The United States has a spending culture. Most Americans spend the money they earn within the same year of making it, instead of saving it for another year. Let me ask you this, is a millionaire a millionaire if she spends the million dollars that she made that year? No, she is not a millionaire if she spends all her money. You become a millionaire when you maintain the million dollars. How is it possible to maintain a million dollars when you have just enough money to live, spending money on food, shelter, clothes, etc? The answer is to decrease your spending habits and save the money instead. Save money until you have a million dollars. That’s how the majority of millionaires become millionaires. They save money until they have a million dollars.
One crucial part of saving money is creating a budget. A plan to spend money where it matters. Food matters, therefore some of your money will go to food. Living space matters, therefore some of your money will go to rent or a mortgage payment so you can have a place to live in. The list goes on and you may have many things that are important to you that you will keep spending money on. Why would saving money matter and why would I need to save money?
There are many personal reasons to save money. What is important is to decide for yourself the purpose of saving money. Some examples of saving money are:
- Down payment
- Medical emergency
- Economic crisis
- Become financially independent
Saving money is actually putting money aside to spend it later. If you want to spend money on any of the above ideas or another reason, then why not start today?
How Can I Save Money?
Each time you get a paycheck, spend money on your dream car (or other financial goals you have) by putting some money into a savings account. Since you are spending money on the car by putting money into the savings account make a rule for yourself which limits you from extracting that money for any other reason than purchasing the car. If you take the money out for any other reason, you destroy your own goal. It may help to tell a close friend about your financial goal, who can follow up on your goal and keep you in check.
Where Can I Find Money to Save?
If you have an important enough goal, you will find the money to save. Some strategies to get money to save include:
- Using direct deposit to put a specific amount of money into your savings account
- Re-evaluate what is important to you and make and follow your budget, allocating your money to their appropriate categories in your life
- Replace bad habits or addictions with putting the money towards your financial goal (Examples: Cigarettes, Beer, Porn, Gambling, Eating Out)
- Any gift money can go towards your financial goal as well
How Can I Make a Savings Goal?
The most effective goals are specific and are tracked. To make sure your goal is specific define the following categories in your goal:
- Title – What are you saving for?
- End Date – When will you have all the money for the purchase?
- Final Saved Amount – How much money will you have at your goal’s end date?
- Savings amount per month – How much money will you put into savings per month for this goal? (You can change the per month to per week or another time period)
To track your goals set a specific time each month, quarter, or another time period to look at your goals and whether you are keeping up with it or not. If you need help, for instance, it is too hard for you to maintain your financial goals, create a support group. Ask friends or family members to follow up with your goals regularly. Reach out to them when you are tempted to derail from your financial goals. It may be a challenge, but you can complete your goals if they’re important enough to you. To learn more about saving money from Dave Ramsey click here.
Save Money Today with The Budget Guide