K-State Research and Extension News
February 01, 2010
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To Build Financial Security, Be Consistent, Creative

MANHATTAN, Kan. -- Saving money can be difficult to do, yet setting aside even a small amount from each paycheck is a key to building an emergency fund and saving for short- and long-term goals.

"Pay yourself first," said Carol Young, Kansas State University Research and Extension financial management specialist.

Saying that isn't the same as saying "don't pay your bills," Young said. "Setting aside a fixed amount of money from each paycheck does, however, require self-discipline." 

"And, while $10 or $20 dollars may not seem like much, if paid every two weeks (26 paychecks a year), a deposit of $10 from each paycheck will yield a savings of $260 plus interest annually, and a deposit of $20 from each of 26 paychecks will yield a savings of $520 plus interest annually."

To simplify saving, Young suggested setting up an automatic transfer from a checking to a savings account each payday. 

Such transfers are usually a simple option from accounts that provide online access, Young said.

Another option would be to check with a worksite human resources department to see if direct-deposit options from a paycheck are available. 

If these options aren’t available, the financial management specialist urged diligence in making a savings deposit each payday before starting to pay bills.

"Setting up direct deposits helps to build savings automatically," said Young, who encouraged everyone to look for creative ways to save.  

Small amounts add up quickly, she said.  

Depositing coupon savings on grocery and other items in a piggy bank or jar each week is an example. Check the amount saved at the end of the month, and again at the end of three or six months.   

"Deposit savings regularly, as saving as little as $4 to $6 a week could yield a $200 to $300 savings annually," she said.

Changes in lifestyle also can yield substantial savings, said Young, who shared the example of one central Kansas woman who, after deciding to stop smoking, deposited the cost of a carton of cigarettes in a savings account she'd opened specifically for that purpose each Friday afternoon.

At the end of her first smoke-free year, she and her husband used the savings to fund a trip to New England to see the fall foliage.

Forgoing a $1 purchase from the vending machine each day during a five-day work week for 50 weeks might seem trivial, yet doing so can yield a savings of $250 annually. Packing a lunch, rather than eating out, carrying fruit or another snack from home, and buying a re-usable water bottle, rather than buying bottled water, all can yield significant savings annually.

Linda Beech, a K-State Research and Extension family and consumer sciences agent in Finney County, Kan. is a working mom with a family of four. She offered a cost comparison for a medium cheese pizza:

In Garden City, Kan., the cost to order a pizza is $10.99 plus tax and a $2 delivery charge; waiting time is 30 minutes.

The cost to buy a frozen, upscale pizza with a rising crust is $6.69 plus tax; prep time is 27 minutes.

Buying a pizza kit that includes crust mix, sauce and cheese is $2.99 plus tax, and requires about 15 minutes to assemble and 20-30 minutes to bake.

Walking further down the grocery aisle, away from more prepared products and convenience foods, Beech encourages consumers to consider creating their own pizza kit with a crust mix priced at 42 cents; a can of Italian-style tomato sauce priced at 32 cents, and $1 worth of shredded mozzarella cheese, for a total of $1.75 plus tax. Preparing the pizza requires about 15 minutes prior to 20-30 minutes needed for baking.

Making a pizza together can provide a family activity, an opportunity to teach children basic cooking and food safety skills and offer a significant savings, said Beech, who noted that, if pizza is on the menu once a week, costs can add up. She came up with these comparisons:

* If a family has a pizza delivered once a week for 52 weeks, the annual cost is $675.48 plus tax.


* If buying a frozen, upscale pizza a week, the annual cost is $347.88 plus tax.

* If buying a pizza kit each week, the annual cost is $155.48 plus tax.

* If assembling a pizza kit each week, the cost of preparing a pizza once a week for 52 weeks is $91, plus tax.

For more information about managing money successfully, including basic budgeting, stretching your paycheck, and saving on everyday items is available at county and district K-State Research and Extension offices and online: www.ksre.ksu.edu/financialmanagement/ and at www.kansassaves.org.


K-State Research and Extension is a short name for the Kansas State University Agricultural Experiment Station and Cooperative Extension Service, a program designed to generate and distribute useful knowledge for the well-being of Kansans. Supported by county, state, federal and private funds, the program has county Extension offices, experiment fields, area Extension offices and regional research centers statewide. Its headquarters is on the K-State campus, Manhattan.

Story by: Nancy Peterson
K-State Research & Extension News

Carol Young is at cyoung@ksu.edu; Linda Beech is at lbeech@ksu.edu or 620-272-3670