Finance Quick Answers
Does saving a little "here and there" really make a difference?
Remember the saying, "A penny saved is a penny earned?"
Unfortunately, many tend to ignore the message behind
this old adage because they fail to look at the long
term effect of saving. Savings can be more valuable than
earnings. Consider this: if you cut your expenses by
just $1, you save a full dollar. On the other hand, if
you pay 30% in taxes, to make enough to spend a dollar
you would have to earn $1.43. In higher tax brackets you
must earn even more.
This is just a simple example of how small savings
add up to big dollars. On a larger scale, think about
your weekly grocery expense. If you pay 30% in taxes,
spend 20 minutes a week clipping grocery coupons for
items you would buy anyway, and save $20 as a result,
that is the equivalent of a raise of nearly $30 a week.
So clip coupons, save that loose change, and watch your savings grow!
Written by:
Sandra McKinnon, Consumer & Family Economics Specialist,
University of Missouri Extension
Cynthia E. Crawford, Ph.D., Consumer & Family Economics Specialist, University of Missouri Extension
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Last update: Monday, July 28, 2008
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