There's a lot of advice on the Internet about saving money. Not quite in the same league as cat videos, but still a lot. Broadly speaking, most of it falls into two categories. One is saving in the big-picture, retirement sense. The other is saving in the day-to-day frugality sense. Of course, the more frugal you are on a daily basis, the more money you'll have to invest for retirement, so the two complement each other. Observing a few simple rules will help with both.
Track Your Spending
If you're serious about saving money, you absolutely have to keep track of your spending. Set aside a time each week to review your receipts. Watch for problem areas where you're spending too much, and brainstorm ways to reduce spending on non-essentials.
Plan your spending beforehand whenever possible. Take time each week to talk about what bills are coming due, and any purchases you need to make during the next seven days. Discuss how much you can put into groceries, gas and other necessities.
Allocating the money for bills, groceries and everything else can be a struggle, but don't forget to pay yourself. You need to have some money for emergencies, and you need to have money to invest for your long-term financial goals. Pay yourself first so you can add to your emergency and savings funds, then figure out how to stretch your paycheck to cover everything else.
Seriously, this is a big one. Buying ingredients and cooking at home on a regular basis can be a whole lot cheaper than going out or buying prepared foods. You'll eat healthier and save money at the same time.
Do some research before you whip out your money. Comparison-shop online, and look for coupons or discounts. Many retailers let you sign up for e-mail alerts when products you're interested in go on sale. Don't be shy about calling around for prices, either. You can phone a lot of stores in the time it takes to drive to one. Just make sure that you use the coupons for products you actually need. Don't get drawn into the habit of spending money on something just because you can get it at a discount.
Think On It
Agree on a timeframe to think about purchases, especially major ones, before you make them. Avoid impulse purchases by taking a month to weigh the pros and cons. Ask yourself if you really need that item or whether it was just something you thought would be nice to have.
Being disciplined with your money feels good, but remember to have some fun, too. Find things you enjoy that don't require a lot of money. If having a few bucks to spend impulsively makes you happy, build it into the budget. Reward yourself with a few well-chosen pleasures and you'll find it easier to stick to the rest of your plan.
- The Wealthy Barber; David Chilton
- The Wealthy Barber Returns, David Chilton
- Jupiterimages/BananaStock/Getty Images