Question: I need the best tips on saving money. What are the basics that all people should know?
Answer: Everyone knows that saving money is important, but no matter how many times we hear it, for some reason we continue to put it off. Great advice only works if you implement it.
Money advice does little to improve your situation if you don’t take action. Saving money can be difficult, but it’s not impossible. There are a few basic tricks that you can use to help yourself save money.
"Running into debt isn't so bad.
It's running into creditors that hurts.”
- Unknown |
Why don’t more people save money? Most people have a hard time saving because it takes self-discipline and restraint. In order to put money into a savings account, you have to deny yourself the fun of spending it now.
To spend or not to spend, can be a highly emotional choice that can leave you feeling either depressed or deprived. The desire to have something now and the need to save for later will often clash, causing inner conflict.
However, if you are ready to make a change to start building wealth for your future, then here are two tips on saving money that will help you overcome this emotional tug-of-war. One strategy is emotional, the second is logical.
EMOTIONAL: You can fight your desire to spend with other emotions like anger. Get mad at the marketing machine that is trying to trick you into sacrificing your future for a new “toy” that you really don’t need.
Get competitive by setting goals for saving and awarding yourself when you achieve each threshold. Think of saving money as winning a game against the advertisers that spend millions to influence your buying decisions.
Celebrate by letting yourself feel a little pride of accomplishment when your savings account reaches a certain level. Leveraging these emotions to fight your desire to spend will help you overcome the urge spend without feeling deprived.
LOGICAL: Another set of tips on saving money uses logic instead of emotion. Budgeting so that your earnings exceed your spending is a logical way to save. Yes, this tip is fairly obvious, but it’s worth a quick reminder.
Another logical trick you can use is to make your saving automatic. Decide how much you want to save each month and have it automatically deducted from your paycheck, like into a 401k account.
You can also make arrangements with your bank for a monthly, or even weekly, transfer of funds from checking into savings. If you set up these deductions to occur on payday or have them taken straight out of your check, you’ll hardly notice the difference. This allows you to focus solely on your discretionary money after you have already saved the desired amount. It won’t be long before you’ll see the size of your savings balance increased significantly using this approach.
Without a doubt, just a few quick tips on saving money can get you started on the right financial path.
To stay on that path takes some discipline and mental focus, but it is well worth the effort. Learn to combine both emotional and logical methods for combating the urge to spend wastefully and you’ll be able to successfully build your savings account to the level you need to secure your financial future.
"There is no comparison between that which is lost by not succeeding,
and that which is lost by not trying."
- Francis Bacon |
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Debt is NOT your friend. It's not a wonderful "tool" for building wealth. That's a myth.
