There is a difference between saving for short-term goals and investing for long-term goals. Short-term goals are those things you want to spend money on within the next five years. Long-term goals are those you hope to achieve beyond five years.
One way to save for short-term goals is to pay yourself first. Need a new car in two years? If you get paid twice a month and stow $50 from each paycheck in savings over those two years, you'll have $2,400 for a down payment. Don't have $50 a paycheck to devote to savings? Take a closer look at your bills to see where you can find some bargains. For instance, if you belong to the Automobile Association of America (AAA) and flash your membership card at your local movie rental store, many will give you your third rental for free. Speaking of renting movies, are you constantly getting stuck with late fees? Then consider joining an online DVD service such as Netflix or Blockbuster. You pay a flat fee once a month and can keep DVDs as long as you like without incurring late fees. Plus, all postage is paid by the company.
On a more serious note, if you have one or more prescriptions that you fill on a regular basis, see if your health plan offers a mail order prescription service. At Anthem Blue Cross, for example, you can get a 90-day supply by mail for the cost of a 30-day supply at your neighborhood drug store. If you normally spend $75 in co-pays for a 30-day supply, that saves you $600 a year--or $50 a month.
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