How to Easily Save Money
As a financial coach I find too many people have a lack of savings to bring financial stability to their lives.
We are all great at spending money. How about saving a little? Corporations through media advertising have conditioned us to spend all our hard earned money on their products. Most of our thoughts throughout the day are consumed with ideas of what we can buy with our next paycheck.
I would like to spend this time talking about how to save money to help you improve your financial situation. Before we begin let me say this: First, you want to look at saving money as a good thing instead of feeling like something you dread. Second, you want to make saving money a top priority in your life. And finally you want to know that saving money will create for you the financial leverage you are looking for.
Here are a few tips on how to save money:
1. Pay yourself first
The minimum goal should be to save 10% of your gross salary each month. Develop the mindset and routine to pay yourself first, instead of losing a large chunk of it right away on instant gratifications or indulgences. Your first distribution of your paycheck goes towards savings before anything else. A good place to start is your retirement account, your employer’s 401k, or by having a Roth IRA with a discount broker. Once you establish this routine it will be much easier to save more as you move forward.
2. Just say no to new debt
You don’t want to take on additional debt as you develop your routine of saving money. That new boat, RV, or the 80 inch big screen television with the new entertainment system is not in the cards when you want to save money. Living within your means is important at this stage of the juncture of getting on the path to saving money.
3. Set targets and time frames
You want to set reasonable goals and time frames to reach your savings goals. Having a goal of saving a million dollars is not the best strategy, it is too big at this point. Start with small goals; saving your first $1,000 in an emergency fund is a good starting point. Once you hit that target you can establish bigger targets, like saving one month of living expenses in your emergency fund until you reach the ultimate goal of 7 months of expenses.
4. Learn about investing
One of the reasons people don’t save money is that they have no idea how the financial markets work. Plus, there is a negative stigma with Wall Street these days. Ideas of greed and losing your money are a common theme in the investment world. If you have no knowledge or confidence in what investments can do for you, you are most likely to do nothing. It is time to learn about how the financial markets work. Once you start learning how investments work, you will be glad you made the choice of saving money vs. spending it on something you don’t need. There are all kinds of television shows, internet sites, and books on investments. So expand your horizons and start learning about investing.
By taking these steps you are setting up a solid foundation for financial success. It may feel like nothing is happening in the beginning because we all want instant gratification. Don’t feel discouraged. All those little things you are doing will make the biggest difference down the road. Stay the course and you will find that saving money becomes a good thing.