Let’s say you decided to save some money. You cut coupons, you get a cheaper cable package (or you just cut the cable altogether), or maybe you got a rise in salary and you decided not to inflate your lifestyle.
Now what? What are you supposed to do now?
If you are saving to try to fit your salary in your budget, than you just have to keep going and stop spending. It’s just too easy to reduce some fixed expense and then “reward” yourself with a dinner out later on the month because you reduced that bill. Don’t do that, be strong.
But if your main goal is to save more (in the sense of having more money somewhere for a specific goal), then your job is not done here, sir. I’ll show you how to really save money, once and for all.
Once and for all
Let’s take the cell phone bill as example, because I did exactly this last month. I called my phone carrier and said “I want my bill to be lower”. Then, as it was Black Friday, I got a nice promotion: my very same plan for $10 less. Score!
As soon as I hung up the phone, I went to my bank’s website and scheduled a nice $10 monthly transfer from my checking account to my savings account. And THIS is even more important than calling the phone company and asking for the discount! If you fail to complete this step, you can try to save your entire life and you will never succeed!
Why?
Because this extra $10 will stay floating around your bank account and you will eventually spend it! And then you will not save for retirement or that trip you are desiring for so long.
But, Daniel, I cannot do anything with $10 nowadays. Ok, so do you prefer to just give them to your phone carrier? I’d rather see my savings account growing each month, even if it’s only by $10.
But really? $10? Keep on reading…
My employer started paying more or less half of my monthly transport card. I still have to buy it every month (or subscribe to the anual plan) and then I get a refund of $33 in my pay-check. Guess what I did?
Correct! I set up an automatic transfer to my savings account to coincide with my pay days, every two weeks. Now, with the $10 from the cell phone plan, it’s $43 more into my savings every single month. What about it now?
It means, if I am looking at a short time frame, consumerism way, that I can buy myself a new Playstation4 next Christmas. Got our attention now, right?
It means that you can pay $43 more per month on your mortgage or credit card debt. By putting only $43 more every month towards your 25 years mortgage you can pay it off in 24 years! You will be debt free one year sooner!
And what to say about a rise in salary? Why not put this into savings too?
I know you are thinking “But I DESERVE to have more because I make more money“. You are right. Just answer this: do you NEED more right now?
What you can do is put part of your rise into savings. This way you are happy today and your future-self will be happy too, thinking “Man, I am glad I’ve read Dan’s post several years ago and he told me to put part of my risings onto savings”
You are welcome! Send me a cup of coffee from the future ;)
Photo by J.H.
