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Money saving budgeting options

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justice:
Am looking to save some money and first aim is to get a view on my spending via a budget. Now I know some websites / excel sheets / software exists but what are your experiences with them?

An idea I had is to compare my relative spending with people with a similar income / geography and see where I relatively overspent: for example if my heating bill is twice as high similar people like myself - clearly there's something wrong and I should think of home insulation. Not sure if this exists though.
Related threads I found:

* 15 Cool (Free) Tools for easy Expense Tracking and Budgeting
* Looking for finance app
* Good websites/blogs/programs for managing money?
* Money Management Software
Also good ideas on how to save money are appreciated ;)

johnfdeluca:
First thing in order to help build a savings is to get a high interest bank account.  I bank at Salem Five Direct http://salemfivedirect.com/ - my checking account earns under 4% now but still a great rate (given the current economy)....especially for a checking account.  I also got free order of 50 checks (which will last me a lifetime since I almost never actually write a check anymore) and a $25 bonus for opening the account.  It has no minimums, no fees and ATM reimbursements when using another bank's ATM (up to $15 per statement cycle).  That's better than my ING Direct Savings Account.  There are banks that have better checking rates but those often require you to have x number of debit card transactions per month which I don't want to have to keep track of.

To see the current deals check out one of the blog/forums for banking such as:
http://bankdeals.blogspot.com/2007/11/high-yield-reward-checking-account-news.html
http://bankdeals.blogspot.com/2007/03/best-checking-accounts-online-high.html
http://www.ibankdesign.com/board/index.php?act=home
http://www.fatwallet.com/c/52/

cranioscopical:
Also good ideas on how to save money are appreciated
-justice (January 24, 2008, 03:32 AM)
--- End quote ---

Whenever I've taken a look at my spending patterns with an eye to saving I've come to the conclusion that there are few, if any, 'magic' areas where cuts will work wonders. Either I can't or I just don't want to cut big-budget items to a significant degree.

Further, having been desperately poor and now, fortunately, not so poor I can tell you that the latter is better. Cutting only discretionary spending seems too much like removing the reward for hard work. On me, at least, that acts as a disincentive.

In my experience it's the mind set that matters more than the strategy, and it seems that you're on the right road by wanting to save some more.

Perhaps the best plan is to aim for a small percentage cut across the board. To give yourself an incentive, try the old-fashioned step of putting the 'savings' somewhere in physical form. For example, you mention heating -- turn the heat down by 1 degree, estimate what that'll save over one month and drop that physical amount into a jar. Next time you are about to stop for coffee, give that one occasion a miss and drop the physical amount into a jar. About to buy the daily newspaper? Miss a day and drop the physical...

Try to cut everything by a small amount. It's surprising how many of the "essentials" can be cut without any really negative impact if only the cuts are small.

Try that for all aspects of your life for a month and see if the result seems worthwhile. If so, open a separate account somewhere as johnfdeluca suggests, keep going, and watch your account grow. Results not worthwhile? Double your cuts and try again.

Good luck with your effort, let us know when you have your next million!

Deozaan:
The best way to increase savings is to save early and think long term! I opened a new savings account at my bank last week and the banker showed me a sheet, where, starting at age 20 (kinda late for most of us here) if you save $1,000 a year (less than $100 each month) for 10 years and then never contribute another penny, you'd have more than $460,000 on a 10% interest rate by the time you're 65. Whereas if you start when you're 31 and invest $1,000 every year until you're 65, you have only about $350,000.

In other words, your total investment is $10,000 in the first example, but your total investment is $34,000 in the second example and you make about $100,000 less!

My wife left this open on my computer yesterday: How to Make a Million. It tells you how much you need to save each month at certain ages to have a million when you're 65.

I also recommend reading The Total Money Makeover by David Ramsey. He'll get you started on steps to take to come into big savings.

zridling:
I will become a millionaire the way Steve Martin advises: First, you get a million dollars....

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