As hard as it may seem, it is feasible to save every month regardless of your income level.
The other day, while discussing savings with an acquaintance, I recalled my college days when I had to deal with student loans. Especially, I thought about how I managed to pay it in record time when my income was not too high. Even though my income wasn’t consistent, I was extremely determined to pay off the loan. My hard work resulted in a complete repayment well before the expiration of the loan’s payment schedule.
How did I do it? I paid close attention to the small daily expenses; those tiny purchases really do make a difference over time. In the long run, these expenses don’t necessarily influence whether or not you become a millionaire, but they do help you get on the right track to pay off your debts.
Many families believe it is impossible for them to save, thinking it would put too big of a strain on their finances. It’s true that even though you aren’t going on vacations to exotic destinations or buying designer clothes, at the end of the month you still have nothing to spare. Where did all the money go? There is always some spending behavior to correct, all you need to do is identify it. That is why I strongly believe that you need to examine even the smallest of expenses. With serious analysis, we can detect weak points in our spending habits and stop them.
The problem is that these harmful spending habits are rooted so deeply and feel almost second nature that we barely even notice we do them. Even if we make a monthly budget, these types of expenses can go unnoticed. If all this sounds familiar, I have some questions you should ask yourself before you spend money:
Many of us need our cup of coffee in the morning before work and everybody loves those fancy drinks at Starbucks. But is it absolutely necessary to purchase coffee there? The cost of those lattes can add up surprisingly fast in a month before you even feel your wallet growing lighter. It would be much cheaper to have your coffee at home rather than spending five dollars on a flavored latte.
The opposite of conscious and calculated spending is impulse buying. If you see something you actually do need but didn’t plan on buying it, don’t buy it right away. Instead, go into some other shops or look online to compare prices and make sure you are getting the best price. With just a little research, you could end up saving almost 20% on the same exact item.
If you do realize that you need something, take the time to ask yourself if you need it right away or if it can wait for a short time until you get your savings started. Let me give you an example. My wife and I have been married for nine years and we have always wanted a large barbeque to put on our terrace. We decided to wait a while before getting the large barbeque and, instead, got a small portable barbeque that only cost 15 dollars to hold us over until we had more saved.
Often, we can think we desperately need a certain item when, in reality, we could use something much cheaper that we have just lying around the house. Sometimes you don’t need new furniture, you just need to move around your old furniture. Maybe you don’t need to purchase brand new home décor, maybe you can do some DIY projects instead. A very tight budget can force you to be more creative and, truthfully, that’s a great characteristic to learn.
Even if the purchase that you wish to make passes all the previous questions, at the end of the day you need to be able to afford the item and still meet your savings goals. If the purchase will keep you from meeting those goals, it might be necessary to go without. It might be difficult but asking yourself this question will force you to look for cheaper alternatives before spending your money.
There is always a way to save every month. Even if you are only able to save a few dollars here and a few dollars there, that will add up eventually if you stay consistent. All the money you save can be put towards a large investment, set aside for retirement, or used to pay off debts. Whatever you choose to use it for, you will be happy you did it.