Bloomberg Anywhere Remote Login Bloomberg Terminal Demo Request


Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world.


Financial Products

Enterprise Products


Customer Support

  • Americas

    +1 212 318 2000

  • Europe, Middle East, & Africa

    +44 20 7330 7500

  • Asia Pacific

    +65 6212 1000


Industry Products

Media Services

Follow Us

Bloomberg Customers

How Do You Save Money? A Plea for Suggestions

Posted by: Ben Steverman on July 22, 2008

If you want to be wealthy, you need a healthy income and you must invest wisely.
But neither of these are enough unless you’re saving enough.

Financial advisors often say convincing clients to save is their most challenging task. At the end of every month, even clients with six-figure incomes can find themselves short of cash to invest. So much money can walk out the door without us realizing where it’s going. Luxuries are fine, but very often we don’t distinguish between which are worthwhile and which are wasteful.

Every dollar spent now is a dollar you can’t invest toward long-term goals. And, with gas prices rising and the economy precarious, there is an added impetus to set aside more cash for a rainy day.

I’m writing a story on this topic, and I’m looking for suggestions for cheaper ways to live. What are good ways to cut back on spending? I’m not just talking about foregoing luxuries, but also avoiding unnecessary expenses, finding bargains and doing more with less.

I would love to hear what strategies you’ve employed, and whether they actually helped you to cut back spending and save more. Please send me an email — at ben_steverman [at symbol] — or submit your suggestions in the comments below. Thank you!

Reader Comments


July 22, 2008 8:24 PM

Treat your saving as an expense and take it off the top each paycheck. You can have your employer do an automatic payroll deduction and deposit to a investment savings account. Or you can have your back do a systematic withdrawal from your regular bank account to your investment savings account.

How much? Take 10% of your gross annual salary and divide it by the number of paychecks you get during the year. Fine tune as you go along.

Bargains. Why buy a brand new car when you can buy a a lightly driven near new car with a bumper-to-bumper transferable extended warrant?

Brown bag your lunch instead of heading to the food court. If the food court is also a social thing for you, then get a drink and a cookie to go with your brown bag. You could save $1000 in after tax dollars.


July 23, 2008 11:46 AM

Before making any purchase online, I usually do a quick google search for online coupon codes or redemption codes. Before you click "ORDER", if you see a box that says "Enter Coupon Code", then do a search for such coupon code. If i succeed and save some money, I then take the amount saved and dump it into a savings account.

If you find a 10% off coupon online off of a big-screen TV, you get to entertain your luxurious ideas in addition to dumping a few hundred into savings. WIN-WIN!

Andy Mulgrew

July 24, 2008 5:23 AM

To start saving we need change our spending habits. It is amazing how much I have been able to sock away by adopting the discipline of buying through bargains tracking websites like instead of impulse buying at the mall. Savings which are going to be used for retirement, children's education etc.


