It Only Takes a Few Dollars
It's the end of the month, and you've just finished paying your
bills--rent, insurance, credit cards, utilities, car payment, etc.
After the bills are paid and your checkbook is balanced, you realize
that there isn't enough left over to put into savings. It's just
too hard to find extra money to save, so your savings plan will
just have to wait another month.
Sound familiar? Although this situation is common, financial Freedom
can be built on a very modest income and saving money is much easier
than you think. What it comes down to is knowing how you spend and
learning how to spend less than you earn.
Little things add up
Many of your monthly expenses are probably fixed--such as rent,
mortgage, car, or student loan payments--but it's the variable expense
category that can easily get out of control. It's easy to fall into
the habit of buying a daily coffee and bagel, magazine, or new CD
because individually they don't cost much, but these small expenses
quickly add up.
Say you spend $3.00 on a coffee and bagel every day; in a year,
that daily $3.00 expenditure adds up to almost $90 monthly and $1,100
annually. So called 'little' things can quickly add up and cost
more than you realize.
Everyone can afford to save money
Finding money to save is easier than you think. If you decided to make your own coffee and bagel in the morning, you could save that $3.00 a day and put $90 dollars into your 401(k) or IRA account monthly. The sooner you start, the faster it all adds up.
Control your money
Of course, no one is recommending that you eliminate every indulgence
because some of these small expenses enhance your enjoyment of life.
But everyone makes purchases they could reduce to help reach their
financial goals. Here are some ideas for controlling your money:
- Write down each expense. Try it for a week and keep a
record of absolutely everything you spend. You'll begin to see
how little things can add up.
- Only pay cash. It's a lot harder to hand over cash than
it is to use plastic so try this approach to cut down on impulsive
- Wait a day before buying anything over $100. If you really
want something, then you'll return to the store and buy it. But
there will be times when you decide not to make the purchase and
you'll save yourself $100 or more.
2 of 8: Putting Your Money to Work
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