Many, or probably most, people reading Savings Toolbox would like to have extra capital to plow into a savings program to create a safety moat as well as build up their wealth.

What may surprise some of you, is there could very well be a very simple and effective way for you to do just that with just a few adjustments to your lifestyle. What is it? Renegotiating on the services you buy or rent monthly.

It’s no surprise that not just consumers are struggling during these times, but many companies who offer services which aren’t necessary to survive are also struggling, as people put more money into paying down debt and increasing their savings.

With that in mind, many businesses offering you services are concerned over the possibility you may be the next one to stop using them in order to survive. That’s a great advantage to you, and you should definitely try to use that as a point to start negotiations.

This shouldn’t scare you, as we’re not talking about the type of pressurized negotiations you may see at a flea market or pawn shop.

So how you you go about it to best position yourself for a better deal? First of all you’ve got to decide whether you are willing to walk away from the service if you can’t strike a deal with them. If they you on it and you are found to be bluffing, it’ll do nothing to help you at all.

Don’t be only bluffing is the first thing to keep in mind. If you need more money to put away, be willing to go all the way and stop services if you aren’t satisfied with their answer.

The first step is to attempt to keep your current services if you can and do it at a better price. You could call them and say you’re cutting their services because you can’t afford their price, and then just sit there and listen to what they say.

One thing to keep in mind here is there are some unimaginative and poorly trained employees at times, and they aren’t ready to offer alternatives to you. If you find that, be ready to give them a few ideas, saying you would like to keep their service, you just can’t do it at the price they’re currently charging you. Again, this is in relationship to keeping your current services at a discounted price.

If that doesn’t work, and they simply won’t work with you in any way, then you might ask about lower-level services which can do the same for you, but with less of what they currently offer. For example, less minutes on your mobile phone, less channels on cable, etc.

One thing I did a long time about was get rid of my land-line phone. Why pay the extra for absolutely no extra value or use? Every bit of that savings can be applied to building up your wealth or paying down your debt.

A friend of my recently experienced some tough times and asked for a discount on her rent or she would have to move out. She wasn’t bluffing, and the landlord really needed a renter in the home, so she got a $150 discount in order to stay there. Not bad for a couple of minutes’ work.

This will work better for homes that aren’t part of a large conglomerate. In other words, if your landlord owns just a few homes that he rents, he would be more apt to give you a discount in times like these than a large rental company would. It’s definitely worth the effort, as you have a good chance in these times to secure a better deal for yourself and put extra cash into your pocket on a monthly basis.

In the end, it’s better to get rid of whatever you need in order to secure your future, and there are worse things to happen to you than to cancel your cable or high speed Internet connection.

Just think in terms that it is a temporary situation, and once you get things on track again by paying down bills and building up enough capital to take you through at least six months of unemployment with your current financial obligations, at that time you can simply add some of the perks you had before.

The point is you’re probably leaving money on the table if you have full service on most things. There hasn’t been a time like this in decades where asking for a better deal may be answered with a yes.

If not, be prepared to cancel what is needed to give you the extra money you need to build solid, long-term financial success.

Just be sure to have the discipline to pay down your debt or put money into savings when you do cut back on costs, otherwise it’s all being done in vain.

An Add-on CD is a certificate of deposit with a fixed or variable rate where you can continue to make deposits over the term of the CD.

A little later we’ll get into the purpose for investing in an Add-on CD, but for now let’s look at some of the differences in order to understand what you’re investing in.

While there are no basic differences between a fixed or variable CD or an Add-on fixed or variable CD in and of themselves, the obvious difference is the adding of money to the certificate during its term, otherwise it functions as a normal CD with all its usual functions and protections.

The difference you’re looking for is like any other CD, where there are minimum opening deposits, and also in some cases, minimum additional deposits. There are also some Add-on CDs which require a minimum amount on a monthly basis. For example, you may be required to add $50 a month for the duration of the certificate. This isn’t bad if it falls within the parameters of your investment strategy.

As with any CD, you must be aware of the automatic renewal window, which allows only a certain amount of days to close the CD or allow it to renew.