July 24, 2008 8:11 AM

Spending habits are hard to curb.
Look at what you buy and why you buy it.
How often you eat out versus cooking or making your own lunch.
Without thinking again, cut your eating out habit in half. After a 6 month period, cut it to once a week. No fast food unless starving and there is no choice at all.
Fast food should become a treat 2 times a month versus a staple every other day.
Make enough food the night before to take for lunch the next day.
Two cars? Drive one and take each other to work at least twice a week. You may have to get up a little earlier but hey, the savings on gas alone are astonishing.
Check your insurance policy. Are you paying for items you don't need like a one or two thousand dollar deductible? Why? A minor dent on your vehilce is now 1000 dollars. If claimed, your insurance simply goes up and most people don't ever claim because they know that. So why pay for a deductible you will never apply. Raise the deductible rate to 5000 dollars and watch what happens to your policy price.
Does your old car really need collision insurance? Why? How much is it worth. Under 5000 dollars which so many are.
How much are you paying for collision over the life of the car?
Keep the liability but scrap the collions and pay for it yourself if damaged.
The difference in premiums when you raise your deductible and cut out the collision is shocking.
Don't just jump in the car for a chocolate bar at the store. Walk. Or don't buy the snack at all.
Dont buy junk food at the grocery store.
Pop, chips, snack foods, prepared foods like microwave meals are all not only not good for your health, but unnecessary and cost big money.
Buy bulk foods whenever possible.
Bulk meat at Costco such as steak, ribs, chicken etc, cut up and divided then frozen costs half as much as purchased individually.
Bulk paper towels, toilet tissue etc as well is much cheaper.
Just the minor changes above can add up to hundreds of dollars a month.
Do larger loads only in the dishwasher and washing machine.
Don't use the dishwasher at all unless you really need to do so.
Don't blow dry your hair. Was there a blow drier available 30 years ago ?
Flush the toilet only every second time for Number 1.
The savings in hydro and water bills will shock you and these are all minor life style changes once implemented.
It all adds up to thousands of dollars per year if not more depending upon your current life style and it all goes back to the bottom line.
Buy a 5 year or older used car. The difference in price should pay for any repairs it may need in the future while you are not making loan payments. If the car turns out to be a solid vehicle, the loan money saved goes in your pocket.
Finally, cut out the electronic gadgetry being introduced daily such as that new cell phone, the new I-POD, the new play station add ons and so on and so on. Walk, jog, run, stroll, talk in some fresh air, be healthy versus sitting in front of all your new toys in the house with the air conditioning blasting. Turn down the air conditioner 2 degrees. Watch your meter slow down.
We live in excess. Simplify your needs, cut them in half and watch the savings and your health grow.
The economy however, will suffer but only for awhile. The makers and suppliers of " excess products" will simply have to get used to the fact that the consumer is not as needy as before.

Linda from Deerfield

July 24, 2008 2:25 PM

We haven't bought a new car since we were too young to know better -- saved thousands, probably 10's of thousands.

Always pay off the credit card in full. Insist on automatic withdrawal from your closely monitored bank account, so that you can never fail to pay on time (same for all bills). The cash back feature is worth more money than your interest-bearing checking account will ever pay.

Convince your municipality that charging for actual water usage is the only moral thing to do -- then stop watering the grass (it won't die) and think about how you use the rest. Our annual cost dropped $500, even before we started using rain barrels for watering plants.

Money saved on heating and cooling is like tax-free income that increases every year. I monitor our heating usage in BTU's per heating degree day per square foot so as not to be confused by variable weather and price. Comparison to studies told us our house must be leaking badly, even with decent insulation. Sure enough, sealing the gaps left by cable, central air, electrical upgrades, plumbing, duct joints, attic entrance, etc. and tightening up doors and basement windows reduced consumption 15% over the prior year, and we're not nearly done yet. Foundation, rim-joists, and semi-attic spaces are the next target. The newer addition was the worst offender, so don't assume anything. More insulation without attention to sealing will disappoint you. Always double check that the fireplace damper is closed and do something about it if it doesn't seal tightly -- it's a very big deal. Locking the windows makes them much tighter. All this improves cooling efficiency, too. Take the time to manage heat distribution -- heat rises, cold sinks. Let southern sunshine in when it's cold -- solar heat is free. Respect the value of shade in the summer -- trees, curtains and window shades.

Sliding doors are another story. They will always leak, even with maximum weather stripping; seal them as best you can and then close off the room where they are, isolate it from central heating, and let it stay cold, or replace them with quality swinging doors or a wall.

Open the windows on summer nights and close them early in the morning. Facilitate evening cooling with a whole house fan. Most days will not require any air conditioning (in the Midwest), which is the one most expensive thing you can run.

Consider the risk of every investment. For example, don't buy spiffy new windows unless existing ones are in really bad shape and beyond maintenance -- new ones may indeed double the heat retention, but good thermal shades or curtains will quadruple it. The risk is high that you'll never recoup the window money, because you can't take them with you and housing values do not always go up and new ones will not save as much heat as you are thinking.

Replacing incandescent bulbs with CFL's allowed our electric bill to remain the same after rates increased 30%.

