How I did it: My savings plan reflects the lifestyle I'm happy to adjust to, and the sacrifices I'm willing to make.

1. Open up a savings account to your main bank account - one that lets you set up an automatic fund transfer. I began with $100 out of my fortnightly pay, and have gradually increased it to $500.
2. I have no credit cards, only a Visa Debit (so I can use online credit card facilities).
3. I created a loose budget. I have to constantly adjust it, and don't always stick to it, but I think the more I try to keep it a priority, the more success I'll have with it.
4. I try to live below my means. I try to find other ways of getting things I need or want, or else I readjust to not having it. For instance, for a long time I've been wanting to buy a nice piano, but I also want to go traveling overseas. I don't earn enough to accommodate both goals, so I am only committing to my travel goal for the time being. I've taken up hobbies and interests that don't cost much. But when I want to buy a heap of oil paint, I sacrifice the money I could spend on things like clothes, a night out, etc.

Lessons & tips:

• If you skip your savings plan one week, or splurge, try to sacrifice something out of your next pay to make up for it.

• Learn to take your time before spending money. Think about big purchases for a while, and small purchases too. Do you really need it? Will you honestly make use of your new purchase? Could you find it cheaper? Could you borrow it from someone else?

• Be resourceful in all areas of your life that you spend money: for grocery shopping try cutting out some more luxury or gourmet foods and meats and find new ways to make delicious meals out of cheaper ingredients, and also buy less premade food and takeout; transport - car pool, cycle, walk, or take public transport; entertainment - dinner parties at home, borrow movies and books from the library, picnic at the beach...etc, be creative

• Live within, or even below your means. Stay away from things that make you want to spend your money. Find other ways to have fun, feel good, and share your life with people - that don't rely on spending money.

• If there is something that you really want to purchase/spend money on, try to find some other way of getting it other than using your main income. Could you trade or exchange your time, skills, unused goods? Sell something you no longer need to raise cash for it? Borrow it from someone? Earn some money from a little side earner to pay for it?

• You have to spend some time working on how you make money, spend money, and think about money. Always take some time to consider your spending habits, the products you purchase, and why you purchase them. Look around your home and identify things you've spent money on that are not really used. For example, I have spent money on a pile of nice fabrics, sewing notions, and metal purse clasps thinking I'll make a dozen purses to sell, but they have been sitting in the corner for a month now, and I feel like it's wasted money unless I hurry up and actually use it.

Resources:

• Do research on the internet for budgeting, savings plans, personal finance....
• Alternatively, borrow books on personal finance, money etc, from your local library.
• Find budgeting, finance tools and applications on the internet, that you can use on your computer.

Jun 15, 2009, 08:28AM PDT | 0 comments | 3 cheers