Easy as 1-2-3

    Somehow or another, I’m often giving advise to people on how to save money. I’m not necessarily scrooge when it comes to saving money, but I guess I am pretty good at not splurging or not overspending my means.

    Therefore, I’m always on the lookout for smart tips and tricks that might help people out. You see, the biggest obstacle to saving money is NOT income level, or that big expense that throws a monkeywrench into your savings plans. It’s you. Most times, when I meet people who have poor savings, it’s because of three things:

    1. they don’t have a tangible budget in place… they just sort of ballpark it.
    2. they have a vice (gambling, smoking, collecting shoes, buying gifts for children, donating money).
    3. they have developed a habit of spending every penny they can get at, instead of a habit of constant savings.

    Now, before we continue, you may be shocked to read the examples of “vices” in #2. Buying kids gifts? Donating money? But yes, those can be vices, if the amount you spend on them is severely disproportionate to the amount of money you make. For example, you can give and give and donate money, and then be forced to cheat on your timecard to make enough hours and income to support your family. Or you can buy your kids lots of gifts, only to ignore that $87 medical bill at the clinic.

    However, regarding #3, developing a habit of savings is a crucial way to change your lifestyle forever. In order to do that, you simply have to train yourself to ALWAYS put money away. Regularly. This is not something that can be done when you have extra cash lying around, or if you come into a windfall (inheritance, bonus, etc). It MUST be done like clockwork in order to train yourself to do it. In any sort of training, you must be repetitive and consistent. No Olympic athlete got to the Games by running when they felt bloated. Rather, they ran every day, for hours a day, to train for the Games. They ran when they felt sick. They ran when it was cold outside. They ran when it was time to run.

    A person who wants to train to be a saver, must save money that way too. It has to be the first thought in your mind when you obtain some money. “How much of this will I save?”

    A simple way to begin to build your habit of savings is by the weekly method. I saw this on Facebook, and thought it was pretty neat. Simply, you save money based on what week it is. So let’s say you save money every Monday. In week 1 (this year, January 5th, 2015), you drop $1 into your savings. In week 2 (January 12) you drop $2. And so on and so forth. Now, if you do that, you will end up saving $1,378. May not sound like much, but think about it… if you are say, 25, and do that until you retire (say 65), that comes to a total of $55,120, not counting interest. That’s a pretty decent chunk of change, and averages out to saving only $3.77 a day. Not bad, right?

    If you’re thinking about doing this for real, you may want to change it up and do it in reverse. So on Jan 5, 2015, you put $52 into savings. Jan 12, $51. Jan 19, $50. And so on. I personally think this is a better way to do it for two reasons. First, you tend to be more excited about something when you first start, so doing a lot to begin with is not a turn-off. Second, seeing the amount you have to save gradually decrease may make it easier for you to continue to do it.

    Something to think about… maybe it will be YOUR new year’s resolution. In any case, however you decide to do it, happy savings!