This isn’t going to be an in-depth savings plan with a ton of return on investments options.
Instead, it’s a simple strategy that works great if you follow it.
It requires knowing how to say ‘no’ and how to spend less than what you’re accustom to.
You should always have money put away for two reasons:
2) The Future
If you’re not saving any money, you need to start RIGHT NOW!
There will ALWAYS come a time where you’ll wish you started a long time ago.
Here are 4 simple steps you can follow to start saving money today.
1) Set a Budget
First things first, you need to set a budget.
This is vital for saving money success.
Come up with the amount of money you can spend weekly that will still allow you to cover all of your expenses.
Whether you can only save $50 or $5 every week, it doesn’t matter.
We’ll discuss how to save more in the next steps.
For now, start by writing down all of your bills.
And when I say all, I mean each and every single one of them.
Write down your rent/mortgage (if you have either), your cell phone bill, your weekly gas money, food, and any other miscellaneous expenses you may have.
…And yes, that daily $4 Starbucks coffee counts as a weekly expense.
Take your time with this because there’s always an expense or two that people leave out.
Sit down and really think about every single one you have.
Think about what you do daily, especially during your free time.
Once you have all your expenses written down, subtract it from your total monthly income.
So if you make $3,000 a month, and your bills amount to $1,700, you’ll have $1,300 left over.
Now take that number and divide it by 4.
In this case, $1,300/4 = $325/week
You now have the total amount of money you can spend weekly after paying all your expenses.
What you’ll want to do here is save as much as possible from the $325.
My rule of thumb is that you should start saving a minimum of 30%.
So out of $325, $97.50 would go into your savings.
Saving $97.50 is something most people won’t discipline themselves to do.
However, if YOU do it, the rewards will be well worth it.
Once you have this system in place, it’s time to learn how to live on less.
Now, here’s where things get interesting.
Once you’ve disciplined yourself to save 30% of your leftover money, start saving 35%.
This will be challenging, but will educate you on how to spend less than you need to.
And of course, it’ll build your savings account faster.
So instead of $97.50 going into your savings, you’ll now be putting $113.75 away.
The key here is to slowly go increasing the amount of money you save while minimizing you’re allowed spending money (budget).
Saving 35% instead of 30% shouldn’t be too hard if you follow the rest of the tips discussed in this article.
The best way to make saving 35% instead of 30% easy is by living on less.
If you start saving 35% of your leftover money, but also lower your monthly expenses by 2%-5%, you won’t even notice the difference.
As one increases, the other decreases, and as a result, they balance each other out.
Of course, you’ll eventually reach a limit as to how much you can lower your monthly expenses.
This is where living on less comes into play.
Let’s go over how to do that.
2) Live on less
Most people could live on way less than they currently do.
Trust me that no matter who you are, you have room to “cut back.”
A common area where people spend a lot of money is food.
Many of them eat out way too often.
If you’re eating out often, it’s time to start preparing your own food.
Most of the time, preparing your own food isn’t only cheaper, but healthier and tastier.
Food places these days don’t care for food the way they should.
They store and prepare food in a rush and ruin its quality as a result.
Don’t tell me you don’t have time to prepare your own food.
The internet is packed with 5 minute breakfast, lunch and dinner ideas.
When I was in college, I used to buy the huge bags of mixed vegetables and a ton of chicken breast.
I would also buy buffalo wing sauce or any other dressing to give it flavor and to prevent getting bored of the same flavor day in and day out.
Money was very tight in college so I did my best to cut back.
I would throw the vegetables in a bowl with the chicken breast, heat it up for five minutes in the microwave, and then pour sauce over it.
Easy, quick, healthy, and cheap.
This was just one of my many meal examples.
While other people were going to Subway, Chicken Kitchen, etc. and spending $6-$12 on lunch, I was saving money by preparing my own food.
It’s OK to eat out sometimes.
I understand how there will be moments where you’re on the run and preparing your own food won’t be possible.
The goal is to cut back as much as possible.
Not just for the sake of saving money, but for your health.
Besides food, cutting back other bills like your cell phone, internet, and so on is vital.
Let’s go over how to do that.
3) Start Making Calls
Take a look at your list of bills and find out if you can lower any of them.
Call your cell phone provider and see if they can offer you a lower plan or reduce your current one for your loyalty with the company.
Even if they only offer $5 less a month, take it!
Call all the other companies that provide you some sort of service and do the same.
…Especially your car insurance company if you drive.
This is something most people don’t know but most companies will work with you and try to help out.
But don’t ever expect them to call you…You need to call them!
If any of the companies can’t offer a discount, begin shopping for another service provider.
If you have 5 bills and can lower all of them by $10, that’s an extra $50 you could put into your savings every month.
Sure, an additional $50 a month won’t make you filthy rich.
…But would you rather have an additional $600 in your savings account every year, or throw that money away?
When it comes to saving money, people automatically think:
“I need to make more money, that’s the only way to do it”.
The reality is that yes, earning more money will help (obviously) but cutting back on expenses will help just as much.
And trust me, you’ll find ways and areas to cut back if you look for them.
So let’s go over everything we’ve discussed so far.
First, you need to set a budget.
Then take 30% of that budget and put it into your savings.
When you’re comfortable saving 30%, increase it to 35% and keep increasing it as much as possible.
You also need to look for areas to cut back.
Lower all your monthly expenses as much as possible and cut back on eating out and other things you do often that add up.
Am I telling you to never go to Starbucks again?
No, of course not.
That’s just silly.
But if you’re going DAILY, cut back and begin making your own coffee at home.
The more you discipline yourself to live on less, the more you increase the amount of money you save weekly, the more you’ll increase your savings account.
But most importantly, the more you’ll be prepared for any emergencies and your future finances.
Start saving money today!
4) Reward Yourself Properly
As important as saving money is, you should always reward yourself once in a while with something you like.
Whether this means a trip somewhere, or eating at your favorite place…do it.
Here’s the trick to reward yourself and still save money.
Let’s say you’re going to take a trip somewhere.
Start planning and shopping for tickets as soon as possible to get the best deal.
If you find that going in March will cost you $400, but going in April will cost you $300, then wait 1 more month and save those $100.
If you’re going to eat at your favorite restaurant, check on Groupon to see if there’s any deals or go into the restaurants website and see if they have any coupons.
You could end up paying $40 for a bill that was going to be $80.
Many people don’t search for deals.
It barely takes any time and can do wonders when it comes to saving money.
Again, saving money doesn’t mean you never enjoy yourself.
It just means you plan ahead, live on less, and save as much as possible every month.
Obviously everyone who reads this article doesn’t earn $3,000 a month and have $1,500 in bills.
Some people will earn a lot less or a lot more.
Some people will have way less bills or a lot more.
The key here is to create your own budget following these principles.
Always seek cheaper ways to do things.
You don’t have to obsess with every single thing you do, but make it a habit to try finding less expensive options.
As long as you can discipline yourself to set a budget and stick to it, to continuously increase the percentage of money you save each week, and to always shop smart; saving money will be a breeze.As long as you can discipline yourself to set a budget and stick to it, to continuously increase the… Click To Tweet