Posts tagged best ways to save money
Military Savings Deposit Program (SDP)
Aug 12th
The Military’s Savings Deposit Program (SDP) is one the military’s best kept investing secrets. But don’t confuse the Savings Deposit Program (SDP) with the Thrift Savings Plan (TSP). TSP is available to everyone in the military. However, the Savings Deposit Program is available only to those serving in designated combat zones.
Military Savings Deposit Program (SDP)
The Military Savings Deposit Program (SDP) is a DoD sponsored savings account that offers deployed military members a guaranteed return on investment of 10% interest, compounded quarterly. The SDP was originally started during the Vietnam War as an investment opportunity for veterans serving in Southeast Asia. The program eventually went away, but it was resurrected during Desert Storm in 1991, then offered to troops in Bosnia in 1996. The program was expanded again in 1997, 2001, and 2003.
This is a great opportunity for those who put their life on the line every day, and one of the best ways to save money while deployed. There are several pros and cons to this program, so let’s take a look at how it works, then you can decide if this is a good investment opportunity for you.
How the Savings Deposit Program Works
Establishing eligibility. The DOD Savings Deposit Program (SDP) is only available to military members receiving Hostile Fire Pay for at least 30 consecutive days, or at least 1 day in 3 consecutive months. Once you have established eligibility for the SDP, you may begin making contributions, electing to with hold all or part of your paycheck (in $5 increments) to be be deposited in the SDP.
Contribution limits. You may contribute up to $10,000 total, but you are limited to monthly contributions up to the amount of your base pay (officers are limited to contributions equal to the highest enlisted pay rate). Depending on how much you earn each month, it may take you several months to max out your SDP contributions. Once your contributions are in place, they will begin earning 10% annual interest, which compounds quarterly. You can start and stop contributions at any time while eligible for the program, but it may take several days for the allotment request to take effect, so be careful with timing in regard to pay days.
Making Savings Deposit Program withdrawals. You contributions must remain in your SDP account until you return home from your deployment, except in certain cases due to hardships or limited other reasons. You can leave your contributions and earnings in the SDP account indefinitely, but your funds will stop accruing interest 90 days after you redeploy from the combat zone. Withdrawals can only be made once your eligibility for the program has ended (usually redeploying or leaving the combat zone).
Pros and cons of DoD Savings Deposit Program (SDP)
Advantages of the Savings Deposit Program:
- 10% interest… Need I say more? It’s nearly impossible to find a guaranteed return on investment of 10%.
- 90 days additional growth. You can earn interest on your SDP deposits for up to 90 days after you redeploy. An extra quarter of interest could be worth over $100.
Disadvantages of the Savings Deposit Program:
- Income is taxable. Interest earned in your Savings Deposit Program is taxable, even though your income while deployed is not taxable.
- Paperwork. You have to fill out forms to start the program and make withdrawals. The forms aren’t a big deal, but you have to take the time to go to your military finance office and find someone familiar with the program (many military members, including many in the finance office, are not aware this program exists).
- Messing with your military paycheck is never advisable. You must start and stop allotments each time you alter your contribution amount, and your military pay must be coordinated with the Savings Deposit Program. I know several people who experienced problems with this process and ended up waiting a pay check or two before their situation was resolved.
- It can take awhile to max out your contributions. Junior enlisted members may not be able to max out the SDP plan because it would take several month’s worth of paychecks.
- Your contributions are tied up until you return home. You cannot make withdrawals until you return from the deployed combat zone.
It’s not all gloom and doom, however. Even though there are several listed disadvantages, the guaranteed 10% return on interest is tough to beat.
Should you invest in the Savings Deposit Program?
I won’t make the call for you, but I will let you know the both my wife and I took advantage of the Savings Deposit Program while we were deployed. Based on some situations I have seen with the military pay system and the uniqueness of this program, I only recommend it if you have a well-established emergency fund in place, just in case anything goes awry and your pay is messed up for one or two checks. This program also works best if you will be in the region long enough to max out your contributions or at least come close. Otherwise you don’t gain much benefit. Finally, leave your deposits in for the full 90 days after you redeploy to take advantage of an additional quarter of compound growth.