So why bother with a CD like this at all? In our existing economic conditions, cash is the ultimate contrary asset to hold in the world right now, and so is a good time to hold some, as many people in America are starting to do.

To that end, all of us should have a stash of cash socked away for emergencies, possibly even a little higher than the usually suggested three to six months worth in normal economic times in case of unexpected circumstances. If you’re able to, I would even put away as much as nine months to a years’ worth of cash to protect yourself against the poor economy.

With that in mind, why an Add-on CD works so great is it gives you the option of putting away and building up cash in a way that forces some discipline on you. If you attempt to take it out, you’re hit with a stiff penalty, which is good in my estimation, as it keeps you from spending it on whims and not on truly unexpected things as the consequence of hard times.

One other nice thing about an Add-on CD is it allows you have a shorter waiting period for your money as the CD matures. In other words, if you pay some into it every month, that means it’ll be less time you have to wait for your money as it continues to bear interest for you and build up your personal cash reserves.

If you have a safer investment that could provide better and more flexible returns, you could then put your cash in that to continue to build it up without having to wait long periods of time with all your money. So money you put in over the last several months of an Add-on CD is only tied up for that period of time until the CD matures, and then you can decide from there what your next step will be in reference to building up your cash reserves.

The point is an Add-on CD is a great place to build up your cash on a monthly basis without tapping into it like you easily could with a money market fund or money market account. That’s a good discipline to have when it’s imperative to have some cash on hand during these difficult economic times.

We’ve been talking a lot about CDs lately on Savingtoolbox.com, and I’m going to continue on with that theme for awhile, as in low-interest rates time like we’re in, banks usually offer up a bunch of diverse CDs to customers to provide a variety of options to suit individual needs, and also to entice them to park their money using some dangling carrots of higher interest rates and flexibility for those looking for better but safe interest returns.

Some of these CD products are called different names by different banks, and sometimes in different parts of the country, so it can become very confusing to those shopping for banking products. For example, we recently looked at what is called bump-up CDs, which can be used to take advantage of higher interest rates, but the owner has the responsibility to check in with their bank sometime in the duration of owning the CD to tell them they want to bump it up to a higher interest rate.

Now with something called a Step-Rate CD or Step Up CD, it’s a little different in that there are guaranteed interst rate increases which the buyer doesn’t have to be concerned about watching, but automatically kick in a specific intervals of the term of ownership.

For example, a 4-year CD may start off at a 4 percent interest rate for a year, and then jump to 4.5 percent after 24 months, and on up as it matures.

What you want to do with something like that is add up the interest rate offered during the term of the CD and divide them by four, or however many years you have it to get an average interest rate for the overall period you own it. That guides you as to whether it’s a good deal or not.

Many Step-rate CDs will be for less time, but still offer interest rate increases at intervals of seven months and so on, so you can still divide by the number of increases over the length of the CD and get the average interest rate for the period of time you own it.

So the difference between a bump-up CD and a Step-rate or step up CD is you’re guaranteed an interest rate at specific intervals and specific rates while you own it. Bump-up CDs on the other hand, only guarantee that you can bump up the rate sometime during the time you own it. Sometimes it’s more than one time, but with many bump-up CDs you only get one crack at it. You’re still guaranteed a minimum interest rate, but it’s less certain as to how much it’ll increase, as it depends on the market.

Step-rate CDs are for those who want certainty and guaranteed returns they don’t have to think about. Bump-up CDs are for more hands-on people who want the chance to make more on their interest rates by watching the market carefully and timing the interest rate bump for the best possible increase.

If these types of CDs are called something different when you’re checking them out, just remember the differences shown in the above paragraph and you’ll understand what they do no matter what name is applied to them.

Other than a different name, a liquid CD is really not much different than a regular Cd, with the obvious exception of having access to you capital at any time.

You may also ask, if that’s the case, wouldn’t it be the same as a money market account and savings account? The answer would be: absolutely yes – but with an exception we’ll get into in a moment.

So you don’t get confused, a liquid CD is still a CD. You buy it in the same way you would a regular CD, only now you have access to your cash when you want it.

Similar to a regular CD, a liquid CD will also be insured by the FDIC, but your allowed withdrawals will be penalty-free, in contrast to a regular CD.

