Disciplined Saving

Summary: More important than the amount of money you save is the consistency with which you save it. Obviously, people who are wealthy and can afford to save large sums of money are going to benefit from larger interest earnings, but for the rest of us- even saving a few dollars on a consistent basis is going to add up over time. Money is worth more the longer you have it, especially if you are saving it in interest yielding accounts. The local bank has savings accounts, and ther...

More important than the amount of money you save is the consistency with which you save it. Obviously, people who are wealthy and can afford to save large sums of money are going to benefit from larger interest earnings, but for the rest of us- even saving a few dollars on a consistent basis is going to add up over time. Money is worth more the longer you have it, especially if you are saving it in interest yielding accounts. The local bank has savings accounts, and there are numerous providers of high interest savings accounts online that can really maximize the money you are saving to help it grow. One way to establish a disciplined savings routine is to use an automatic deposit service. Whether you go with a retirement or investment plan through your employer, or set up a savings account that is automatically "fed" with transfers on a certain day of the week from your main bank account- it's important to establish a regular savings plan. First, determine how much you can afford to save- and don't say, "NONE!" If you really feel you don't have any money to save each week, start with a very small amount, such as $3 a week. I guarantee you won't miss the $3 a week that is automatically saved using a direct deposit or automatic transfer system, but if it were up to you to make that $3 deposit each week on your own- chances are you would never get around to doing it and spend the $3 at the drive through! Overcome Overspending A very common reason people don't have much money to save on a weekly basis is because of overspending- and often we don't even realize we're doing it. We reason with ourselves that the drive through is only going to cost $5 for lunch; or the jeans are on sale so we're really saving money as we hand over a $20 bill to the cashier. The truth is, we can come up with one excuse after another for why these little purchases are necessities or why it's no big deal that we're buying them, but the fact of the matter is- every time we make these little impulse purchases we're using money that could have been saved. A good exercise to try is to keep track of all of your spending for an entire week. Every time you use your debit card, credit card, or take out money to pay for something- write down the purchase. Write down what it is and the cost. At the end of the week, divide the list into "necessities" and "excessities"- meaning, a list of items and bills that absolutely must be paid (food, loan payments, gasoline, etc) and a list of the things you really could have gone without (take out, pack of gum, the jeans that were on sale). Add up your excessive purchase column and see how much money you spend in a week that could have been saved. This will give you a good understanding of wasted money and the areas that you can become more disciplined in order to increase the amount of money you have to save. That doesn't mean you should eliminate all entertainment from your life! The trick is to find a budget that you can work with the majority of the time- allowing yourself some money for entertainment purposes even while paying your monthly expenses and most importantly- setting aside money on a weekly (or monthly) basis. Forget What Your Parents Taught You About Money Most people are taught things about money as children that actually create financial problems as the children become adults. Have you ever heard comments like, "Do you think I'm made of money?' or "Money doesn't grow on trees, you know!" Comments like these actually teach people to fear there isn't enough money to go around. People who have lived their lives with average amounts of money tend to harbor negative feelings towards people who are among the wealthy. This is the best way to keep yourself from building your own wealth subconsciously; so it's important that you don't think negatively towards the rich if you hope to one day have the financial success that they have!