Its summertime according to social media it looks like everyone is shining but you. Your Facebook and Instagram are being flooded with images of your friend’s lavish vacations. Carlos is swimming with sharks near the coral reefs and Janet is partying with locals in Madrid. You like their photos but inside there is a hint of jealousy. Hate no more, because you too can break out your travel wings and be the envy of your social media circle with such a simple tool as saving. Yes, saving money is your ticket. This blog post will give you easy steps you can start today to save money.
Here are the 15 Steps. Steps 1-5 set the groundwork.
1. Know why you want to save money. Write it down. This is a crucial step to keep you on track. Do you want to save money for a vacation? Are you saving for a down payment on a big purchase like a house or car? Are you saving money for an emergency fund or your kid’s college fund? Try to connect your why to an emotion. An emotionally compelling reason super charges your focus and commitment. Remember human nature is prone to do more to avoid pain than to gain pleasure. Take advantage of that. How will it hurt you if you don’t save money for your why? How will it affect various areas of your life such as your relationships, confidence, finances and career? For example, if my why is so I can put a down payment on a multi-family house. I would focus on how much money I would lose in rental income over the years for not saving the money to buy the multi-family. In addition, it would affect my retirement egg and my children’s inheritance.
2. Have a goal. Write down a specific amount and a specific date. Vague goals produce vague results. Vague: I want to save money for a summer vacation. Specific: I want to save $2,000 for vacationing in Orlando, FL by July 13, 2019.
3. Track your current spending. Find out where your money is going. Look back at bills, bank transaction sheets, credit card statements, receipts. Write down what you spend your money on and how much.
4. Decide your needs versus your wants. Take your time to categorize items on your spending list as needs and wants. For example, needs are mortgage/rent, utilities, food/groceries, clothing, transportation. Wants include, eating out at restaurants, new shoes every week, jewelry, and cable.
5. Create a spending/saving plan. A spending/saving plan directs your money to where you want it to go ahead of time. Re-allocate your funds toward your savings goal. Take the money you used on your wants and put it in your savings. Make sure to look over your why while you’re doing this to stay strong and motivated.
6. Reduce the amount of money you spend on wants. Try this if it’s too hard to cut out all the spending on your wants entirely. For example, instead of eating out five times a week limit yourself to two times a week.
7. Put the savings in an account that is hard for you to access. For example, open an account with a financial institution on the other side of town. This is to keep you from accessing it before the appointed time. Studies have shown that the more steps it take to do something the less likely you are to do it.
8. Shop around for services. See if there are better deals out there for things such as insurance (save more when you bundle), cell phones, and internet providers.
9. Cut cable. Today, there is a lot of streaming services offering more options at a lower rate. Do your research and see what is right for you.
10. Cut subscriptions you’re not using. If you haven’t been to the gym consistently in 6 months drop it until you’re ready to commit.
11. Buy staple items in bulk for a better price. Items with a long shelf life like rice are good to buy in bulk and you can never have too much toilet paper.
12. Use cash. It’s been shown that people spend more when they use plastic. So take advantage of that and go shopping with cash. Just commit to once you’re out of cash you’re done shopping.
13. Make saving automatic. Set it up so that a portion of your paycheck goes to your hard to access savings account.
14. Don’t take on any new debt. Avoid using credit cards or taking any other kinds of loans. Avoid any new bills.
15. Weekly/Monthly Reviews. At the end of the week check to see if, you’re actually spending according to plan. Note where you are overspending or new expenses that came up and recommit. At the end of the month check to see how close you are to your savings goal. In addition, make a spending/saving plan for the next month.
These steps require time, discipline, honesty, and execution. They are easy in terms of they are something you can do if you are committed to your why. You will attain the results you want and gain the tools necessary for future endeavors. Now go put these into practice and become the envy of your friends/followers. Enjoy your summer!
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