Tuesday, August 28, 2007

How To Save Money

Every one of us has a need for money, and only hypocrites will say money isn’t everything. Sure, it isn’t everything, and money isn’t exactly happiness at all, but as the old saying goes, money can buy you marshmallows, which is like happiness itself.

Hey, it’s the 20th century, and if you’re unlike me living in a world where almost anything involves money, then this article is not for you, but take sometime to read anyhow.

Here, I will be sharing with you guys the practical ways of how to save money. You can compare saving money to quitting smoking. It’s not that easy if you’re not serious, and if you don’t put your heart into it.

A lot of people would want to save money, but it never happens. Why? There are a lot of reasons for that. For one, people just thinks of saving money, but they never get to the part when they need to act. Saving money doesn’t necessarily mean higher salary equals higher savings.

A higher earning is only one part of the equation. The other part is managing your actual earning.

How to Save Money: Managing your earning

So what do I mean about managing your earning? What I mean is get to know your current lifestyle, and analyze where you’re putting all your earnings. Most people don’t actually know what it takes to live, so even if they go and live independently, they find it so hard to save money. The key is to spend less than what you earn, and only spending on necessities.

So what I want you guys to do for me is sit down, list all your monthly bills, all your outgoing cash flows, and list what you currently earn. If it looks bad for you, then have a way of making it look better.

Ask yourself who you are, and consider what you earn. Think about how you use your money, and is your current lifestyle is your ideal one. Then think of how you can maintain the best of your current lifestyle by spending less.

You can think of this as “the greater the sacrifice you will give, the greater the fruit your earning back.” Also, whatever amount you’ll be saving is still your cash. So you don’t have to feel guilty cutting off your McDonalds visits, because in the end, you have all the money to spend for those curly fries and Big Mac.

Let's get it on! Teach me how to save money!

If you reach this part of the article, then I suppose you’re actually willing to save money and sacrificing your casual McDonalds visits. You’ve actually set yourself an admirable goal. I hope these suggestions help you.

  • The Ask-Yourself-Three-Times rule before handing your money to the pretty cashier.
    This is what I usually do before I buy anything. I ask myself first three times before I spend my money. Or let me put it in other words,

    Try to slip the chance of spending three times before you actually spend.

    Sherlock Holmes Let me share with you my experience just last week. There’s this book that I was planning to buy from a bookstore. It was Sherlock Holmes by Sir Arthur Conan Doyle, volumes one and two. It’s a classic, complete novels and stories of Sherlock Holmes, and a definite read in my own opinion, definitely worth every buck. And it’s very cheap.

    For three days, I stop by this bookstore and hold this book, reading the tempting summary at the back cover while thinking, am I really sure to buy this? Do I have the time to read it or I am just being tempted because it’s another detective novel? Whatever answer I come up with, I’ll place it back to the shelf. I do this three times, and if on the third, I still think I should buy it, and then I’ll buy it the following day (since I don’t usually bring more than enough money with me on ordinary days).This way, I can limit myself to buying only those things that is of the highest interest for me, and avoiding spending money on unnecessary stuffs.

    Also, try to search things first on eBay or other places on the net, and see if It will be cheaper. I don’t mind used books, as long as they look good and there are no torn pages. What matters in a book are the contents anyway.

  • Have an emergency fund.
    Before you immerse yourself into the world of saving money, you need to have a form of stash (in most cases, it’s a piggy bank). This is where you hide (deposit if you opt for a bank) all your savings from all of the work you’ll be doing. How will this help? Example, you’re a working student, and you balance your monthly allowance evenly. Then comes this educational trip, prom, or any money-involved scenarios. Chances are your going to depend on your credit card, or borrow money from a friend, which is a definite no-no in the world of saving. Remember that we are trying to limit as much out-flowing-cash.

    This is where your piggy bank will come to save the day (usually comes in flying in red cape with a ‘Meat Inspection Passed’ tattoo on its right arm, err, foot).Ok, let me take back my word on that, don’t use piggy banks, cause you’ll need to break them in the end. Save your money in the bank, and if you succeed in saving, your money is going to earn some percentage, which is a treat. The bank helps you save your money, and in the end, it gives you a reward! Funny isn’t it?

  • Don’t bring more than enough money for the day.
    Bring just the right amount of money you will need for the day. Also try to leave your credit card at home, or most of the time, particularly when you go out.There are usually things around us that will take our attention, like a new book perhaps, the latest Harry Potter, A cool tie with Spongebob in it that will definitely turn heads, and lots of other cool stuffs (if you consider a Spongebob tie cool). Chances are, you’re going to buy them, particularly those persons with the philosophy “I will buy whatever I like today, rather than come back another time when somebody else got it” (by the way, I’ve heard this from friends, whom by chance, are rich actually).

