How to find money to save

Everyone knows they should save, but a lot of people say they can’t find the money to start  saving. They get their paycheck, promise themselves that this time they will save whatever is left over and sure enough two weeks later nothing is left over to put in savings. Have you ever been there?

So how do you find money to save on your current income?

The best way is to get a piece of paper, attach it to your hip for a week, and write down EVERY SINGLE thing that you spend money on. Even if it is a 50 cent newspaper - every single thing. Most people are amazed at what they find, not so much because they forgot that they spent the money on _____, but now they can see how it all actually adds up.

Once you are armed with the truth of your miscellaneous spending, you can look to find ways to fight back. David Bach calls this the “latte factor.” In his book, The Automatic Millionaire he explains how just by cutting coffee drinks out of your daily habit, you can fund a nice retirement if you invest the savings.

The point here is that you can exchange a small sacrifice (a coffee everyday) for a large reward (a nice sized nest egg for retirement). So, regardless of whether it is a daily coffee, or buying one less article of clothing a week, or cable television, or any number of things, it is surprising how much benefit can be gained by making a small sacrifice.

So grab your list and look for trends in your spending - things you may buy on a regular basis and ask yourself, “Will my life come to a screeching halt if I stop buying ______?” Chances are good that you can find one or more things on the list that you could answer “NO” to. If so, are you willing to sacrifice them?

For some people it can be difficult to pinpoint an expense that is UNNECESSARY, because otherwise you wouldn’t be buying it in the first place. For these people, this is where the rubber meets the road, because if all of these expenses are necessary, then you need to decide which of them you are willing to sacrifice in order to live the life you want in the future. This part requires thinking “outside of the box” and imagining and adapting to a life without _______.

Often times we are perpetuating expensive habits, just because that is what we are used to doing. It is scary to think that a habit, that I may not even enjoy that much can be the only thing between retiring well or not at all.