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Understanding Your Relationship with Money: 03/01/2017

Three ways to save money

We can change the way we feel about earning, spending, saving, investing, and tithing if we stop viewing money as our primary reason for “being here.” What is your primary reason for being here? When that reason leads, everything else seems to follow. Why? Because you’re happier when you have a fulfilling reason for being here, and when you’re happier, responding to your needs isn’t such a chore.

Since money is a core survival issue, we need a certain amount of it to afford a level of comfort that keeps us happy. This amount varies for each person depending on lifestyle. Another component of financial comfort is saving for the future. Saving gives peace of mind for future comfort.

I’ve discovered that most people need an incentive to save for future comforts or necessities. Incentives raise the bar for generating the amount of income needed not only to pay the monthly bills but also to afford a consistent amount going to savings.

Some common incentives for saving money include emergency funds, taxes, car repairs or a new car purchase, vacations, education, medical needs, and retirement, not necessarily in that order. Having enough money accumulating consistently toward these categories will result in future comfort.

Here are some tips on how saving in one category can automatically generate savings in another, doubling your efforts:

Open a Health Savings Account (HSA)

See a qualified insurance agent for eligibility requirements. If you’re enrolled in a High Deductible Health Plan (HDHP) you could’ve contributed up to $3,350 per individual and $4,350 if you’re over 55 ($1,000 more called a “catch up” amount) to an HSA for 2016. For 2017, you can contribute up to $3,400, and $4,400 if you’re over 55. This money can be used for qualified medical expenses while reaching your deductible amount. You can also use this money to pay for qualified medical expenses that may not be covered by your health insurance carrier; e.g., chiropractic, eye exams, or acupuncture. It must be a legitimate medical expense, not cosmetic. Always check with your HSA provider.

The amount contributed to an HSA can be deducted from your gross income on your tax return, which will reduce the taxes you owe the IRS. Your savings is going to you instead of the government. You’ve now saved for your future comfort while reducing your tax liability. Eligibility to contribute to an HSA ends at age 65.

Contribute to an Individual Retirement Account (IRA)

Ask your accountant how much you can contribute per year, as this is determined by income and filing status. Similar to an HSA, contributing to an IRA is also deducted from your gross income on your tax return, which, again, will reduce your IRS tax liability.

Reduce expenses

Another way to save more money is to reduce expenses going out each month. A big one for most people is health insurance. Currently, Covered California is the health insurance marketplace in the state of California. Because of the Patient Protection and Affordable Care Act (ACA), the exchange enables individuals and small businesses to purchase health insurance at federally subsidized rates. This is worth looking into if your “adjusted gross income” on your tax form 1040, line 37, is less than $64,000, if you’re married filing jointly (see your tax advisor for details on your filing status). The next open-enrollment period will begin in the fall of 2017.

If you’re considering Covered California health insurance, there is an extensive application to be filled out to establish eligibility for this government subsidy, so I recommend seeing a qualified insurance agent.

Another consideration for reducing monthly expenses so you can contribute to savings is paying attention to groceries and meals out. These two categories go unnoticed by most people. If this is where you’re overspending, it’s not easy to change these fun, nurturing habits. If you charge these expenses with a credit card, the costs seem “invisible” until your statement comes.

This is where a spending plan comes in; creating a Cash Flow Statement listing ALL income and expenses for the month. This is necessary and often a lifesaver. It will reveal your unconscious patterns and behaviors around money and what you value most. It’s tangible and doesn’t lie. It will inform you why you haven’t been able to save, showing the details of your spending or under-earning, plain and simple. This level of financial awareness can be a game-changer, creating the incentive you need to save toward areas that you love and that bring you more comfort. Taking the time and energy to make some simple changes while asking for help makes a huge difference.
Are you ready?

To learn more about your relationship with money, visit and take the complimentary “Money Type Quiz.” Only you will see the results. Or contact me at

Donna Colfer has worked in financial management since 1987. As a Financial Counselor and a Certified Money Coach, she blends her financial expertise with spiritual counseling in her private practice in Sonoma. A Valley resident since 1981, Donna and her husband, Randy, reside in Kenwood.

© 2020 Donna Colfer


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