Everyday Cheapskate: Broke? Can't Save? Oh, Yes You CAN!
How's your health? Not your physical fitness, but your financial well-being. For most of us, how much we earn tells us how we're "feeling" financially. But your income is only one part of the equation. How much of your income do you actually keep?
Not very much, I'll bet. Your income is low, you say; you've got bills to pay. Rents are sky-high; grocery costs are through the roof. Who can possibly save?
My answer: You can. Yes, you can save money!
COME ON; JUST DO IT
Want to save $1,000, $3,000, $5,000 or more? I'll help you get there. Every day, my mission is to encourage you in myriad ways to spend less and save more. I know that you can do this! So, let's get started.
PICK A GOAL
Saying you want to save a million bucks is admirable, but let's face it: That is not reasonable. To reach a goal, you need to make it specific, realistic and measurable, something like, "I'm going to save $500 within the next five months by transferring $25 every Friday to my savings account." Much better.
Most experts agree you need an emergency stash equal to at least three months' income -- your net take-home pay. Does that seem impossible? For now, why not set your goal as the amount of one paycheck? That's an amount just about everyone can scrape together with enough determination. When you've done that, try for two paychecks and then four. Soon, you really will reach that three-months' goal.
NEED SOME MOTIVATION?
Get visual and hang up a picture of the item or event you're saving for. If you'd just like to have some money in the bank, make a calendar to post on the fridge, and check off all your savings deposits. (You'll be amazed at how great you'll feel writing those down.)
If you're going to commit to the program, this is the most important thing to know: Pay yourself first. Before you pay your bills every week, before you buy groceries and gas and clothes for the kids, you've got to put something into your savings account. Even if the amount is sometimes less than you were hoping to save, set it aside anyway. As long as you're headed in the right direction, even the baby steps count.
WATCH IT GROW
Don't just stash the cash under your mattress! Open a savings account where it will be safe, and you can watch it grow. But more importantly, it will be safe from you! And as you add regular deposits, you'll see it grow.
Here are five things you can start doing today to save money:
NO. 1: SELL OUT
Go through every cupboard, closet and drawer. If you aren't using it regularly, get rid of it on eBay or have the mother of all yard sales.
NO. 2: GIVE IT UP
If you're going to take this seriously, you've got to say goodbye to that little vice (fancy coffee drinks, cigarettes, candy bars, bottled water). It can really add up; saving $5 a day gives you $1,825 a year.
NO. 3: THINK TWICE
I came close to paying full price -- $100 -- for a replacement charger for my phone. But the thought of spending that much money gave me a rash and sent me to eBay. In no time, I bagged a regular charger plus one for the car for less than $10 with shipping. Need something for one-time use? Borrow it from a friend or neighbor (and encourage them to do the same).
NO. 4: CUT THE CARDS
You use plastic to pay for stuff because it's convenient. So, stop using it. It shouldn't be so convenient to spend your money. Curb all those impulsive purchases. That's a lot of money you can free up for savings.
NO. 5: BANK THE RAISE
The next time you get a raise (or bonus), save at least half. Let's say that raise improves your monthly take-home pay by $200. If you save half and do that for the next 10 years, that money you didn't miss (because you never saw it) will grow into $12,000, and that's not taking into account any interest you might earn along the way.
Here's the thing about saving: At first, it's going to feel like a hardship (like dieting, all you can think about is what you can't have). During my worst years, when I was spending with reckless abandon and racking up debt, I would have told you with all sincerity that we didn't have enough money to save.
But once I jumped into saving (just a few dollars at first), something amazing happened: I began to feel a new sense of self-worth, dignity and calm. The more I saved, the better it felt. The better I felt, the more I wanted to do it again and again. And again. This will happen to you, too.
And as you watch your balance grow, prepare for a surprise: Saving will become addictive. Try it. Save money. See if it doesn't become habit-forming.
Mary invites you to visit her at EverydayCheapskate.com, where this column is archived complete with links and resources for all recommended products and services. Mary invites questions and comments at https://www.everydaycheapskate.com/contact/, "Ask Mary." Tips can be submitted at tips.everydaycheapskate.com/. This column will answer questions of general interest, but letters cannot be answered individually. Mary Hunt is the founder of EverydayCheapskate.com, a frugal living blog, and the author of the book "Debt-Proof Living."Copyright 2021 Creators Syndicate Inc.