How to save money by seekskeat

"Out of sight, out of mind."

How I did it: **The reason it took me 2 years to achieve this goal was because there were many smaller steps that I had to take beforehand.**

Basically, what it did was pay myself first.  Yes, I had wants and needs, but I had to prioritize which purchases were more important.  When I had credit card debt, I had to put that card aside.  I never paid just the minimum payment on my credit card.  I would pay as much as I could which was sometimes five times the minimum payment.  Once I got the cards out of the way, it was easy to save   I would put a certain dollar amount straight into my savings.  If I couldn't see that money, I wouldn't touch it.

I set small goals for myself.  In my case, small goals are more easy to achieve than larger goals because they are less overwhelming.  I started with paying off one card, then the next, and so on.  Then I tried saving 5 dollars, then 10 dollars, then 30% of my income.  Then I made a goal of saving a certain dollar amount by a certain time period. 

Lessons & tips:

  1. Put that money straight into a savings account.  I would recommend an online savings account that isn't directly linked to your savings account.  By using another bank for your savings account you aren't tempted to just put that money back into your checking (it is more of a hassle and takes longer for the transfers). 
  2. DON'T START PUTTING MONEY INTO SAVINGS UNTIL YOU HAVE PAID OFF YOUR CREDIT CARDS!!!!  The interest earned in your savings account is nowhere near as high as the interest you will be paying the credit card companies.
  3. Get rid of your entitlement issues.  If you feel entitled to live a certain lifestyle, that is fine.  However, if you have no money leftover or are putting your purchases on a card, you are sabotaging your financial future.
  4. Reassess your wants and needs.  We all have an infinite list of wants, but try to limit them and just focus on your needs.  For example:  Is internet really necessary in your case?  You might save 20-30 bucks or more if you use public libraries. 

Resources: Suze Orman, Robert Kiyosaki and other people who are financially successful.  Don't follow the paths of people who are the same or more worse off than you! 


12 people found this helpful
 

Oct 13, 2008, 11:49AM PDT | 1 comment | 4 cheers


Comments:

MKProtege

I agree with all of your advice, except for one part – I found it better to save money while paying off my debt simultaneously. The interest on credit cards, etc., is higher, yes. But, if I had savings, then when emergencies arose, I had the means to pay for it. I wasn’t just adding that balance to my credit cards. It kept my debt as a fixed amount that I could pay off in a specific amount of time, and I wouldn’t get discouraged by set-backs. I was prepared for them!

To each his own, though, and I certainly agree with the rest of your advice. I especially agree that having your checking and savings at two separate banks is a great idea, as long as you can still link them for an easy and convient transfer of funds to savings.

Feb 02, 2009, 08:55AM PST | Respond to this


seekskeat has gotten 4 cheers on this entry.

 

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