Related posts:2009 Veteran’s Day Discounts
Save Big through Clipping Coupons
May 7th
Clipping coupons is one of the older methods of saving money. Although it has been around for many years, it is still one of the best ways to save money on your expenses. Here are the basics of how you can save substantial amounts through clipping coupons.
Coupon Savings
Manufacturers put out coupons on their products in order to lure customers into a purchase. If you make good use of coupons, you could potentially be saving substantial amounts of money. It is not uncommon for people to be able to cut their grocery bills by 10 to 25 percent by regularly using coupons. You can find coupons on everything from laundry detergent to diapers. If you have a family and purchase a wide array of products, coupons can be a huge help.
Some grocery stores will even run promotions that allow you to double or triple the amount of any coupon that you have. You need to pay special attention to these offers because they can save you quite a bit of money on your groceries.
Weekly Grocery Ads
Another way that you can save money on groceries is to pay attention to weekly grocery ads. These are ads that grocery stores regularly publish in local newspapers. These ads will tell you about additional discounts being offered by your local grocery stores. These promotions alone can save you some money on your groceries. However, when you combine these discounts with your coupons, you could potentially save even more. Many grocery stores will still honor your coupon even if they are running a special on a particular item. In some cases, they will not allow you to use both discounts, but it never hurts to find out.
Finding Coupons
There are many different places that you could potentially look for money-saving coupons. One of the best and most popular sources of coupons is your local newspaper. Most grocery stores put coupons or other information about promotions in a special section of the newspaper. If you subscribe to the newspaper and spend some time looking at these coupons, it could substantially lower your monthly grocery bill.
Another way that you can find relevant coupons is to look online. There are a number of different websites devoted to providing coupons to visitors. Many times, these coupons are even better than what you can find in the newspaper. Another good thing about using the Internet to locate your coupons is that you can specify what types of coupons you are looking for. This will allow you to zero in on exactly what you need and save time.
You can also find coupons on products that you have already purchased. Many times, manufacturers will provide coupons on existing products as a way to create brand loyalty with their customers. Take advantage of these offers and combine them with your other coupon sources to cut out a big chunk of your grocery bill.
3 Ways to Save Money When Running a Startup
May 1st
There are many techniques that you can save money with when trying to run a startup business. When you start a new business, there are a lot of expenses that you will have to deal with. Here are some of the best ways to save money when running a startup.
1. Outsource
There are many different things that you could potentially outsource and save significant amounts of money. For example, you should most likely outsource any accounting or human resource functions for your business. There are many freelance experts in every field that can work from a remote location without any problems and save you some money.
2. Eliminate Phones
In many businesses today, not every employee is going to need a phone at their desk. While certain employees will need access to a phone, most of them will be able to communicate on instant messenger or through a cell phone instead. This can provide you with a significant source of savings over the course of a year.
3. Google Docs
Instead of purchasing expensive word processing software such as Microsoft Office for all of your computers, you can use Google Docs instead. This is a free service that provides a word processor, spreadsheet, presentation, and many other types of software.
Saving Money during a Recession
Apr 29th
There are many strategies that you can save money with during a recession. Here are some things to consider about saving money during an economic recession.
Cut Your TV
One of the best ways to save money during a recession is to get rid of your TV subscription. With today’s technology, there are many ways for you to access the programs that you want to watch. You can watch replays of nearly every television show through the Internet. There are even devices that allow you to stream content to your television. If you are strapped for cash, this is one of the easiest ways to save $50 to $100 per month.
Use Coupons
Many people forget just how effective coupons can be. There are many different retailers out there that regularly offer coupons and discounts to their customers. By keeping track of these offers, you can potentially save quite a bit of money each month.
Online Auctions
If you are going to purchase goods, you should also consider utilizing an online auction. Online auctions sell every product that you could possibly imagine. In many cases, you will be able to purchase them for less than you would through a regular retailer.
Backyard Builder Discount Coupons – Backyard Builder Savings
Feb 6th
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Free Money Finance March Madness, Round 1, Posts 1-4
Jan 18th
Here we go with the first round of Free Money Finance March Money Madness (if you wonder what’s going on in these posts, see my article announcing March Money Madness and/or click on my March Money Madness category link and scroll down to read all the posts involved in this subject.)
