Back in 1987, when the stock market crashed and DH and I had to restart our lives (yawn, I know it's getting boring) I found a unique way to save our money: U.S. Savings Bonds. Money was extremely tight to come by but I managed to save just $5 dollars a week. I would put the cash inside an envelope and keep it in my underwear drawer. As soon as I got $25 together, I bought a $50 savings bond. The purchase price is always half of the maturity. I bought them at our local bank and when I accumulated enough of them, I kept them in a safe deposit box at the bank ($12 a year).
Savings bonds are exempt from federal and state tax and earn interest based on economic conditions. You don't pay any taxes on the interest until you sell them. Maturity is usually 30 years but they must be held for at least 6 months before you can sell them at all. For more information,
click on this link.
As I reigned in my expenses, I was able to start saving $25 a week and therefore started buying a $50 bond per week. I set up a weekly buying program with my bank and they automatically bought the bond for me and mailed it to my home. As our budget improved I started buying $100 bonds per week (for $50). Whenever my husband would get overtime pay, I would take the whole amount and buy U.S. Bonds. When I had accumulated $1500 net in U.S. Bonds, I sold them and we bought our first used car, for cash. It was a great, old station wagon that the kids and I loved!
After a year and a half, DH and I had managed to save $12,000 net worth in U.S. Savings bonds. We bought our 2nd, used, but newer car (another fantastic station wagon) and started taking long, weekend family vacations. We had a blast. But the best part was, we had no debt or car loans.
We continued to save our money and buy bonds. We were able to afford new appliances or whatever we needed. Eventually, we saved up enough money to open IRA's and started funding our own retirement plans and college funds for our children.
It all started with just five little dollar bills.
If we can do it, so can you.
Stop spending. Reign in your expenses. Start saving. I recommend U.S. Savings bonds. You can buy them direct from the government or from your local, friendly neighborhood bank.
Click on this link to find out how.
Good luck!
I'll be posting more "How To Restart Your Life After An Economic Downturn" often. It's the best advice I know to tell people. It's tales from my own life and chronicles our own journey back from both the Stock Market Crash of 1987 and the Dot Com Crash of 2001.
