Do you find it impossible to save money? I am talking about saving for true financial independence. Stay tuned as I will be revealing 5 easy to implement strategies to start saving money today. Today we are going to be talking about one of my most favorite topics, learning how to save money faster and easier than you ever thought possible.
I promise you, if you apply these 5 strategies into your life, you will start to save more than you could ever believe, so let’s get started. To start right out, the first point is to make sure that on every payday you become a bill in your expenses. This expense will be called pay yourself first.
This way you get used to putting away for your future self. If you can manage it, see if you can slice out 10% of your gross wages. If that’s a little too much initially, see what you can slice out for yourself.
Even starting at $100 a paycheck is better than nothing. As you get used to slicing this amount out and no longer miss it, start to slice more with the goal of getting to that 10%. If you can do 10%, challenge yourself and slice out 15%.
The more you slice out every payday brings you to your financial future independence even faster. Make sure that these funds are completely removed from your normal bank accounts. If you don’t know what to invest into, then move this money over into another account or even better, into another bank to make it much harder to touch when it comes to emergencies or just general spending.
This brings me to my second point. Start with building an emergency fund. The initial pay yourself first money can be allocated to your emergency fund.
Like your pay yourself first fund, you move it into a separate account. Again, this money is only for drop dead emergencies and a new iPhone is not an emergency. It’s only for emergencies and I’d recommend saving at least $1,000.
Eventually, continue to add to this fund over time and save at least 3 months of your minimum living expenses. This way you can cover an emergency like becoming unemployed. Hey, it happens.
Personally, I’d like to recommend a long term goal of saving at least 6 months of your expenses as this does provide a better buffer. Point number 3, and this is a big one. Learn to start challenging your lifestyle habits.
We develop a lot of habits that impact our spending and these are the ones we need to focus in on. Don’t depend on shopping to make you happy. I’d have to say that over 90% of the population does this, me included.
Find other ways to fill your time. With today’s conveniences, it’s so easy to have free time and thus time to fill. A default habit is to go to the mall.
Find other ways to fill that time. My next point will give you something to fill that time with.
Point number 4, the number one thing to increase your earning potential and thus your ability to save is to pick up new valuable skills.
This could be a quick weekend course, a new business book or a more formal long term training. The whole idea is to make yourself more valuable in the workplace. I’ve done this my whole life and I believe it’s the one thing that’s taken me from earning slightly better than minimum wage and being in the top 5% of wage earners in Canada.
So if you have free time, maybe invest into a course that you can work on that will challenge you and even more, get it done. Remember, a course that’s half done may be worthless. I remember when I was working towards one of my network engineering certificates, you don’t get that certification until you’ve passed all the exams, seven grueling exams.
I was missing one exam and I dragged my heels on that stupid thing for nine months to get it done. At that time I was earning about $19 an hour and even then that was very little. I became like a pit bull on a pork chop and studied so very hard for that exam and I literally just passed it with just a few points.
The person who had administered the exam came to me after and congratulated me because as I was a full network engineer, even though I only passed with just a few points to spare, I still passed the exam. Well, what was the end result? Within a month I found another job in my new trade that paid me $30 per hour. We felt like we were rich and I was hooked.
I’ve continued to learn and upgrade my skills and now I can command $90 or more per hour. Point number five, another way to increase your bottom line starting tomorrow is to challenge every single expense that you pay from your paycheck. Is it necessary? Do you need it? Can you do with something cheaper? The whole idea is to ensure all expenses you must pay are just that, they must be paid.
When I became ruthless with my expenses I was able to save over $1,400 per month. Yeah, you heard it right. Also be sure to check those expenses that come off your credit cards.
This is a sneaky one and it’s one that’s easily missed. This way I was able to go from saving $400 per month to now saving over $2,800 per month and I’ve applied all the points I’ve mentioned but it is possible is my point. Recently I was talking to someone who felt that they were saving but it wasn’t going well.
I did all of the above with them and I built them a plan where they could save $1,000,000. You heard it right, $1,000,000 in 10 years. It’s crazy what you can do when you become laser focused.
Be sure to put into practice all of these points into your life. They can take you from living paycheck to paycheck to living in financial independence and let me tell you, financial independence feels really good. I’ll just leave it at that.
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