Investing Unit 3: Stretch Your Money

• Introduction
• Unit 1: Basic Building Blocks of Successful Financial Management
• Unit 2: Investing Basics
• Unit 3: Finding Money to Invest

• Saving Money to Invest
• Strategies for Saving Money to Invest
• Steps to Breaking Habits
• Comparison Shopper
• Fund Investment Program
• Stretch Your Money
• Summary
• Action Steps
• About the Author

• Unit 4: Ownership Investments
• Unit 5: Fixed-Income Investing
• Unit 6: Mutual Funds
• Unit 7: Tax-Deferred Investments
• Unit 8: Investing Small Dollar Amounts
• Unit 9: Getting Help: Investing Resources
• Unit 10: Selecting Financial Professionals
• Unit 11: Investment Fraud

• Study Guide
• Action Steps
• Monthly Investment Messages
• Glossary

Whether you save pennies to make dollars, break habits and bank the savings, or find that you are the beneficiary of a long-lost life insurance policy, you are the one who has to manage your funds to best meet your individual and/or family goals. Remember that saving money does not make one a tightwad. On the contrary, saving money often allows you to have more of what is important to you and your family. As you continue on your path to saving money, you may find that the following ideas will serve you well as road marks on your journey.

Adopt the Two-Week Rule

If you think you really want something, wait two weeks to get it. The purpose of this habit is to make you an impulse saver, not an impulse spender. The two-week rule does not mean losing out on a once-in-a-lifetime opportunity. How many items, such as expensive clothing, a new piece of furniture, a boat or recreational vehicle, or a new car, would not be there in two weeks? If you wait two weeks to buy big-ticket items, two good things can happen. You may find that the same item is less expensive somewhere else. Or you may discover that you really did not want the item once the initial excitement wore off.

Avoid Unnecessary Waste

Another principle to practice is keeping items that are still good. You can avoid waste, which translates into savings or more money for other activities. You don’t have to keep using items that need to be replaced, but do continue using those that still have value. The money that you would use for premature replacements can fund your savings and investment programs or purchase other goods and services for you and your family.

In a similar vein, don’t waste goods and services. Don’t leave the television on when nobody is watching it or operate the air conditioner when nobody is going to be in the house for hours. Don’t throw away a tube of toothpaste that is good for a few more brushes. These actions are related to the conservation of resources, not money; but in the end you save money, too.

Another related principle is to develop a positive philosophy regarding care and maintenance of goods. By taking proper care of products, using them in the intended manner, and maintaining them according to manufacturer’s instructions, you can greatly extend the useful life of an item. Instead of buying a new item, use the well-cared-for item and invest the money you would have spent. Let it be earning interest for you and contributing to your long-term financial security.

Become a Coupon Clipper

Would you think it was crazy to take a few dollar bills out of your wallet each week and throw them into the garbage can? That is exactly what you are doing by not using coupons for items that you normally buy or taking advantage of dozens of money-saving opportunities each day. If you spent five minutes a week cutting out coupons for your grocery shopping and saved at least $6.00 a week, that is the same as getting paid $72.00 an hour after taxes. In a year, you would save a minimum of $300.00. You would need to deposit $5,000.00 and get a 6% yield tax-free to make that much money. Remember, pennies do make dollars.

And finally, practice treating yourself. Having saved money by not buying things you don’t need allows you to spend money for the things you want and that make your life enjoyable. Learn to truly enjoy the fruits of your labor.