Today it’s Raining: Tips to Saving Money 

Work/Life Balance 

As a CPA, you are known for giving off-the-cuff financial advice to your friends, fellow employees, and clients, but how about paying attention to your own advice and try saving for a rainy day?

One of the only certainties in our world is that change will occur—and with change comes the reality that you may one day find yourself strapped for cash. You might be between jobs. You may be facing an emergency house repair. You might have spent too much over the holidays.

Whether it’s raining cats and dogs or merely sprinkling, preparation is key. Here are some tips on how to put away part of your paycheck.

Take Baby Steps
If you’re not familiar with Dave Ramsey, he is a nationally syndicated columnist and expert on debt and spending, with a tough-love, no-nonsense attitude. He has what he refers to as the 7 Baby Steps for anyone attempting to save money:

  1. Put away $1,000 in an emergency fund.

  2. Pay off all debt, and begin by paying the smallest debt first, all the way up the largest debt, in succession.
  3. Put three to six months of expenses in savings.
  4. Invest 15% of household income into Roth IRAs and pre-tax retirement.
  5. Set up a college fund for your children.
  6. Pay off your home early.
  7. Build wealth and give; leave an inheritance for future generations, if you can. 

Whether you subscribe to Ramsey’s 7 Baby Steps or go in another direction, you can easily see some patterns emerging from this list. The most obvious way to save is to try and put away part of your money, while also paying down debt.

What You Can Do Day by Day
You want to try and maximize your liquidity as much as possible. While it’s great to put money in the bank, most young CPAs want to maintain a respectable residence, a social life, and still have money left over for the unexpected. Here are some recommendations:

  • Drink the office coffee. Did you know an average hot beverage at your local coffee house will set you back at least $3 to $4 a day? If you go even three days a week, that’s about $40 over a month’s time. Think of all the things you can do with an extra $40 a month.
  • Bring your lunch. Sure, we all want to go out for lunch—and, of course, it’s great to do this now and then, but if the cost is coming out of your own pocket, you can save some money by packing your own lunch. However, don’t be caught eating lunch at your desk too often. Take a break for stress and sanity and each it in a common, internal area or even outside on nice days.
  • Cut down on laundry and dry cleaning. Enough said.
  • Get rid of your home phone line and use your cell phone. If you work for a firm or company, your landline is probably sufficient during the day; in the evening and weekends, take advantage of after-hours calling or get on a shared rate plan with your family.
  • Stop using credit cards. Use a debit card, instead, if you want to cut down on credit card spending. However, keep at least one credit card active. You’ll need it if you are renting a car or placing a deposit on an item. You also need it to boost your credit rating. The bottom line is to try and pay off your monthly balance.
  • Consolidate your debt. If you are in debt and owe, consider a debt consolidation plan with a bank or creditor. You can often negotiate for a lower interest rate and get some satisfaction out of paying one card instead of a whole bunch.

Use Common Sense
We were taught as children to save, and while the subject of compound interest may have been over our heads, we understood the basics. If you put money away, it will grow.

Use your common sense. In addition to the tips above, consider taking advantage of all the free services and offers available to you. Online, use sites like Groupon and LivingSocial to find local deals. Check books out of the library instead of buying them from a bookstore. Download free books to your handheld device.

Whatever you decide to do, you’ll also need to plan for emergencies. If you cannot seem to put away $1,000 as Dave Ramsey suggests, try putting $25 a week in a special fund. In just 40 weeks, you’ll have $1,000!

One final note: Be sure to check out Feed the Pig, AICPA’s Financial Literacy center. Although this is intended for the public rather than specifically AICPA members, the site has some great resources and many, many ideas on ways to save.


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