Ever given any thought to how to save money?
Is it an automatic thing for you or a non-existent thing?
Do you hang with people that know how to save money or just the opposite?
It’s okay, you can tell me–no judgment here!
I learned how to save money when I was sixteen years old. Why?…my circumstances warranted it.
This turned out to be a good thing in my life.
And here is why:
Knowing how to save money allowed me to purchase my very first car when I was 17 years old.
Having savings allowed me to help a good friend of mine when they really needed it and had no other choice but to ask me. I was grateful that I could help.
Knowing how to save money allowed me to not only buy a home for myself but I also bought a home for my parents.
Savings allowed me to take advantage of many opportunities that I would not have been able to if I did not have any savings.
My emergency savings gives me peace of mind. And I absolutely looooovvvveeee me some peace of mind!
I can go on and on and on here, but you get the picture.
So, how can you save money?
AUTOMATION. I know you have already heard it. Everyone is saying it. And that’s because it’s true. Automation is the absolute best way to save money! Period. And I’ll prove it to you.
As you may already know, I am a veteran. My previous career was in the US military. And in the military, you are offered a chance to participate in the Thrift Savings Plan or TSP. So I participated. I started sometime after August 2001, I was not consistent with my contributions, and I am not sure when I stopped contributing.
But I do know that I contributed 10% of my base pay intermittently over 11 years. Guess how much it is worth now? Upwards of $50,000! Now I do not know if that is a large or small amount to you, but it proves my point about automation.
I never had to think about whether I was putting that money away or not, it was just automatically being deducted from my paycheck before I even saw it. Therefore, it was consistently growing and I was consistently saving without any effort.
To me, that proves that automation is the number one way to save money and that it works.
SET YOUR FINANCIAL GOALS. Setting your actual financial goals on paper is a great way to save money. When you set your financial goals, it gives you something to strive toward.
Let’s say for instance that one of your financial goals is to purchase a 3-bedroom, 2-bath, 2-car garage starter home for $175,000 in two years. You’ll need to save a 20% down payment or $35,000.
This goal is specific, measurable, attainable, relevant, and time-limited and therefore, more easy to strive toward. Having this specific goal will make you see that in order to reach it, you must figure out a way to save the money.
You have to come up with $35,000 for a new home, so this should stop you from unnecessarily spending money and automatically show you how to save the money. Because you can not buy a new (and unneeded) outfit for Saturday night if you need to save the money for your financial goal. Or you can’t attend a conference in another state (just because you want to) if you are focusing on your financial goal.
Having a s.m.a.r.t financial goal is another awesome and proven way to learn how to save money!
PUT FIRST (FINANCIAL) THINGS FIRST. Nothing bothers me more than to see people taking money that is and should be earmarked for actual needs and spending it on frivolous wants.
I understand what it feels like to want something that you can’t afford. But I also know what it feels like to have your electricity or water turned off for non-payment. So I’d much rather pay my bills than to spend that money on a vacation or a pair of shoes that I feel like I just can’t do without.
When you put first financial things first, you do the right thing with your money. You save the electricity bill money for the electricity bill, you spend the rent money on the rent, and you put the emergency fund money in the emergency fund. What you don’t do is use designated funds for something else!
Putting first financial things first means that you budget out all of your money and if there isn’t a dime left after you pay what needs to be paid, you are okay with that. You sleep well at night because there is food in the refrigerator, gas in the car, and the rent is paid.
I mean, really, who cares about a pair of new shoes when you don’t even have enough gas to drive to the soiree this Friday night? Or how can you really enjoy that vacation that was bought with the rent money if you are worried about being evicted?
Putting first financial things first is a great way to learn how to save money.
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