How to save money

If there’s one thing everybody wants to do, it is save money. Saving money is two fold. The reason is because the opposite of saving is spending and most people spend money well. To save money, you must spend less and subsequently put what you’ve saved somewhere it won’t be spent. This is easier said than done, but self-discipline and a commitment to changing old habits can result in savings for anyone.

Begin by tracking what you spend for a month’s time. Write down everything you buy, how much it costs and then analyze your spending at the end of the month. Separate your expenditures into two categories: necessary and frivolous. Be critical in this area as many people’s idea of what is necessary is convoluted. You must decide if it is truly necessary to spend $200 on groceries every week or whether a $150 phone bill is really necessary.

Once you have identified where frivolous spending occurs, decide where you can comfortably scale back. This does not mean doing away with everything that is not necessary for basic living, as that would quickly cause you to harbor resentment for saving and inevitably cause failure. It does mean if you can find a way to spend $50 less each month on groceries, clothes, fast food, or some other area where you won’t miss it, you can then save that money.

Once you’ve identified how much money you can save and where the money will come from, you must be disciplined enough to put that money somewhere else. Set up a savings account where you can put that money. Do not use an account that includes a debit card, checks or any other way of conveniently withdrawing and spending the money. Set a long-term goal, such as $500; when you have reached that goal, invest the money in a short-term savings plan such as a 12-month CD.

When the habit of saving money is developed, you will be amazed how easy it really is. You will also be amazed at how quickly savings can add up. If you find that you have attempted saving money in the past without success, try setting up a savings account that you treat as a bill. Some accounts will automatically withdraw money each month from one account and electronically deposit it into another. Consult an account specialist at your bank if you need help.

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