Cutting expenses is the way to spend less so you have money to save. But unless you are actually putting that money into a safe place to be held for some future use, you’re not really saving at all. You’re just spending less.
Even if you cannot save a great deal of money right now, that’s okay. It’s not the amount you save that matters as much as the fact that you make saving money a regular habit.
Grab all the discounts
Many mortgage lenders and student loan companies offer incentives for their customers who set up automatic payments for their monthly payments. It’s worth knowing you’ll never be late, and if you can get even 1/4-point reduction in the interest rate, over time that will really add up to be something significant. Automobile insurers give discounts to good drivers, non-smokers, good students, cars with particular safety-equipment and any number of other situations. But you have to ask. Make the call. Then save the difference.
Get fanatic about coupons, coupon codes and getting cash back when it’s available. But don’t stop there. Once you have that discount, be disciplined enough to actually save that $.50 or $5.00 or whatever it is. Stash that cash. Rakuten, formerly Ebates, is the best way I know to keep all those small cash-back amounts in a safe place. If you don’t have an account and are not adding even the smallest amounts to it every time you shop, you’re really missing out. Open a Rakuten (Ebates) account here, then remember to use it.
Set dollar limits
Okay, so this sounds curiously like “budgeting.” It is. Deciding ahead of time the amount you are willing to spend for anything is to impose important limitations on yourself. Maybe it’s time to let your inner parent out—that part of you that knows how to demand discipline and good behavior.
Banks and credit-card companies don’t seem to have much trouble socking us with unbelievable fees, so take a lesson from them and fee yourself.
Every payday, impose a self-tax equal to one-hour’s pay—the gross amount before taxes. Consider it the price for having a job and put that amount straight into your savings account. Give yourself ample warning that upon your next raise, that the fee will jump to two-hours’ pay.
Every time you make a withdrawal from the ATM or you write a check, charge yourself a set fee of $1 by recording the actual amount plus a buck. Deposits? A $10 fee for each deposit sounds about right. When you’ve collected $50 or $100 in fees from yourself, settle up and transfer the whole amount straight to your savings account.
Oh, the stories I have from my readers who have started this kind of self-taxing plan to create and build their savings. Amazing.
Embrace cheaper substitutes
Have you given the store brands at the grocery store a chance? If not, you should. The pay-off will be significant, and you could be pleasantly surprised to discover just how many items are identical to the name brand—only the label and the price are different. Always look for and then consider the less costly option.
Play with your money
Make a decision that from now on you will never spend another dollar. That means all your $1 bills go into a stash. Or get really brave put away every $5 bill that comes into your possession. Save them. Wrap rubber bands around them. Stash ’em in a safe place.
Dreamwash every purchase
Whatever your goal—$1,000 in your savings account, a new house, an all-cash wedding, a trip to Spain—whatever it is, “dreamwash” your mind so that you think of every purchase you make in light of this goal.
If it’s something tangible (like a house) print out a picture that represents it and hang it in a prominent place in your home to remind you. Make a copy to keep in your handbag. Make it your computer or phone wallpaper.
Make a clever sleeve from duct tape or construction paper that slips over your credit card and requires you to see your dream each time you reach for the plastic. Adapt this clever idea.
It’s your attitude
No matter how much or how little you have to save right now, you can develop a saver’s attitude. The things we tell ourselves about money and the attitudes we choose have a powerful effect on our behaviors.
I’ve watched people with quite ordinary incomes do extraordinary things simply because they stopped feeling entitled and became habitual savers. That has made all the difference.
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