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
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.
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Filed under Strategies to Save Money, Ways to get out of Debt by bob
Comments on How to find money to save »
The Automatic Millionaire is a fantastic book. David Bach presents his material in a very engaging, easy-to-read style. I recommend this book to all you ChristianPF readers.
I sat back and realized that I only really watch 2 or 3 TV shows on a consistent basis and that they were all available on broadcast TV, so I got rid of the $12/month basic cable, freecycled for a antenna (bunny ears) and we are quite happy. We can’t get ABC but watch it on the Internet. We even went for awhile this summer with the TV unplugged and just plugged it in to watch DVDs. I’m actually going to go do that again since the writer’s strike has my shows off!
great post, bob. i’ve found that it has been hard for me to actually do this though. got some advice on making it work for girls who are used to getting what they want? : )
For me, I think one of the best ways to find money to save is to take it out first thing (actually second, after tithing)… Once it’s squirreled away in its ING account, it’s out of sight, out of mind.
@Rose
I agree with Centsible shopper - take it out first, then you really wont think about it, and the temptation will be minimized. As far as girls who get everything they want - Well, there are a lot of them these days, but just remember - you may be able to get everything you want for a short while, but it will catch up with you. You can only live beyond your means so long, before debt hits back - and it hits back hard.
Experiencing debt’s “counterpunch” is what helped me - hopefully, you can learn from my and other people’s mistakes!!
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