What is the Secret to Saving Money?

Posted on by Emily in Budgeting, Saving Money & Finances

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What is the Secret to Saving Money? Considering how difficult saving money can be, it’s not uncommon for people to wonder if there’s some sort of secret. After all, why do certain people have an impressive savings account while others barely have enough in their checking?

I think that in a lot of cases, the ability to save money is often a personality trait. Take my brother and I, for example. Since we were very little kids he’s just loved spending money while I was always worried that I was buying the “wrong” thing. Our parents would take us to the flea market on Sunday growing up and give us each a dollar. My brother would spend his dollar on the first, shiny thing within 30 seconds. I, on the other hand, would hem and haw, worry until I gave myself an ulcer, and finally gave up on spending my dollar at all.

Now, I don’t think child-me knew the “secret” to saving money. But I was cautious with where I wanted my dollar to end up and I’d say thinking about every little purchase can help prevent frivolous spending.

What is the Secret to Saving Money?

As an adult, however, I’ve learned that the “secret” to saving money is scrupulous budgeting and discipline. By creating a budget and sticking to this budget, you’ll be surprised just how much money you can really save. It takes a lot of work and will power, but it over time it will become a way of life.

These are the steps by which I’ve successfully saved money:

#1 Set a monthly savings goal. Sometimes you just need a number to work towards. After examining how much money you can realistically save each month, come up with an amount of money you’d like to have put into savings. It can be $50. It can be $500. Whatever it is, make sure that is achievable and work hard towards it.

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#2 Give your life a frugal makeover. Many people don’t realize that one of the secrets to saving more money is to take a dollar here and there from your normal expenses rather than cutting out one big thing. Let’s just say you want to save $1000 a year. To break it down, you’ll need to save about $2.75 a day OR $20 a week, OR $80-ish dollars a month. Do you have a bad habit that’s costing your $2.75 a day? Perhaps indulging in a soda or snack or beer? By eliminating a bad habit (something that isn’t good for your health) you stand to save a lot of money!

Also, planning your groceries and transportation each week can help you save a bundle. Write out what meals you are planning on making for the entire week and stick to it. You’ll be amazed at how much you can save. Also, cutting down on going out for dinner by once or twice a month can help you save as well.

#3 Impose a 48-hour purchase rule on non-essential items. If you find yourself wanting to buy something that’s expensive and a “toy” or another pair or shoes or something, pull yourself away from the situation and take two days to think about whether or not you really want to buy it. Often times we see something we like an want to feel the thrill of the immediate gratification. If you still really want to buy the item and have justified it to yourself financially after two days, only then should you buy it.

#4 Cut up your credit cards and focus on paying off your debt.

You may not feel like you’re saving money, but getting rid of your debt will help you be in a position to truly save later on.

#5 Put any extra money that comes your way into savings.

Any time you come into extra cash– tax returns, bonuses, inheritance– put it into your savings rather than spending it. This can be incredibly hard, but your discipline will pay off in the long run.

No one said saving money was easy, but it definitely is possible. Just remember, taking the time to create a budget for yourself and sticking to it is really the only way to get ahead.