This year I’ve come up with a plan to meet those goals through some extreme, at least for me, strategies. Some of these ideas I’ve gleaned from reading personal finance blogs, others I’m making up as I go and I’ll review their effectiveness at the end of the year based on if they saved me money or just wasted my time.

Savings “Bins”

I currently have 3 different savings accounts with small amounts in each and think this is because I haven’t really labeled most of them for specific purposes.  Although the one I’ve labeled, “sister’s wedding fund”, I’ve  found that I’ve been quite diligent in sticking a set amount every month in that savings account and keeping my grubby little paws off of it since it has a particular purpose. Obviously, this method is working for me. Now all I have to do is label the other two accounts and set a specific monthly savings amount.

I’ve decided that the one I can get to most easily needs to be my slush fund/emergency account. My goal for this account is to continually keep at least one month’s total amount of bills.  However, the hurdle with this account is because my income fluctuates from month to month, I sometimes need to dip into the slush to pay for upcoming bills. I’ll have to review this account over a quarterly period instead of month to month.

The online savings account that is a little more difficult to touch will be my long term savings account, or “house” account. Since one of my big goals is to own a house within the next 3-5 years, I need to devote as much money as I can to this account if I ever want my dream to materialize. A realistic goal is to set aside double what I’m already depositing. This will be the tricky part as I find myself coming up short of this past year’s savings amount.

To meet these savings goals, I’ll have to really reign in my budget and find out where it’s “leaking.”

Status: Having 3 accounts for specific purposes has been working out quite well. I haven’t been meeting the monetary goal I had originally set for each account, but it’s a start.

Finite Gift Cards

A few of the “leaks” I’ve noticed include over-spending on our daily habits. These habits appear to be budget-breakers, so to help me reduce over spending, I’ve decided to use a couple of strategies:

1. A pre-determined and limited gift card
2. A Starbucks card

My Starbucks Gold card can be loaded at the beginning of the month with a set amount on it. Instead of loading it whenever it runs out, I will load it on the first of the month and when it’s gone, then it’s time to make my own drinks from home. Setting a pre-spending limit will keep that part of my budget intact.

The next part of the budget that needs some work is my husband’s habits. Instead of letting him swipe his debit card whenever he needs a pack of cigars, he’s going to be given a finite gift card that I’ll load on the first of the month. He’ll have to make that baby stretch for the entire 30-day period.

Another great idea for using gift cards for everyday purchases, is finding discounted gift cards for sale at store I regularly visit. If I can purchase a $40 gift card to a store for $35, that’s a savings of five bucks.

Setting finite amounts at the beginning of the month should plug up the holes I’m finding and allow me to save enough for my “house” fund.

Status: I never started the gift card strategy, but I’ve been really good about putting a predetermined amount on my Starbucks gold card. I’m spending quite a bit less at Starbucks this year because of this strategy.

Go, Cash, Go

Another leak I’ve noticed is the amount of money we spend eating out, even at fast-food places. A few dollars here and there never seems like a lot at any one time, but those dollars begin to add up and all of a sudden it amounts to a large portion that could have been stuck into my emergency fund.

To fix this leaky sieve, meals out will have to be cash-only. Since I’ve already budgeted a portion of my monthly income towards meals, this amount will be set aside in my Mason jar at the beginning of every month. When the cash runs dry, bye-bye McDonald’s cheeseburgers.

Status: A total and utter failure. I’ve realized I’m just not good with cash. Not only do I hardly ever have any on hand, when I do I have no clue where it goes. On a side note, loose change does end up in my Mason jar and we used that amount this year for our Sequoia camping trip.

Overflow Buckets

Since I use Quickbooks to track my spending and income, I noticed that I made a few thousand dollars more than what I had originally budgeted for the year. But darned if I can’t find that extra amount I made! Where, oh, where did that extra cash go? It seems to have evaporated into the abyss of  the colorful pie charts that track my expenses and income.

This coming year, with a few safe-guards in place (finite gift cards, cash, and purposeful savings accounts) this overflow of income should end up in my emergency fund at the end of a fruitful month. Since the “house” account, “sister’s wedding” account, and the “ER fund” account will already be set aside at the beginning of each month, any extra savings at the end will be moved to the ER fund. That way the overflow of cash will be saved and not spent.