I’ve listed each “game” (one post versus another) in segments along with the wording provided by the author when the post was submitted. I’ve also listed a keyword after each post title to make it easy to vote (as a made-up example, you can just comment: Game 1 – Saving; Game 2 – Investing, etc.) Be sure to comment which one you like the best out of each set of two — you will help determine the winner! Criteria for the best article is somewhat subjective, but you can use these factors as a guide: 1) practicality of the post 2) how interesting/provocative/unique it is, 3) the “personal-ness” of it and 4) its impact on net worth.
Here are today’s games:
GAME 1
- 11 Dumb Ways to get in Debt (Dumb) — There are many reasons why people fall in debt, such as medical issues, school, starting a business and purchasing a home. Some situations you do not have much of choice and the debt is for a good reason, for example if you get in debt due to school it’s fine because in the long run you will be able to make up for it. However there are some bad reasons why many fall in debt. This post illustrates the top 11…well not so good reasons to fall in debt.
VERSUS
- 55 Best Ways To Save Money: Frugal Ideas From Our Readers (Frugal) – 55 responses readers had to the question, “what is your favorite money saving tip”?
GAME 2
- Goals Are the Gateway to Financial Success (Goals) – The journey to financial success is not a sprint — you are not going to get rich quickly — but a marathon. It doesn’t matter how swiftly you pay off your debt or save for retirement. The important thing is to actually make the effort. If you don’t start, you can never finish. To know where you’re going, you need to set goals.
VERSUS
- Median vs. Mean: Know the Difference or Risk Being Manipulated (Mean) – The definition of median and mean and the difference between the two terms is poorly understood by many people and while in many data sets, there is only a marginal difference between the two from a practical standpoint, there is sometimes a stark difference between the two. As I’ll outline in this article, people toss around terms like “average”, mean, median and other statistical nomenclature without either understanding what they’re talking about themselves, or with the intent to silence critics with ‘fact’. Understand that various entities routinely manipulate how a piece of data is presented in order to beguile you, the recipient, in order to advance their agenda.
Best of 2009
Jan 7th
Over the past year I have learned quite a bit from my fellow finance bloggers. There have been thousands of excellent and useful articles published across the personal finance blogsphere over the last twelve months, below you will find a list of some of the best articles of 2009. Of course there have been many more excellent articles in the past year, these are just a few timeless articles I’d like to point out.
The Dividend Blog Guy reminds us of the two simple reasons why we invest. Although there are probably many more reasons why we invest these two are the central reasons.
Len Penzo has quickly become one of my favorite bloggers this year, earlier this year he revealed his Ten Commandments of Personal Finance.
Million Dollar Journey is well on his path to reach his goal of becoming a millionaire before the age of 35, earlier this year he asked what is important about money to you? Have you ever asked yourself this question? If not I would highly recommend to find out soon.
Oblivious Investor explained why he invests in Vanguard and maybe why you should too.
Canadian Capitalist cautious investors about the recent gold rush and points out why a gold bubble might be forming.
Pay yourself first is a very common recommended strategy, however Digerati Life tells us to save money by paying yourself last.
Everyone would like to become a millionaire one day, but most are not sure how they could achieve this. No need to look further Two Pennies Earned shares a few simple ways you can become a millionaire.
Bible Money Matters reminds us that managing money is not just a mathematical exercise, but also a psychological one.
37% of investment fraud victims are victimized more than once, Before You Invest explains how this is not a coincidence but rather a planned event; Recovery Room Investment Schemes,
Christian Personal Finance lay’s out the ABC’s of personal finance.
Looking for ways to save money? Look no further than The Digerati Life’s 55 Best Ways to Save Money.
Darwin’s Finance explains the important difference between Median and Mean.
Oblivious Investor is not a big fan of Mutual Funds, however he does provide 11 tips for selecting a mutual fund.
Exchange Trade Funds have become very popular of the last little while, ETF Data Base debunks some of the myths surrounding ETFs.
Gen Y Wealth provides an excellent flow chart to help Gen Y members with their investments.
Do you have any interesting articles to share? Feel free to add them in the comments!
