Tuesday, June 27, 2017
An Easy Way to Start Saving Money
Welcome back to “Tuesday Tip of the Week,” my weekly post about ways to help your own financial situation. Today’s post is all about getting started with saving. It doesn’t matter if you are 5 years old or 55, you have to save your money. Many people have a hard time getting started. In this post, I’m going to go over a simple sure fire way you can start saving money. For those of you who are already saving money, you can use this method to save even more money than you already are. All you need is a pad and paper to get started.
1) Analyze your own situation
Some people have extra money lying around at the end of each month. Others have a hard time finding anything they can save with life always getting in the way. Both of these types of people have something in common; both can save money. All it takes is a bit of analysis of your current spending habits. How you do that is by bringing up your bank statements. You can find them on your online banking and some banks even send you paper copies still. It will show every transaction you make.
It should look something like this:
Paycheque +$1000
Loblaws -$200
Mac’s Milk -$12
Moxies -$75
LCBO – $45
Tim Horton’s – $7
Etc., etc., etc.
When you actually take a look at that statement you see exactly where every dollar goes. Grab a highlighter and highlight the ones that you think you can eliminate. I guarantee there will be some unnecessary expenses in that statement. We all have some things we can sacrifice so keep it tight. Grab a calculator and add up all those expenses. That will be the number you aim to save each month. For some people, this number will be very large as they blow a lot of their money on crap. Others are pretty vigilant and it will be tougher for them to come up with this amount. Either way, everyone can save something, so the easiest way to do it is to cut something out of your budget that is not completely necessary. Don’t know what you can cut? Tune in Wednesday and Thursday when I go over some ways to save extra money by trimming your budget. Anyways, on to the next step:
The Frugal Mindset Will Make Your Life Better – Budget Boss
2) Pay Yourself First
I say this all the time, sorry. The reason I say this so damn much is because it is the easiest way to save money. Most people spend money and then save what’s left over. That is a recipe for disaster. It is only natural to spend what you have, until the last dime. What you have to do is put the money away for savings and then spend what’s left over. So let’s say that the number you came up with in section 1 was $250 a month spent on junk. If you get paid every 14 days, as most people do, have your bank withdrawal $125 every paycheque and put it into savings. It’s just that simple. The money is gone, bye bye. Here is where it gets a bit tougher. You now have $250 less each month to spend. So what you do now is take your list from section one and NOT spend money at those places. This could include restaurants, coffee shops, the beer store, the mall, etc. Over the course of each month, it is now your discipline to not waste money at these places that will allow you to comfortably save money. The money is already gone into savings so now it is just prioritization. Will you spend the remainder on clothes and booze or food and bills? Discipline will set you free.
Breaking Down ‘Pay Yourself First’ – Investopedia
3) Send those savings far away
We all know how much I love the Tax-Free Savings Account (TFSA). If it had a face I would kiss it. Here is the problem. What good are savings if you constantly dip into them? I have several friends that transfer the $100 they save every 2 weeks from their TFSA back into their chequing account. Now, what did that accomplish? My recommendation is to have that TFSA or other savings vehicle at a different financial institution. Extra points for the one I work at!! Anyways, have a separate account at a separate location strictly for savings will not leave you tempted to touch these funds when hunger or tequila strikes. Just keep plugging away and let time do its thing. Turn around in one year and you will have over $3250!! That’s not that bad!
The Secret System For Those Who Can’t Save Money – Studenomics
A sure fire way to save money is to save on the things you spend your money on. The easiest things to eliminate from your spending are those unnecessary things we all blow money on. Lunches, coffees, nightclubs, restaurants, clothes, and movies are all fairly big wastes of money. Be a grown up and steal your movies off the internet! This 3 step process is the best way to get started, so don’t delay any longer.
“You must gain control over your money or the lack of it will forever control you.” — Dave Ramsey
Email – joe@budgetboss.ca
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