Your good thoughts on saving keep rolling in.
One comes from Daniel Harcourt II, a banker in Schaumburg, Ill., who got the idea from a client he described as "an avid bargain hunter and coupon clipper."
"My client had saved a tidy sum, and when I asked how, she told me the story," Harcourt said.
By regularly depositing in her savings account the money saved with coupons and discounts, and having the interest compound for more than 10 years, her balance had grown to more than $30,000.
"I decided to give it a try and found to my surprise that it does work," Harcourt said of this saving strategy. "In three months, I have saved more than $300."
Saving this way "is not an easy habit to get into, since we are so used to spending," Harcourt said. "But once the habit is mastered, it is very easy to save and is fun. I am very thankful my client was so kind to share this savings tip."
So am I.
Thomas Haunty, a certified financial planner in Madison, Wis., advises avoiding big house and car payments.
"I have found that two major causes of lower savings rates are too large of a house and too-big auto payments," he said.
In particular, buying a smaller house than the bank or mortgage company says you can afford "ripples through your finances so that you have much more cash flow," Haunty said.
"Smaller houses have smaller repair costs, smaller remodeling costs, smaller property taxes, less space to furnish, etc., etc.," he said. (Among the etceteras, utility and insurance bills immediately come to mind.)
Before his clients shop for a house, Haunty works with them to calculate what he calls a personal "home affordability index."
He does it by drawing up a monthly budget, "with room for everything they want to do, from fun to saving for college and retirement."
The last items added to the budget, based on the money that is left, are the home mortgage payment and property taxes. Only then do his clients calculate how big a mortgage they can afford.
"They use that number so they shop for the right-priced home" that allows them to address their other goals, Haunty said. "Too many people buy homes first and hope their budget will somehow mysteriously work itself out, but too often there is not enough left for savings."
As for cars, they are depreciating items that lose rather than gain value over time, Haunty said.
"If we can buy used, we can save a lot of money up front and even begin to save enough to buy our cars for cash each time," he said. "Imagine a lifetime of interest saved by paying cash versus borrowing for cars."
Mark Hana, a certified public accountant in Orange County, Calif., offers another budgeting idea:
"When I've spoken with friends about their finances, I ask them if they get paid biweekly. If they say yes, I ask, 'What are you doing with your extra checks?' They usually look at me like I'm from Mars," he said.
"I explain they are getting 26 paychecks a year. If you budget your monthly expenses based on two checks per month, you will have two months a year with three paychecks. When that 'extra check' arrives, put it in your savings. If you take home $1,000 every paycheck, you will save $2,000 a year by simply budgeting based on two monthly paychecks."
Humberto Cruz is a columnist for Tribune Media Services. E-mail him at yourmoney@ tribune.com.