Blog

3 Steps to Save Money


3 Steps to Save Money

It is the New Year and 2015 is the year to save money. Saving money is easier said than done, especially when you’ve been promising yourself for over a year to save money. The approach I took that helped me save money was looking at life from a psychological point of view. One of the things I noticed when I had a savings was my carelessness with money. When you are aware that you have a savings you tend to stop budgeting, it’s natural. I would splurge and buy myself a pair of shoes. Sometimes I wouldn’t budget during a grocery trip. Pretend you don’t have a savings, therefore, you can’t spend. After I spent my savings I would justify my spending with excuses. It is important to take responsibility from now on for why you haven’t saved money versus excuses for why you couldn’t save. If you continue to make excuses you will then always have an excuse for every time you gave your word and broke it with an excuse. Taking responsibility not only liberates you but teaches you to respect your choices, mistakes and prepares you to live in the present.

You Need a Financial Goal

The first thing I did was create a financial goal. Creating a financial goal is giving your word or making a promise. So ask yourself, how much do you want to save and by when? Keep in mind, you want an achievable goal but still very much a stretch.

Financial Goal: I WILL SAVE [insert amount] TO [reason to save] BY [date]. THIS IS IMPORTANT TO ME BECAUSE …

Example: I WILL SAVE $2000 TO FINANCE A CAR BY MAY, 1 2015. THIS IS IMPORTANT TO ME BECAUSE HAVING A CAR WILL BRING ME ONE STEP CLOSER TO BEING INDEPENDENT.

Creating an Action Plan 

Next step is to create an action plan. How are you going to save $2000 by May 1? In this example, I figured out that there are 13 weeks starting February 1 to May 1. I took 2000 and divided by 13 and got 153.8. That mens I would have to save $154 every week to save $2000 by May 1.

Action Plan: MY GOAL IS TO SAVE [insert amount] BY [date]. I WILL ACCOMPLISH THIS GOAL BY SAVING [insert amount] EVERY [insert day] TILL [end date].

Example: MY GOAL IS TO SAVE $2000 BY MAY 1. I WILL ACCOMPLISH THIS GOAL BY SAVING $154 EVERY FRIDAY TILL MAY 1ST.

Budgeting and Additional Income 

After creating your financial goal and plan, you need to budget. Take a look at your expenses and review the possibility to cut down all of your expenses. While luxury bills can be cut off completely, there are ways to manage your utility bills. Utilities can be cut down by taking shorter showers, using sunlight as your source of light during the day and avoid leaving lights on when you’re not using them. In addition to that, how much you are spending on groceries can be cut down too. Read “5 Ways to Cut Your Grocery Bill in Half” to help budget. So, what if you’re struggling to save $154 every week? Start looking into what you can do to bring in additional income. Good examples include garage sales, reselling college books, clothes and even a second job. Remember that it is important to keep up with your action plan so making an extra few hundred bucks can make a difference. GOOD LUCK!

 


July 10, 2015
Comments