I was riding in the Green Machine today (my car) and listening to the radio, when I heard about an article that CNN Money had put out talking about extreme saving and how people can take the money they make and put some away for later use. I decided to search for the article, and found it (yay!). Here are a few tips that I found helpful, especially in a time where saving is important to setting ourselves up for the future.
I thought this was a great idea, and one that I try to put into practice pretty regularly. I also call this impulse buying. We have all have something that catches our eye once in a while and decide that we want or need it. This article talks about families who wait up to six months before making the purchase. If you still want it in six months, then it's an okay buy, but it also gives you time to save up for what you want. In this article's case, it was a pair of earrings that cost $195. Instead of buying them right off, they trimmed the grocery bill a bit for five months until they had the money to make the purchase. It may seem a little nuts, but giving yourself that amount of time for bigger purchases will allow you to save up money, and at the same time realize whether or not you actually want/need it.
Live Below Your Means
This may seem like a no brainer, but living below what you can actually afford will ensure that you have some spare money at the end of each month. The spare money should be put away for later use (like a house if you are in an apartment). Sure, you may be comfortable where you live right now, but look and see if there are cheaper options. For me, I could absolutely find a roommate and that would cut my rent costs in half. I could also possibly find a cheaper apartment rather than living in a two bedroom by myself. I currently live below my means (I have excess money left over after every month), but I could also increase that number by making a few small moves. I'd have a bit more money at the end of each month, and a bigger savings account. Now, on the other hand, I enjoy living alone and am okay with spending a bit more for a bigger place, but you get the idea. Live below your means and you'll have money left over.
Track Your Spending
This one takes a little bit of number crunching, but it's really important to record absolutely everything you spend money on each month. It is definitely tedious, but it allows you to understand where your money is going at the end of each month. It won't be the same for each month, but it will allow you to figure out what you are spending money on and where you can cut costs. As a matter of fact, one of the great things about android phones is that you can download different apps that will allow you to keep track of your spending each month. Mint.com is one of the better apps, and it's free!
For a full list of the extreme saving tips, go here. There are eight tips in all, and all of them are very helpful. Some are easier than others (avoiding debt is a hard one especially out of college), but if you stick to it, you'll find that you will have more money at the end of each month!
What do you do to save?