Pay off the mortgage. Whatever the rate is, it's nearly equivalent to getting that return on your investment, and it's probably a better and safer return than any investment you can find right now. Chances are, property and state taxes alone will still let you itemize deductions. If you don't believe it, do the numbers. Needless to say, any mortgage that isn't prepayable without penalty is not one you want.

Any time you have a low income year, convert a chunk of IRA money to a Roth IRA. It is a great hedge against higher taxes in retirement (again, managing risk). The bigger your IRA and 401K are when you retire, the more taxes you will pay to get that money, and you or your heirs will be forced to pay it. Paying now will improve your ability to rigorously manage your retirement finances.

Don't forget to keep track of the cost of your taxable equities, including reinvestment -- you don't want to pay any more capital gains than necessary.

Dust off the bicycle. Plant some vegetables and fruit trees. It's fashionable, saves money, and studies show that digging improves bone strength better than almost any other form of exercise. While you're doing these things, leave the TV unplugged to eliminate the phantom current drain, then leave it off to eliminate advertisers' temptation to buy things that you don't need and that don't provide the hinted benefit. Be a critical thinker, and teach your kids what that really means. Businesses that cater to other businesses succeed by offering unquestionable productivity improvements -- it's time that business learned that consumers require the same thing.

La Roxy

July 24, 2008 3:30 PM

Three strategies:

1)I've found that just by asking, I can get some discounts that never occurred to me before. 10% off on drycleaning, a sample of something before ponying up for the larger quantity, a better wine for the price of a cheaper one on the list.

2) Being persistent usually pays off. I recently spent 30 minutes with two customer service reps to fight for a $50 rebate that my cell company, Sprint, promised long ago and then denied. $100/hour is way more than I make in my day job. Pick your battles, though.

3) Be brazen about bending rules. Just because a store announces "No returns" or "The sale ended yesterday" or "credit card minimum purchase doesn't mean it has to apply to you. Just find someone in the right mood on the sales floor and propose an alternative.

I've launched a blog called The Daily Asker, where I ask for something every day for a year. Discounts, promos, perks, upgrades -- anything to increase my bottom line, simply by opening my mouth. So far, this experiment is making me much more attuned to opportunities and possible hidden savings. I'll tally the results at the end of the year.

Please check it out at


July 25, 2008 4:43 PM

Ajay Ramachandran

July 27, 2008 11:03 AM

All investment advice says fund your savings account on a montly basis. I say do it reverse, pay your checking account - so you have to consciously spend money. If you need to make yet another transfer to the checking from teh savings (remember, savings gets your pay not checking), then you probably don't know how much you're spending.

Pay your savings first, then transfer only what you need to checking


August 1, 2008 9:35 AM

I'm going to modify some advice my grandfather gave out fifty years ago. The modification is to put away all your plastic, including your debit card and not take it with you. Make a budget and put the exact money you need to pay all your bills into your checking account. Leave the checkbook at home, but carry your savings passbook. Window shop as usual. If you really want the item, have the clerk put a hold on it, go to the bank, and withdraw the money to buy it. If you really want the item badly enough to go through all that trouble, then you must need it.

A couple used this method to save money. Both had good jobs, but had trouble saving for a down-payment on a house. They used Grandpa's method and six months later they were able to hand the builder a big wad of cash and said "start building".


March 13, 2009 2:05 PM

how do you save money


July 17, 2009 12:09 PM

Money saved is money earned.
So save money and invest properly and sistematically so that its value keeps increasing with time.
the investment can be in
Stock market 30% of your cash
Mutual fund 30% of your saved cash
Fixed deposit 20% of what you have with sweep in facility
and 10% in savings accout

Post a comment



Bloomberg Businessweek’s Ben Steverman focuses on the latest moves in financial markets and emerging trends in stocks, bonds, and funds, always with an eye toward giving readers a better understanding of the sometimes confusing and often chaotic world of money. Standard & Poor’s senior index analyst Howard Silverblatt will also provide his take on companies’ finances and the markets. Voted one of the “Top 100 Finance Blogs” in 2007.

BW Mall - Sponsored Links

Buy a link now!