One thing to keep in mind when looking at investing in a liquid CD is the terms offered by the various institutions. In some cases a bank will cap the amount you can withdraw, so the liquidity offered is limited. In these cases there should be a trade-off of a higher interest rate in comparison to other liquid CDs offered by other banks, otherwise there would be no incentive to buy one.

Other limitiations some banks include are how many withdrawals you can make within a specified time period, or some banks leave the entire withdrawal situation alone and allow you to withdraw however much you want when you want. Again, if there are restrictions, look for higher interest rates or don’t bother with them, as there’s no reason in the world to get a limited product that is offered by someone else with the same or higher interest rates with no limitations. If there’s no added incentive to buy a CD with limits on withdrawals, simply pass on it and buy one that allows unlimited withdrawals with similar interest rates.

Now the interesting thing about a liquid CD, is it might be marketed by a bank as a great alternative to a regular CD, and it is as far as liquidity goes. But the problem is there are already savings products available like a money market account and a regular savings account where you have liquidity already.

So why would you even want to consider a liquid CD if there’s no real obvious advantage to buying one? The answer is it has to do with interest rates.

If we’re in a time of interest rates falling, then acquiring a liquid CD instead of using a savings account or money market account makes sense, as it will protect you from lowered returns during that period, while having immediate access to your money.

But if interest rates are bottomed out, like they are as of this writing, a liquid CD really offers no value at all, and performs exactly the same a a money market or savings account. It won’t hurt you, but it won’t help you either. The only thing it could do is lock you in to lower interest rates, keeping you from enjoying better returns.

Consequently, in a low interest rate environment like we are in today, there is no value in a liquid CD, and if you think interest rates will rise sometime soon, you could miss out if you’re locked into a liquid CD rate.

On the other hand, if interest rates start to move up and look like they’ll start declining again, a liquid CD makes sense, and it is the only real time it adds any value to your savings strategy.

WTDirect is among the top five percent of U.S. banks for savings rates, and they even give you a chance to test drive the account with no risk to yourself.

At the time of this writing, opening a savings account with WTDirect gives you a return of 1.66 APY for the first two months no matter how much you put in the account to begin with. Once that two-month period is over, you then must maintain a minimum of $10,000 in the account to get the highest savings rate.

That’s a nice feature because a number of banks bring down the interest rate in a savings account as the account gets bigger.

There is also no restrictions on needing have a checking account with the company in order to have a savings account with a higher interest rate. Another nice feature is there is no minimum amount needed to open or maintain an account, and no fees regardless of how much money you have in it.

Also included is the current FDIC guarantee of up to $250,000 for your savings. As with all U.S. FDIC-guaranteed accounts, that will revert back to $100,000 as of January 1, 2014.

What’s nice about this for savers, depending on how you like to do your banking business, is this is one of those built-in savings accounts which can work good for those not concerned over moving their money in and out of an account. For two months you can get a good return with no minimum amount in the account, and no fees.

And if you like your experience, and have $10,000 available, you can always just keep your money in the WTDirect savings account if you choose to in order to get the higher interest rate.

You are also allowed to transfer any of your funds between your WTDirect savings account and other financial institutions you use; something not all banks allow.

Since most lenders of home loans require at least 20% of the purchase price down before they will consider financing you at a decent rate, it will serve you well to start saving as soon as you know a new home is in your future. Saving has always been a issue for Americans, especially since a lot of the population is living paycheck  to paycheck and just barely getting by on what they make each month. This leaves little room for even a small savings, let alone for a down payment on a home.

A Savings Plan
But, as with much of personal finance, where there is a will there is a way and a bit of planning is all it takes to get started on achieving one large part of the American dream. The first step in your savings plan is deciding how much to save. If you have prequalified for a home loan, you should have a good estimate of what the cost of the home you can afford will be. The 20% rule is generally what is required  by lenders for financing those individuals who have good but not excellent credit scores. Without the 20% down, most lenders will require you to purchase Private Mortgage Insurance (PMI) that protects the lender should you default on your home loan. PMI adds costs to your overall mortgage so it is financially wise to save enough for a down payment and skip the PMI altogether.

