Making Saving A Priority

If you are looking for a way to stop living paycheck to paycheck and actually make progress with your finances, then this post is for you. You don’t need to track every penny you spend or even keep detailed spreadsheets about your finances. All you need to do is one thing: make saving a priority. That’s it. But while making saving money a priority sounds easy, so many have a hard time with this. Before we get into the difficulties surrounding saving money, let’s first look at the benefits of making savings a priority.

Savings

Why Save First?

For most people, they handle their money backwards ñ they spend first and save whatever is left over. In most cases, come the end of the month, there is nothing left, so no money is saved. This is why so many have so little saved for retirement.

If this describes you, you need to flip this around. You need to save first and then spend second. Once you save your money first, you are free to spend every last cent in your checking account.

For me, I make it a point to put money from each paycheck into my 401k at work. When I started out, I was saving $20 from each paycheck. As time went on, these $20 bi-monthly contributions began to compound and grow faster and faster. I now have a good amount of money saved for my retirement. The concept I used here is the same one I am telling you now: save first!

The money I contributed into my 401k came out of my paycheck before I even got it. I never noticed a smaller paycheck since it the amount I received was always reduced by my 401k contribution.

I then took this concept one step further. Since I get paid bi-monthly, I set up automatic transfers to my savings accounts. I have transfers going to my emergency savings fund, my insurance fund, investing fund, etc. When I get paid, the money is transferred from my checking account to my saving accounts automatically. When I log into my checking account at the end of the day, the amount I see still sitting in my checking account is the money I have to spend. It isn’t a lot of money, but I know I can spend it all if I wanted to without concern because I already saved some money.

This is how I get ahead. There are plenty of times when my checking account balance drops close to zero in a given month. But I am still making progress because I already saved money. But as I said earlier, while making saving money a priority is easy in concept, it can be hard to continually make progress.

The Difficulty With Saving Money

The reason why so many people have trouble with making progress with their finances is because they fall victim to instant gratification. They see a hot new item and have to buy it. We’ve blurred the lines between wants and needs. Better yet, advertisers have done an excellent job of making wants into needs.

But we as consumers have to accept the fact that we allow this to happen. In order to consistently make progress with our money, we need to overcome the need for instant gratification. Here are a few steps to help you out:

Learn to Delay: If you see something you “need” or have to have, stop for a minute and think. Ask yourself if you really need it. Most times, the answer will be no.

Get Assistance: I got myself into a good bit of credit card debt after college. What helped me was taking a picture of all of the stuff I bought and carrying it with me in my wallet. Then when I felt the urge to buy something, I pulled out the picture and looked at it. It reminded me that what I was about to buy would end up like the things in the picture ñ unused wastes of money.

Find A Hobby: Most of us spend when we are bored or depressed. You need to recognize this and avoid shopping when you are bored or depressed. Find a new hobby or hang out with your friends. Do anything but shop. I did a lot of shopping when I was bored and that got me into my credit card debt. Once I stopped going to the mall, I stopped spending money. Funny how that works. Of course, now with the internet, you can’t just surf the net when you are bored as it is too easy to buy things online as well.

Final Thoughts

The sooner you can learn to save first and spend second, the sooner you will begin to experience a marked improvement with your finances. Like I said, there are pitfalls for you to watch out for, but if you can stay determined and keep saving money, you will stop living paycheck to paycheck and will be able to get ahead in life. I am proof that it is possible.

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