With the economy in turmoil, consumers can't count on much these days.
Getting loans for cars, houses or anything else is no sure bet. Credit card companies are clamping down on credit limits. The stock market is taking investors on the bumpiest of rides. The equity in your house is getting squeezed as home prices have halted a once-steep climb.
And costs keep going up.
What better time to start squirreling away some extra cash - above and beyond that cushion of three months' living expenses the experts say you're already supposed to have on hand for emergencies. But how?
With a good plan and some extra budgeting, financial planners and counselors say, you could save at least $1,000 by the end of the year, even without a big boost in income that has eluded so many households.
First, they say, it will take a shift in thinking about daily spending.
"Those who have already been saving are nervous about their money - 'Should I leave it in the bank or money market where it is?' while those who are going through a credit crunch are probably saying, 'What money? I don't have any to save,' so it's not a bad idea to get into the mind-set of saving instead of spending before the end of the year," said Gerri Detweiler, a credit adviser for Credit.com. "Cash is the way to go."
Frugality, she says, is coming back in style just in time. Not that the frugal living movement that became popular in the early 1980s ever really went away, she said.
"But it got drowned out by all the money people were making," Detweiler said. "With house values and the stock market up, we forgot about thinking about tomorrow."
The current credit crunch is serving as a wake-up call for many, experts said.
"There's been a lot of adversity for people this year with the credit markets and with the cost of gasoline and utilities going up," said Jim Godfrey, president and chief executive of Consumer Credit Counseling Service of Maryland and Delaware. "With today's economic news, a lot more people are concerned with saving and how they're going to save."
Many people have overextended themselves on housing and on using home equity loans to buy new cars or fund other types of spending, said Steven Thalheimer, principal of Thalheimer Financial Planning in Silver Spring.
"I don't think many people really have an idea of what they spend and how much they can truly afford," Thalheimer said. "People need to have some system or budget in place, not for living within their means, but for living below their means so they can save. Not just for retirement, or for emergencies, but to save ahead of time for big-ticket items that come up throughout the year."
Saving at least $1,000 by the end of the year could allow consumers to pay cash for all their holiday purchases, instead of piling new debt on top of old, said Gail Cunningham, a spokeswoman for the National Foundation for Credit Counseling. Cunningham says it's not realistic to think a family can totally forgo spending on holiday gifts, regardless of how strained their financial situation has become.
If it doesn't go for holiday spending, an extra $1,000 could be used to help pay for a home repair. It could help with tuition. It could whittle down debt. It could help establish an emergency savings fund or be invested.
To get there, here are a dozen tips from experts on how to save at least that much by the end of the year:
save a grand
Here are some tips from experts on how to save at least $1,000 by the end of the year:
* Stop charging and pay with cash. Counselors say that people who pay for purchases with cash typically save about 20 percent. Estimated savings: If you charge about $1,000 each month, about $600 over three months.
* Don't discount your pocket change. Each night, empty your change into a jar. Or, save the change each time you break a dollar bill. Estimated savings: $30 to $50 a month, counselors say, or at least $35 over three months.
* Wash your own car, says Jim Ludwick of Main Street Financial Planning. Estimated savings: $60 over three months.
more ways to save
Here are some more ways to save $1,000 by the end of the year
* Lower your food costs. Take your lunch and coffee in a thermos to work instead of buying it daily. Plan meals for a week at a time and make just one weekly trip to the grocery to reduce impulse buys. Estimated savings: $300 on lunch alone, over three months.
* Carve $10 a month from five spending categories that are not fixed: For instance, eating out, (order water to drink or cut back on dining out) shopping, (shop at malls only when an item is needed) and utilities, (lower the thermostat at home; turn off lights or unneeded appliances.) Estimated savings: $150 over three months.
* Eliminate bank fees. Use a bank that has ATMs nearby, to eliminate fees assessed for using out-of-network bank machines. Look for a bank that offers free checking to avoid fees associated with checking accounts. Estimated savings: $50 over three months.
* Pay yourself. Take an extra $50 a month, or pay period, from your wages and have it directly deposited into a savings account. "We always encourage people to pay themselves every month in a savings account, just as if it were one of their creditors," Godfrey said. Estimated savings: $150 over three months.
* Have an insurance checkup, and make sure you're not over-insured or under-insured. If you can handle raising your deductible, that will save you money each month. "Definitely get on the phone with the insurance company and see whether you could lower your homeowners or car insurance," Detweiler said. Estimated savings: $35 to $75 over three months.
* Eliminate little-used memberships or subscriptions, for instance at gyms or fitness centers or for online music services. Eliminate premium or other extra-cost channels on cable TV. Review your cell phone package to see whether the minutes are the right amount for your calling patterns. Estimated savings: $12 to $50 per month, or about $75 to $150 over three months.
* If you rely on a cell phone, think about eliminating the land line. "There is no need to pay for both, for folks struggling with a budget, and that will free up money," said Godfrey. Estimated savings: $105 over three months.
* Reduce driving, walk more, take fewer trips, financial planner Jim Ludwick suggests. Estimated savings: $200 over three months.
* Kick bad habits. Buying cigarettes and lottery tickets each day can add up quickly. Estimated savings: $100 over three months.