For the creative people!?

Question

I just read an article on a creative way to save money. Apparently this woman saved every five dollar bill she came in contact with over a period of 3 years and put them into a savings account. Then when the account reached $2000 she bought a CD to earn her higher interest. In 3 years she saved $12,000! And thats not even including her REAL savings account or her checking. Anyone have any bright ideas on ways to save money? Some things that might help:

-I'm 21, and I'm a waitress

-I'm in college

-My bills include cell phone, car payment, insurance, 2 credit cards, and rent (A total of about $900 a month)

Also, if someone could explain what a CD is in detail that would be great. And some ways to make easy money (because I work at Denny's and the tips there suck!). Thanks a bunch. The most thorough answer will get 10 points, it doesn't matter who is first!

Answer 1

A CD is a certified deposit. It's those "Orange Savings Accounts" from ING you hear everywhere.It's a "better than nothing" savings account, since they currently give only 4% or less a year. This means, if you don't know any better about saving and investing, it's better than wasting spending elsewhere,

Not worth spending time shopping for, it's the same wherever you go these days, just go to your local bank and ask them what they offer, it shouldn't differ much than 4%.

BUT, here's the downsides :

1) As you may know, there are several banks that just failed, and are on the verge of failing, though your deposits are FDIC insured, the psychology of not seeing your money may hurt in case of such emergencies.

2) If you can wait for 4% a year, you save more by simply being a cheapskate, this means always shopping around, don't buy what you don't need. You'll easily save $500 a year (which is more than what they give you if you let them hold $10,000 in your account).

3) Look at the cost of everything compared to last year, you pay today at least 10% than you did a year ago. 4% interest will NOT help much (but again, better than nothing).

So, are there better ways to save?

1) From my personal experience, I just literally jar everything I have, pennies, nickels, dollars.

2) I buy silver coins when I had extra cash, since silver costs $18+ an ounce, I buy whenever I can, usually every $40 or more. Look up commodities costs and the trend the past 5 years, see yourself if this is worthy.

3) You're a waitress, so it must hurt when people don't tip. I would strongly suggest you find a better job where your minimum salary doesn't depend on "luck".

4) Don't be afraid to be called "poor" or "cheapskate", I take pride in being cheap and stingy.

5) Don't borrow, pay whatever possible in cash. Interest SUCKS.

6) You already have credit cards and a car payment, DO NOT GO FURTHER IN DEBT. Pay off what you have (ASAP) and start saving. ****this is the important part, be debt free before you think about saving, because debt interest ALWAYS exceeds savings interests***

Answer 2

Lol! I just finished reading this article too. That is definately a very creative way to save.

I always pay myself first out of every paycheck. I usually put 20% of my paycheck directly into my ING savings acct. Then I pay my bills etc. No matter how much you put into your savings acct. it will eventually add up.

This website lists the highest cd bank rates for each state:

http://www.money-rates.com/cdrates.htm

A certificate of deposit (CD) is a time deposit with a bank. CDs are generally issued by commercial banks but they can be bought through brokerages. They bear a specific maturity date (from three months to five years), a specified interest rate, and can be issued in any denomination, much like bonds. Like all time deposits, the funds may not be withdrawn on demand like those in a checking account.

If you open up an acct with ING Direct (find someone to refer you) you'll get $25 and they will get $10.

If changing jobs isn't an option how about selling on Ebay or Craig's List? You can look on the "free" section of Craig's List to find things to sell.