Status: I’ve been really good about putting extra money into the overflow account and sometimes transferring any left over to the ER fund. Not as frequently as I would have liked, but again, it’s a start.

Group Support

Finally, without anyone keeping tabs on me, I might quickly revert back to my old-self. Posting monthly or quarterly updates on my progress for each of these tactics will help keep me following my own advice. Hopefully by mid-year I’ll notice a huge improvement in my savings accounts.

Status: I found a little tracking widget that I use and update each quarter. So far it’s been moving in a positive direction. However, not working this last quarter of the year (finishing school instead) will probably mean little to no progress over the next 3 months.

Would these tactics work for everyone? It depends on how budget-conscious one is and if one is willing to keep track of their income and expenses diligently. Will these strategies work for me? I’ll let you know by mid-year.

Status: These have definitely worked for me, but I  know I can still do better. Next year, I’ll definitely continue with most of these strategies (minus the cash and gift card one) and continue to make progress.

How have your annual goals been going?

This is a guest post written by Corey @ 20′s Finances. He writes a personal finance blog where he provides valuable information for those new to managing their finances. Corey offers advice on investing, as well as providing creative ways to save money.

Weekend Millionaire

Have you ever wondered what it takes to invest in real estate? Perhaps you would like to know more about it before committing a lot of time and money. That was my approach when it came to real estate investing. One of the books that I read in learning about real estate investments was The Weekend Millionaire’s Secrets to Investing in Real Estate by Mike Summey and Roger Dawson.

Real Estate Giants

I don’t expect you to be familiar with real estate investors, but if you do any basic search, you will find that Mike Summey is one of the biggest real estate investors in the U.S. As the back of the book details, “he retired at age 50 with a seven figure annual income from his properties.” If there is anyone that I want to learn from about rental properties, this is one of the few people. The other author, Roger Dawson was a president of a large real estate firm. In this book you not only have the advice of one real estate guru, but two!

Weekend Means Weekend

I have read several books on real estate investments and this is by far the most informative. Their strategy for investing in real estate revolves around the idea of becoming an owner (not a landlord) on the weekend. They strongly believe that anyone (with enough practice and commitment) can become successful by following their plan. As a result of this being a ‘weekend gig’ they do not want anyone to have to be bogged down with the responsibilities of taking care of a rental property. The fact of the matter is that repairs are needed on days other than Saturday or Sunday. Their motto is that rental management firms exist for this very reason. They admit that this is not a ‘get-rich-quick’ scheme, but instead is a way to build wealth slowly over time. Why get burnt out in the beginning, right? For a nominal fee you can pay someone to manage the day-to-day things. This allows you to focus on the biggest way to make money: buying houses at wholesale prices.

Making the Impossible Possible

Summey and Dawson team up together to provide valuable tips to make this dream a reality. They recognize the difficulty of finding homeowners that will sell at wholesale prices, but also explain various circumstances that might motivate sellers. They also give creative ways to format offers on houses. Because they are primarily concerned with having a positive cash flow each month, they focus more on getting your mortgage under the ‘Net Operating Income’ (Income – expenses, including taxes, maintenance, etc.). One of the creative ways they suggest to write up an offer is to ask for financing through the seller at a lower interest rate than what could be obtained at banks or lenders. This can allow you to pay a higher asking price for the house (an incentive for the seller) while keeping your monthly payment low. You’d be amazed at how much the interest rate affects the payment.

Giving You the Tools to Get There

One of the other things that they do well is to give you practical tips to get started. Reading Section 4 (‘How to Power Negotiate’) will turn you into an expert negotiator. The negotiating tips are so basic that I am sure they will prove useful in other instances, like when I go to buy my next car. If that weren’t enough, at the end of the book they provide a timeline of 8 consecutive weekends filled with the steps to get started in real estate investments.

If you are interested in getting started today, the first step is to survey the market. Find out what houses are selling for and before you know it, you will be on your way to becoming a weekend millionaire.