No Spend Days and Gasoline Hedging

I’m finally updating on Ramit’s 30 Days to Save $1,000 challenge.  It’s been busy for me, but I really want to keep my goal and updating on the site keeps me focused.

The tip on hedging fuel expenses is something I wasn’t crazy about. l’ll explain why later. I did appreciate tip #7 on having a no spend day. I’m happy with how the challenge is coming along. I even managed to make some money (Tip # 3: Sell on Ebay).

Gasoline Hedging

Ramit’s breaks down how he creates and uses the gas hedge funds. It’s a clever way to prevent yourself from spending money carelessly. He explains how you can be smart with your ‘found money’:

When gas prices were at their highest in San Francisco, I was paying about $4.60/gallon, which was costing me about $60/week. But now, with a combination of lower gas prices and working at home once a week, I’m saving about $15/week off the peak.

Now, you can create an automatic transfer of the money you’re saving and put it in a “fuel hedge” account to protect you when prices go higher.

1. Set up a high-interest ING savings account
2. Open a sub-account
3. Automate deposits into sub account
4. Check every couple of months to see how it is working for you.

I use sub-accounts with ING Direct and I think they’re a wonderful tool. I just prefer to put my little snowflakes (savings) away into either one of three sub-accounts:

• Savings
• Debt Reduction
• VW Repair Fund

When gasoline prices increase I adjust the budget accordingly. I also become a bit more aggressive with my conservation skills. I realize it’s simply an issue of reallocating funds if I just save it, whatever the account name may be.

If I use it for debt reduction, I see that as a long term move. With my car loan being at 13.75%, I get a great ‘return’ on my money. It will also puts a few hundred dollars back into play for my budget once my car loan is done.

‘No Spending’ Day

Creating a “No Spending” day once a week is something that I have followed for a bit. It started as a necessity as I was a broke college student for some time and wanted to keep my meager checking account in the black until my next paycheck. I still try to do this, as I’m working on reducing my debt and building some savings.

Having a no spend day also gets me into the mode of controlling my purchasing impulses. I ask myself why I feel like I have to spend money in this instance. Am I buying food because I’m really hungry or just because my friends are taking big lunches?

I surprised myself because even when I had a good breakfast at home, I wanted to spend money as a way to chat with my friends during break. I try to bring a snack with me and may either get a free water or just buy a drink. (This saves me cost of  meal that would only be half-eaten.) It’s better for my wallet and waistline.

30 Days to Save $1,000 Challenge Progress

For those keeping track of my progress on the challenge:

• Tip#1 $45/month
• Tip#2 $10/month
• Tip#3 has brought me $15 for two books I haven’t used.
• Tip#4: $10 for an ING Referral bonus
• Tip#5: $7.25/month
• Tip#6: $235/month once the car loan is paid off
• Tip#7: $80/month

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