One of my goals for 2008 is to rebuild my non-retirement savings.

As of February 18, the balance in my non-retirement savings is $4,500.

My goal for 2008 is $16,000.  With the new baby on the way, I feel that it is important to have some extra cash ‘on hand’.  With that in mind, I will rebuild my non-retirement savings, and then I will focus on funding my wife’s Roth IRA for 2008.

Click here to view my No Credit Needed Network Chart - NCNSavings2008.

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I have updated my No Credit Needed Network Chart so that it reflects my progress as I rebuild my non-retirement savings.

I managed to add a little to my savings account, bring my total saved for 2007 to $2638.

Contrary to popular financial advice, I actually ‘pay myself last’.  I deposit our paychecks at the first of each month.  I then pay all of our monthly bills and we live off of whatever amount is ‘left over’.  If we have money left at the end of the month, it gets ’swept’ into our savings account on the last day of the month.  This goes against most conventional ‘wisdom’ - But, it works for us.

Quick note:  Not every dollar that gets deposited into our checking account ’sits’ there for the entire month.  I transfer to savings the portion of our income that is allocated for annual, planned-for, expenses like automobile insurance and life insurance.  And, if it becomes evident that we have ‘over-funded’ a particular budget category, I’ll make a mid-month transfer to savings.  The main point, however, is that we keep enough cash ‘on hand’ to cover monthly expenses.  One of the keys to the ‘No Credit Needed” lifestyle is to avoid a situation where I am ‘low on cash’.

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Back in December, I set some goals for 2008. Since then, I went ahead and fully-funded my Roth IRA for 2008. That decision, coupled with our recent van purchase, has put a rather size able dent in our non-retirement savings. So, I’ve decided to focus on rebuilding our non-retirement savings.

I have created a new chart over at the No Credit Needed Network page. Feel free to click-over and check out my progress. I’ve also added a new NCN Network mini-chart to my sidebar, here at No Credit Needed.

I have also decided to refrain from calling my non-retirement savings an “emergency fund”. Why? Well, the money in my savings account is for ‘emergencies’ and for ‘non-emergencies’, so, from now on, I’m just going to simplify things and refer to all of it as ‘non-retirement savings’, or just ’savings’ for short.

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Thursday evening, my son and I went to a local restaurant for supper.  After eating, my son asked for some chewing gum - you know, the little round gum that you get for a quarter from one of the machines at the front of the store.  He’s three, so he wanted gum for our whole family - Mommy, Daddy, Sister, and himself.  I had four quarters, so we loaded up on gum and headed home.

When we got home, I opened up a spreadsheet and began playing around with a few scenarios.  What if, instead of spending that dollar on gum, I had saved it?  And, what if I saved a dollar, every day, for a year? for a decade? for 50 years?  Also, what if I save more than a dollar, say, two dollars, or five dollars or even 10 dollars, per day?

Check out this chart I created -

Note, the following numbers represent the total amounts contributed to savings (w/ no accounting for interest earned).

If I save $1 per day, for 50 years, I’ll have $18,000.

If I save $10 a day, for 50 years, I’ll have $180,000.

But, as I mentioned before, this chart represents contributions - and doesn’t calculate interest earned.

So, let’s kick it up a notch and do some calculations, assuming a 5% annual return.

If I contribute $1 per day ($360 per year) for 50 years, at 5%, I’ll have more than $79,000!

If I contribute $10 per day ($3600 per year) for 50 years at 5%, I’ll have more than $790,000!

(Please note, I used a very simplified formula to calculate interest, based on annual contributions.  In reality, if you made deposits throughout a calendar year, you would earn even more interest!)

Isn’t that cool?  I like to look at charts like these.  I am motivated by “what if”.

As a side note, my son will only be 4 once, so I’m still going to buy him the chewing gum!  But, I’m also going to pocket some additional savings, so that when the time comes, I can buy my grand-kids a warehouse full!

(If you want to get really “pumped” about saving money - checkout what happens if you max our your 401k and Roth IRA contributions.)

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Day 2 :Brand Disloyalty

It is extremely easy to become a “creature of habit”. Examine the products / services that you pay for. Are you brand loyal or brand disloyal? Are you basing your purchases on price and value or habit and repetition?

Before continuing, it is important to note that there are times when it pays to buy the more expensive version of a particular product. But, for most situations, I have found that “generics rule”. Consider making the switch to to a different version of a product if you can get “more for less”.

Being Brand Disloyal doesn’t necessarily mean that you have to buy generics. If you are smart and patient, you might be able to use coupons and discounts to buy brand-name products. The key is to be totally Brand Disloyal while always looking for the true value of a product or service.

Have you considered using:

A different shampoo, toothpaste, deodorant, or other like product?

A new dry cleaner, insurance agent, gas station, grocery store, or restaurant?

A new author, website, or library?

The key is to embrace the fact that change can be a good thing. Final words? Why are you using the products and services that you are using? Are you making fiscally responsible choices? Have you even given these things any thought? True progress begins when we examine why we are doing what we are doing and then choose to change those behaviors that are not adding value to our lives.

If you have a suggestion for how we can exchange one brand for another and save money, leave a comment. If you are a blogger, write a post about brand disloyalty and contact me. I’ll be more than happy to link to your post.

Click here to read all of the 33 Days And 33 Ways To Save Money And Reduce Debt posts

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