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So you don’t want to eliminate your morning cup of coffee from your routine just to save a few bucks a week. As a coffee drinker, I understand.  But what other ideas can you think of? No matter which books you read about money, you will never be completely satisfied with their recommendations because your life is different than theirs. What is easy for them to sacrifice may be difficult for you and vice versa. This is why it is extremely important to consider what you bring to the budgeting table. No matter what source you turn to for financial help, you will still be a crucial part of the process.

Is what you are saving for worth sacrificing for?

This is the most important question to ask when you are thinking about changing your lifestyle to save for something you want. If you don’t want what you’re saving for more than you want your current routine, you will most likely not succeed in your efforts to save.

What can you do without?

This is the second question you need to ask yourself when thinking about cutting back in order to begin saving. What can you let go of for the greater good? If you choose the things you eliminate from your spending wisely, you will not regret them or rebel against your own plan. This will help you to save your money successfully.  

Before you slash your cable bill, think about cutting back on going to the movies. Before you cut your grocery bill, consider not going out to eat for a month or two. When you begin to review your spending in this way, you are enabling yourself to still be comfortable at home while curbing your spending outside the home on small luxuries. For example, before you change the stores where you shop, change the frequency with which you shop.

There are many ways to begin cutting back and making small changes to save money. You just have to be creative while tailoring your cutbacks to line up with the culture of your particular family.

As we wrap up 2009 and go into 2010 I just want to remind you of a very important change that is going to occur next year. The Federal Reserve has acted on behalf of consumers and has decided to limit the overdraft fees that banks can charge. I don’t know why there was no thunderous applause but I will assume that you are in shock and move on. 

As a former banker I cannot tell you how many times I have explained to customers why they were charged overdraft fees. I remember hearing my frustrated clients tell me “If I didn’t have enough money in the account why didn’t they just decline the card!!!!” Then I would have to half heartedly explain the banks logic (which I did not agree with). “Well Mr. Customer the bank wants to help you make sure your bills are paid and they wouldn’t want your check to bounce so they decided to pay the charge and then charge you for the courtesy of covering your purchase. By the way that service charge will be $34.”

I used to feel so bad for my clients because they were right. Why would a bank give me money I didn’t ask for? The answer is because it is profitable. For years banks have capitalized on the bad habits of American consumers. However in light of the recent shift in American leadership and policy, the Federal Reserve decided to step up and act on behalf of the American taxpayer.

Here is a quote from the beginning of the press release they distributed on

November 12, 2009:

For Immediate Release

“The Federal Reserve Board on Thursday announced final rules that prohibit financial institutions from charging consumers fees for paying overdrafts on automated teller machine (ATM) and one-time debit card transactions, unless a consumer consents, or opts in, to the overdraft service for those types of transactions.

Before opting in, the consumer must be provided a notice that explains the financial institution's overdraft services, including the fees associated with the service, and the consumer's choices. The final rules, along with a model opt-in notice, are issued under Regulation E, which implements the Electronic Fund Transfer Act.”

In plain English it means that unless you give them permission your bank will no longer step in and cover any ATM withdrawal or any one time debit card purchase (grocery shopping, Walmart, etc) you make. Your card will now be declined if there is not enough money in your account to cover the purchase or ATM withdrawal. This change takes place as of July 1, 2010. Please mark your calendar for the change and stay tuned for next month’s article because that is only half the story.