Are You Really Saving Your Money? These Bloggers Are

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On Black Friday, I mentally high-fived myself when I used cash-back rewards money to buy several pieces of clothing I needed for my winter wardrobe. I thought to myself, "I just saved $100." But really, I didn't. While $100 didn't leave my checking account, it didn't go into my savings account, either.

We all routinely brag about a way we saved money. You'll hear people wax poetic about cutting the cord and no longer paying for cable, or couponing to save a few bucks on groceries, or using credit card bonuses to pay for a vacation. But here's the big question: are they really saving?

While we claim to be saving, is that extra $40 a month from cutting cable actually going into savings or just being reallocated to justify eating out or going to the movies?

A Penny Really Saved

Abigail Perry, founder of I Pick Up Pennies, realized her mistaken assumption about saving and decided to make a simple change.

Whenever Perry saves money, she doesn't just pat herself on the back, she actually moves it to savings. She coined the term "saved savings" and opened an account of the same name where she deposits any money she keeps in her wallet from trimming expenses or using coupons.

She takes it a step further. "I use cash-back shopping and put any payments in the account," she said. "I use rewards programs to get gift cards. When I use those gift cards to pay for things, I put in the money I would have spent."

$1,994 and Counting

Perry started her saved savings mentality just over a year ago and has put away $1,994.

For the regular saved expenses, like a reduced monthly bill by cutting cable, Perry suggests automating the savings. These savings can be used to help you reach actionable goals.

"Personally, we use it to plump up savings," she said. "Other people might want to fund a big vacation or save for their dream car. On a less frivolous front, it would be a great way to build up an emergency fund or a down payment for a house."

She's quick to point out it can help those in debt by adding an unexpected boost to their repayment strategies. And for those who struggle to make ends meet each month, Perry admits they're often the most skilled savers, although the money is immediately allocated to another expense.

Or Challenge Each Bill

J. Money, founder of Budgets are Sexy, created his own version of saved savings with a "challenge everything" series.

The blogger decided to challenge every bill his family pays each month to see if they could reduce their costs without sacrificing quality of life.

"I've decided to hit the bills that have forever been the norm that I've just assumed were off limits," he explained. Those "off limits" items included iPhones, car insurance and TV bills.

Two months in and he's socked $406.60 into a savings account he created. But the challenge hasn't come without a struggle. His hardest money saver was switching his cell phone carrier to Republic Wireless.

You Can't Phone It In

"Not that the switch wasn't smart in the least -- we're literally saving $100 every month by switching to Republic Wireless," says J. Money. "But just that it's more of a hassle to swap phones and platforms than, say, calling your cable company for 10 minutes and negotiating a lower cost."

He also moved from an iPhone to an Android in the switch, which he admits took some getting used to, until he realized the Android saved him $1,200 a year.

%VIRTUAL-pullquote-He found his new strategy spawned other thrifty habits. %After two months, he hasn't decided exactly what the challenge savings will be used for but thinks an contribution to his individual retirement account may be in his future.

He found his new strategy spawned other thrifty habits. "I've started forming some other new habits as well, such as listing one new item a week on Craigslist and diverting any unexpected income directly towards this same pot of savings."

When he is tempted to spend some of his hard-earned (or saved) cash, J. Money uses a trick to deter himself by playing a game popular at pre-teen sleepovers: would you rather, except his version ends in early retirement instead of a pillow fight.

"I can't tell you how much of an impact it's been anytime I've asked myself if I'd rather have X vs. early retirement," he said. "Nine times out of 10 I pick freedom all the way, which helps put things in much better perspective."
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