How I Started Saving a TON of Money
I didn’t grow up with best education when it comes to money. I learned how to write a check in the 5th grade and besides that I never learned a single thing until I started college in 1997 and got my first credit card which led to another card and then someone (that shall remain nameless) getting a card in my name (make that two) and then kiss my credit history GOODBYE. From that moment on I became completely frightened with the idea of actually knowing my bank account balances (I’d always wing it). I would never even THINK about looking at my credit and if anyone called to collect money from me I’d say “wrong number” or just hang up. I hate to admit this but for the most part I didn’t KNOW any better.
I started slowly with money. I bought a book by Suze Orman, “The Money Book for the Young, Fabulous & Broke.” There are much better books out now I’m sure but at this time this was the only thing I understood. Just search for books on money so that you have basic KNOWLEDGE.
Once I got some general knowledge I figured out how to establish my new $0 balance. I stopped letting my account get down to absolutely nothing and started setting the new (don’t spend another dime) zero balance at $200 and then $300, next $500 … You get it. Once you hit $5oo, you’re broke. No going out, no spending past that, you’re done. That number can eventually get to $1,000 and more with the right mindset. This keeps you safe. You’re never fully out there with your pants down with SOME money in your account.
Once I established that principal I started saving. It was SO HARD for me to save so I set up an auto-savings account. I started with $50/week. I didn’t even notice it. Before I knew it I was saving $200/month effortlessly. Without even thinking about about it I had saved $2,400 in a year. With $2,400 you can do a decent vacation, pay the graphic designer for the logo for your business, buy your site on GoDaddy, invest in a key wardrobe piece that makes a professional statement, take some of your favorite business peeps to fancy dinners to pick their brains, go to a conference that will enhance your professionally … I could go on.
Next thing you want to do is think about emotional spending. How many things do you buy because you want people to think you’re “doing good?” Cut that out. If your car works (even if it’s not cute), keep it a little longer. If you just HAVE to look cute in a car, rent one for the weekend. Try repeating the same outfits often, you’ll notice that NO ONE NOTICES. People don’t notice your clothes as much as you think they do (and if they do, who cares?). Cut out the clothes and purses and knick knacks and don’t buy anything for your wardrobe for 6 months. Notice how creative you get.
Start getting rid of things. Purging was a way that I learned to diminish my attachment to THINGS. If I haven’t touched it in a year BYE BYE. Give away a box of “stuff” every weekend. You’ll start to notice that you have a lot of things that you don’t really need. I’m not saying empty out the house but clear out the clutter, it will change the way you “shop.” Now when I go shopping I think, “Am I going to use this in the next 30 days?” If the answer is NO it can stay there. When I’m READY to use it, I’ll get it (unless it’s 75% off). Even then only add another 30–60 days. Even buying something 75% off that won’t be used in a year is a waste.
What are your favorite things? How can you do them (and enjoy them) for less? What do I mean? I LOVE books! LOVE. BOOKS. I spend SOOOOO much money on them so I do a few things. As often as I can I buy them used. When I can’t I use my Barnes & Noble Membership which guarantees me a discount. I love wine and I found the $4–10 wine at Whole Foods that is awesome and let’s not forget $2 Chuck at Trader Joe’s. The long and short is to just try to find out how to do everything you MUST DO a bit cheaper.
Next thing you want to do is TROLL your cell phone bill, cable bill, car insurance, etc. Any bill that you have OPTIONS on, give them a call today. It’s as simple as saying that you need to lower your bill … what can you do? I PROMISE doing this will save you on just about every bill. SHOP around! Saving $40 a month on a cell bill equals $480/year. That’s a flight purchased 6 months in advance across country or to Miami and/or Chicago for the year.
We will talk about credit next time. Let me know how these tips work for you!