The Importance of Saving

It's natural to want more money.  It's something we all want.  Despite being taught by popular media that "money isn't everything" we still desire it.  And most of the time it isn't because you are greedy or selfish, it's because you want to live a more stress-free life.  Wouldn't you prefer to not have to worry about having enough cash on hand to pay the bills?  Wouldn't it be nice to have the peace of mind that if your car breaks or another emergency comes up, that you have got it covered?  Of course it would, and that doesn't make you a bad person in the slightest!

Saving Money

There are two ways in this world to get more money.  The first is to earn more, and the second is to cut costs.  Now obviously earning more sounds like the "fun" option.  However, it's important to learn how to cut costs and save too.  Because if you can't understand how to live without, then earning more money will not help you at all, because your costs will rise with your income.  In fact, if costs rise accordingly, earning more may make things worse!

If you still aren't sold on saving, consider Warren Buffet's advice.  When asked what the biggest mistake people make with money, Buffet answered:

Well, I think the biggest mistake is not learning the habits of saving properly early. Because saving is a habit. And then, trying to get rich quick. It's pretty easy to get well-to-do slowly. But it's not easy to get rich quick.

That should give you an idea of just how important learning how to save more money every month is!

Keep Track of Everything

One of the biggest restraints that keeps people from saving money is that they don't know where all of their spending is coming from.  If you don't know where the leaks are coming from, how can you try and fix them?

Therefore the first thing you should start doing is tracking.  Track all of your bank accounts, credit card balances, cash on hand, everything.  Make sure that you know exactly how much the balance of each account is at any given time.

Adjust these balances daily.  Whatever you spent on lunch, the gas you put in your car, the cell phone bill you paid, everything.  Do not forget to do this, as forgotten purchases are what holds back so many people when it comes to their personal finances.  They spend money and forget where it met to, and don't realize where their important areas to focus on are.  After tracking your balances for a couple months, you will have a good working idea of where that paycheck goes and gets split up, and you can start making some serious progress.

Focus on the Big Wins

Perhaps the best piece of advice in bestselling author Remit Sethi's book I Will Teach You to be Rich is to focus on the big wins.  In a book full of some of the best personal finance advice you will ever read, concentrating on the big wins just might be the biggest takeaway.

What does this mean?  It means worrying about the biggest expenditures and trying to save money on them first.  Often times when you read newspaper articles or Yahoo Finance advice written by people who aren't that well off themselves, they will tell you to do things like "Stop buying the $3 Starbucks coffee" or "Skip desert when you go out to eat".

While it's true that doing things like this will help you save money, it's also advice that no one wants to follow.  Instead, start focusing on areas that you can improve on- the big wins.  Things like your mortgage, your car insurance, your cell phone bills, your cable bill, internet bill, etc.

For instance, if you only watch TV for baseball for football, you may want to consider just buying a premium yearly subscription for MLB or the NFL.  You can stream all of the games in high definition, even the ones you wouldn't get on cable.  And instead of paying $50 a month, you are paying $150 a year.  It would take about 2 hours to buy a subscription, set up the new package, and cancel cable, and it could save you $450 a year.  Would you rather have 5 months of not getting your morning Starbucks coffee, or spend 2 hours ridding yourself of mindless reality shows like Keeping Up With the Kardashians.

paying bills

Likewise, often times you can save money and lower monthly bill payments on things like your car insurance and internet by just giving the company a phone call.  Look up advice on what to say when you call.  Many times by telling your internet provider that their current rates are too high and you are considering going with a competitor will get them to drop costs.  With car insurance, you can shop around to get a quote for a lower monthly rate, and then cross-shop between your current provider and a competitor.  Or, take advantage of promotions that your car insurance offers.  You've seen the commercials where people get checks for being safe drivers, or discounts for getting your family on.  You've probably heard about deals where you can lower your insurance by 10% by passing some test.  Seek these promotions out, find out if they work for you, and take advantage of them!

It takes a few minutes to do things like this, and save hundreds of dollars, but most people are too lazy to just pick up the phone and give it a shot.  Don't be one of those people that just sits back and signs off on whatever bills are given them to you.  Stop being scared to make a phone call and ask for what you want.  You'd be surprised at how many companies are willing to work with you.  This is truly the real way of saving more money- stop being passive and start being active about your personal finance and where all of your cash is going.