Down Payment Math
If you are looking at a home that costs $100,000, you would need to save $20,000 towards a down payment. While $20k may seem like an impossible goal to reach in a reasonable period of time, it will help you to save money in the long-term and have instant equity in your new home. Within your budget you can estimate how much money you can save each week. You may have to cut out luxuries such as cable, internet, or cell phone packages in order to save more money each month. The more cash you can save in the shortest period of time without negatively affecting your other financial obligations, the closer you will be to your dream of owning a home.

Cut Your Budget
If you are unwilling to do more drastic measures as such, it can be a very long savings period to reach your goal. However, there may be additional resource which you can tap into to get the money you need faster. For instance, some retirement accounts  and IRA’s allow you to borrow money from yourself to use for a home purchase. You can also check with the Veteran’s Administration if you are a qualified veteran or the state housing authority to check out programs that help first-time homeowners or those living on low-to-moderate income levels.

Stash Your Cash Wisely
To make savings even more effective, consider stashing your cash into a number of places that will prove profitable, depending on the savings time you have planned out. Instead of allowing your savings to sit and earn a small interest rate at your local bank, consider opening an online savings account that earns more interest or a money market account. By putting your money in an account that earns 5% interest instead of one earning less than 1%, you can make your savings work harder and more efficiently for you and at the same time decrease the time it takes to reach your ultimate savings goal.

As many people have learned during these recession time, saving real cash is the best way to make a purchase and the safest way to stay out of debt. While many people understand that saving cash is for the best, many still have great difficulty find money to put away when they need a new car, have to pay for college, or even saving for retirement.

In the 1970’s, Americans managed to save more than 10% of their disposable income compared to the 0.4% saved in 2005. In 2009, we’ve kicked it up a bit and saved a decent 5.7 % of our disposable income. It seems everyone is having difficulty saving for a rainy day. Since many are already on a strict budget with little to nothing left over, it seems that putting such little money aside each week is pointless. Plus there is always the possibility an unexpected emergency will arise. But experts suggest that you in fact go back to your budget and get rid of what it is you really don’t need. The only other alternative is to make more money.

The rule of thumb for your income is as follows:
50% – used for your necessities
30% – used for your wants
20% – used for your debts and savings accounts

Getting money to save will take discipline and a desire to succeed at saving money. Different savings goals need different types of attention. Here is how you can start:

Emergency Fund
Financial experts agree that having an emergency backup account that has at least 3-6 months worth of living expenses in an account is the place to start. Before saving for any other goal, you need the security of an emergency account that will help the family get by in the event of an emergency, such as medical problems or a job loss or other unexpected but true emergencies.

Short-Term Savings Goals
Short term savings goals can be established for things such a family vacations, new furniture, or a new car. You need to figure out how much money you need to save each week by dividing the purchase price into the number of weeks you have to save.. Say you are going on a family vacation one year from now that costs a total of $3000. You can determine the amount you need to save each week will be around $58. That money can be put into a interest-earning account and regular contributions need to be made in order to stay on track. You may also look into CD’s and money markets to increase your earning potential over time as you save.

Mid-Term Savings Goals
Mid-Term savings goals are similar to short-term savings but require the individual to save for a longer period of time. These savings will go towards college expenses, wedding preparations, a downpayment on a home. Depending on what it is you are specifically saving for, you will need to explore your options. For instance, a 529 savings plan would b a good investment for the college tuition portion of your mid-term goals. Safe avenues for savings such as CD’s, money markets, and savings accounts are all good places to stash your cash for when you need it. Purchasing stocks to fund mid-term goals ma not be a great way to increase your capital.

Long-Term Savings Goals
Long-term savings generally involve retirement funds. Experts agree that in order to reach a comfortable retirement is to invest a certain percentage amount into stocks in order to keep the pace with inflation. Recently tumbles in the stock market have shaken some and those individuals may prefer to keep their retirement savings in the traditional 401(k) and similar plans. You may consider checking out an IRA if your employer does not offer you a retirement savings account. A goal of 10% of your gross income is recommended at the target number for your retirement savings plan.