A simple word with a huge meaning. It is one of the hardest habits to establish in our financial life but arguably one of the most important. Because without savings we have nothing to utilize to help grow our money.
So how do we save money? I am sure you have heard this before but saving money is the most important thing you can do for your financial health. The first axiom of finance is to pay yourself first. Before you pay any bills and buy anything you must set aside money for your savings or investments. The rule is to save at least 10% of your take home pay every check. This may sound like a lot but it is an absolute must if you are going to establish any sort of saving plan with the goal to grow your money. Like anything you start small and grow towards your goal. I always say you can’t eat the whole pizza at once, as much as we would like to, but you need to eat it piece by piece. So if 10% is too much of a bite at first start at 5% and work your way up. You could do this gradually and as you increase it will feel less and less painful until you are at the 10%.
I guarantee that once you start this you will start to notice it less and less and you will find ways to make do with a different amount or start to look for ways to change what and how you spend your money on. You will start to notice your savings growing which in turn will give you more incentive to keep up the process. The thing that I have found that works best for me is to automate it. I have money automatically set aside every paycheck before I can even see it in my account. Most employers allow splitting your direct deposit so you can set where it goes with every paycheck.
Please do not take what I am saying as to not pay your bills or to deprive yourself of things that you enjoy. The goal here is to find ways to help you set aside money for your retirement but if you are suffering or miserable then this will never happen.
There a multiple ways to save money or find other ways to set aside more. Among them are finding ways to reduce your bigger ticket items. Because frankly cutting out a latte here or there is not going to get you where you want to go. And nickel and diming your way to retirement is no way to live. So you have choices to make on how you allocate your budget. Take a look at your living situation and decide if that is important to you and see if you could find a place that would allow you save more money. Another option would be your car payment, either refinancing to get a lower payment or finding a cheaper vehicle. Another option is looking at some of your other bills such as cell phone,cable/internet, and your insurance coverages. There are many different ways to go about looking for ways to reduce your spending. The important thing is to take some time and find what is important to you and to take steps to improve your situation.
Now this doesn’t include the obvious thing. You can look for opportunities to make more money which would help you increase your savings. Either looking at getting a raise at your current gig or looking for other positions outside of your current employer. I took a second job at night and weekends to pay off my debt so I could have more to start saving. I have found that if something is important to us we will do what we have to make sure it gets done.
One thing that has helped me to set goals with my savings plan was to make a list of goals I would like to achieve while I am here on Earth. I also created a bucket list of things I would like to see and do. I have found that this makes saving for me easier because it gives me pause before I buy something impulsively because of these goals that are in my head.
- An example of something I would like to do someday is visit the Baseball Hall of Fame. Being a die hard San Francisco Giants fan and huge baseball lover it is on the bucket list of things I would love to see one of these days.
- Another would be to visit every baseball park in the country. Maybe not all in one season, but over my lifetime.
- Lastly would be to visit all of the Civil War battlefields. I have been an avid Civil War buff my entire life and I have been able to visit a few but would love to take some time and visit them all.
So what is your goal? I challenge you to take some time to make a list of goals or a bucket list of things you would like to see and do.
Please let me know what are your goals and or what your bucket list would be. We can help keep each other motivated to save more money and achieve our goals together.
Until next time, please let me know your thoughts or questions and take care.