Since I was still a kid I was always good at saving money. I was like no one from my family. No matter how much we had in the house, or how was the general situation in my country (we went through two wars and one hyperinflation) I always managed to save some money. I was never a miser and I always went out gladly, always bought myself whatever I desired and somehow I always managed to save money.
I have realized that other people are struggling with saving money, as from what I’ve seen they always try to cut down expenses (like heating, gas for the car, etc) and actually spend that money somewhere else.
So I thought it would be useful if I would share with you my ways to save money. But, before we continue, I’d like to point one thing. No matter how much you earn, you can always spend more.
Open a savings account
Open a savings account or just use your plain old piggy bank. Whenever you put something in it, don’t get it out. Don’t touch it. Forget that you have it. If you don’t have enough money to survive a month – don’t use that money. You should not consider it at all.
Be persistent and put 10% of each income in your savings. I know you might be tempted to put more at some times due to higher earnings or unexpected earning (bonus), but don’t. If you made some extra money, you deserve to spend it. At least a majority (90%) of it. The reason for this is that you need to be persistent. You are used to spending money… so if you’re not persistent with putting the money in, you won’t be when it comes to getting the money out, or even worse, not put any money the next time you have income. So, be lazy instead of hard working on saving, but be persistent.
Make your money work for you
Don’t just work for the money. Put the money on the account with interest rate and earn even when you’re not working. This helped me increase the value of my money even before I knew anything about investing.
Invest in life insurance
While you might be healthy and well, never forget to invest in life insurance. You never know what might happen and before you know it, you might spend all of your savings on health (this does not apply only to USA which have a poor health system). In case you have the insurance, you won’t be thinking of that, and you won’t cause yourself additional stress. So choose wisely and choose a quality health insurance.
Before buying ask yourself if you need it
It doesn’t always have to be need. Sometimes you might just want something. If you really want it, afford it, but if you don’t really want it and you don’t really need it, don’t buy it. This will save you a lot of money and you’ll be able to spend it on things you like, need or want.
Never go all in
No matter how good something is, weather it is investment, purchase or opportunity, never spend all of your savings money. Leave at least 10%. This will be a foundation for your next round of savings and will boost your confidence.
To sum it up, you don’t need to give up on things you like. 10% will almost never make a difference in spending and can make a huge difference in savings in only one year. Now put an effort into starting and practicing this, and it will become a self-motivating thing soon enough as you’ll see your savings increase.