Saving money can often seem like a daunting goal. Since much of the adult population lives on precisely what they earn or even on a constant stream of borrowing, saving may seem amazingly complicated and tough. But if you take the following steps, you can save with relative ease and regularity.
1. Make it Automated
Image via Flickr by zigazou76
Automating your finances takes your mental energy out of the picture. Now that banks can pay your bills straight out of your account without you having to manage the process on a regular basis, this process is easier than ever before. You can even set up savings and brokerage accounts that your bank pays as if they were bills, slowly but certainly stacking up large sums of money without even trying.
2. Earn More Money
Earning more money is a much easier way to save than trying to scrimp or give up things. Maybe you can start a side business doing something you’ve been curious about or negotiate a higher salary at work. You might even try mowing lawns, walking dogs, or doing other useful work for other people. At any rate, if you can earn more than you spend, you can more easily get ahead and not have to make painful decisions about where to slash your spending.
3. Determine Your Basic Needs
How much money do you really need each month? How much do you really need each year? How much do you need to get by?
In many cases, thinking about these sums of money rationally can help you put everything in perspective. Really take a look at the expenses you can’t get away from – utilities, home and car payments, student loans, whatever you probably can’t trim away. Once you know what you have to spend, you can stop feeling like you “never have enough” and focus on where you want to spend the rest.
4. Figure Out What You Really Care About
What are some of the non-critical areas of life where you absolutely have no problem spending? Are you in love with taking that awesome yearly vacation? If so, you can save for it and then spend lavishly with neither guilt nor financial hardship. But do you need name brand everything, new appliances, or a new car every few years? In many cases, you may find that you can cut back without much care about what you’re “missing out” on.
5. Save Where You Can
Sometimes you can save a ton of money in places you never would ‘ve considered. For example, how much are you paying for things like insurance? In many cases, a homeowners insurance calculator can help you find places where you’re spending more money than you really need to. Once you know what you actually need and are sure a given policy will provide this, paying extra is just a silly waste of money.
Saving money is pretty easy. You just have to make it systemic and cut out the unimportant things.
Chris Hodge became a homeowner and real estate investor while grossing $17,000 a year. It was very hard to do this, and expanding his income resulted in a much faster track. Chris believes that there is no excuse for people to not build wealth, and would talk your ear off about ways to do so.