You probably know that you need to save money but it seems like you are literally living paycheck to paycheck. How are you supposed to save something that you don't even have? This guide to saving money shows you how to live the life you want and still have money left for retirement accounts, health insurance, an emergency fund or even a vacation.
Figure out where your money is going. If you have an online bank account there may be an automatic graph set up that tracks your expenses. Sure, you know you spend a lot of money on rent or a mortgage. Then there's that pesky eating three times a day thing that your family is so fond of. If you have a car you'll need to pay for repairs, gas and insurance on top of your car payment. The goal of writing out your expenses line by line is to see where all the "extra" money is going. You might be wasting it ten or twenty dollars a time on lunch hour shopping trips. You might get cash out of an atm and then can't remember where you spent it. This can be a huge reality check and it probably won't feel pleasant. You might even feel guilty or ashamed. Keeping track of your budget allows you to take ownership over your spending.
Differentiate between wants and needs to make room in your budget for a savings account. You need a place to live. You need basic utilities and food. Society is so used to saying "I'd die without a cell phone or cable TV". You may interpret these things as needs, but really you could easily fill your time with other things. You can get into a lot of debt just by making a lot of little indulgences. You might go out to eat several times a week or get stuck in a lot of monthly commitments like cell phones plans. You can also save money by cutting out a lot of little indulgences. You can always add them back in later on when you are more financially secure.
Change your thinking. You may be used to showering your kids with gifts or going out to eat with your friends. As financial guru Suze Orman says on her show it's about the people in your life. Sure, there's going to be an initial shock when you first cut down on your spending. However, after awhile being frugal will be a habit. It will even allow you to focus on the people around you. Being on a budget isn't a death sentence. You don't have to sit at home all the time. It just ensures that when you do go out you feel less pressure and stress. You can really concentrate on your relationships instead of debt and bill collectors.
So now you realize how the lack of money impacts your life. How do you actually save it? You might be too discouraged to try because you can only contribute a few dollars a week. Again, this forms a habit and little amounts can really add up over time. Shop smarter, walk instead of drive, and go to the park with your kids.
Make a pact with your spouse or partner. You can take financial vows to each other. This may seem silly but it's vital to the process. It doesn't matter how much you are saving if your spouse is spending it all. You may even need to talk with your kids about the importance of saving and staying out of debt. This is a chance to teach your children character and sacrifice. Make up for the lack of unnecessary material goods with extra time and attention. You'll find that once you stop focusing on acquiring "stuff' your mind is free to build your relationships stronger then they were. It may be helpful to make a chart and hang it on the fridge with your savings goal. You can turn it into a family event to color in the previous months savings.
Consider the value of an item. You've probably already been doing this just in reverse. You may have been judging quality by the price tag. This can really eat up your savings. Instead shop clearance racks and thrift stores. Remember that it only saves you money if you really like an item. This forces you to create your own style instead of just going with trends. Plus, if you find a great deal at an outlet store you can probably sell it on eBay and then pocket the savings. Another way to add to your savings is to turn your hobby into cash. You can start a scrapbooking business. Just make sure that you don't eat up your savings. You can try writing online for passive income. If you're a crafter try opening up a shop on etsy. You can make your own digital designs, information products, or even jewelry.
Give yourself a "fun" budget but don't exceed it. You need to turn saving money into a life long practice. This doesn't mean that you'll never go to a movie or take a vacation again. You can find less expensive alternatives by taking a staycation or picking up videos at the library. If you have a plan for Christmas gifts and holiday events then you won't have to go into debt. So really you are saving for recreation in the future as well as your retirement. Just keep the accounts separate so you don't confuse the two.
Hide your credit and debit cards instead of just the bills. If you live off of cash you won't be able to get in over your head but you'll have to budget very carefully. This also means that you won't have to deal with interest rates. If you want to buy a high end item you'll have to save up for it first using this system.
When you were a child you probably had a piggy bank. As an adult you may have forgotten how to save money because you got used to debt or got in over your head with monthly bills. A guide to saving money can only change things around if you actually implement a plan.