    But what happens most of the time, we regret buying them. That’s the cause of a number of garage sale, they sell out things they don’t need, and tell you “this item hasn’t been used that often, and it’s a great buy”. Of course, you’ll earn back some of your money with garage sale, but why end up in garage sale, when you could have controlled your itch for spending money and saving it?So the easiest way to spend less is only taking enough money with you to make it through the day.

  • Cut the cost of your gas bills.
    As the global demand for fuel increases, the prices are rising. But this doesn’t mean you need to freak out. Try cutting out your driving days and get yourself used to public transportation. If you are living in a city, chances are there is a good form of transportation you can use. Use your car only on days that you really have to, like long trips, family outing, etc. This will also save you cost for maintenance!

    An Inconvenient Truth Or why not be different; buy a decent bike you can use to go to work. This is cool when you’re just around the city, particularly when your job doesn’t require you to wear too formal attires. On China, its very normal for the streets to be filled with professionals in bikes! Cool huh? And it even helps protect the environment. Remember the video Inconvenient Truth, which tackels Global Warming? This video about Global Warming has a very touching quote in the back saying “You owe it to yourself watching this video”. Knowing that a lot of cities and Islands with living people will suffer, I recommend you spend some of your savings to watch this.

  • Work hard and get promoted!

    ”Hey, I thought you said higher earnings don’t necessarily mean higher savings”.

    Yeah I did, but what I’m actually getting at here is that, whatever your increase in salary is, make sure you save them, and not increase you budget for the month.

    ”You’re too cruel!”

    Am I? Hey, you’ve been living frugally in the past weeks right? I suppose you are getting use to it somehow, and that your raise is a definite plus in your savings.

  • Take your time at the groceries.
    When I do my groceries, I usually take a lot of time comparing the product I’m buying for the first time. Take peanut butter for example. When I first buy peanut butter, it took me 30 minutes comparing the different brands, comparing their nutritional facts and prices, and deciding what is the cheapest but actually worth my money. The next time I buy a peanut butter, it usually takes me 10 seconds.

    Oh wait, don’t get me wrong. When you go to the grocery store, go directly to the section your buying your item, and once done, head to the cashier fast. When you take too much time in the grocery wondering on different sections, tendency is your going to pick up at least another thing or two, which you actually don’t intend to buy in the first place.

  • No such thing as “Thank God its Friday”
    Do you realize how much a beer cost, and the difference in prices depending on the bar your in? I don’t drink, ok, very occasionally when I couldn’t come up with a good excuse to turn down an invitation. But cutting your beer-moments can save you a lot.

    Let me have my rant for a second here please.

    What’s with beer and alcohol that makes 8 out of 10 people drink them?! They taste bad; they have such strong taste and a bitter flavor, almost as strong a bitter gourd herbal supplement for diabetes! They cost too much for such a bad drink and they get you drunk by the end of your drinking session. Making you feel dizzy and all sorts of inconvenience!This is one of the mysteries of life I have yet to uncover!

  • Speaking of vices, did I mention smoking?
    Again, let me rant.

    Aside from the proven medical sickness your in, the guilt and the smell, and the inconvenience your giving to the one standing next to you who don’t smoke, your actually spending a good figure of money a year for something that doesn’t give you anything.

    And do you know, in our country, the government is spending more than trice the amount they are earning from importing cigarettes for treating the hospitalized smokers who got sick. Can you believe that! They are actually spending some of my precious tax to smokers who caught lung cancer and tuberculosis.One piece of advice my friend, Quit, and save money.

  • My personal, proven theory on lottery, it always doesn’t pick you.
    Come on, get real. The pot money is really tempting, but the chance that it lands on your hands is like an arrow pointed at an apple on your head, and you don’t get hurt. Give up the “what-if” spirit, you aint living in a fairy tale.

    (Between you and me, I'll share with you a secret, I'ts alive, the lottery spirit is real! It sees you when your watching the tv while you're praying the machine pick your numbers! And it enjoys watching you curse as it manipulates the machine not to pick any number on your ticket! I tell you! It's an evil spirit!)

  • Never spend your change.
    Make sure you save every change you have and place them in a piggy bank. Sorry no piggy bank. Anyhow, whatever change you save, make sure it reaches your bank account at the end of the month. Or better yet, try those "$5 Bucks a Day Keeps the Doctor Away" trick. You'll be sure to have at least $1,825.00 after a year!

There you go folks, the first round of how to save money tips. I’ll be posting more of my money saving tips on the following days. Saving money is something every one should be practicing actually, particularly when you’re trying to go independent, or you’re having a hard time budgeting your family’s allowance.

How to save Money: Final Reading

If you’re really serious, try to read books about saving. The Complete Tightwad Gazette by Amy Dacyczyn is a great read, a complete compendium of tightwad tips for fabulous frugal living, and a very helpful one for me. Trust me when I say you’ll be earning back whatever amount you’ll be spending for the book in no time. But don’t just take my word for it, read on its comments and discover hundreds who loved it!

Good Luck guys!