Savings is income not spent. There are numerous saving methods. Methods of saving include putting money aside in, for example, a deposit account, a pension account, an investment fund, or as cash. Saving also involves reducing expenditures, such as recurring costs. How do you start Aggressively Saving? That may be a new and very scary concept for most people, but with a clear cut plan, it can be eye opening and necessary. If you want to be able to save more, there are three choices:
1. Spend Less Money
2. Earn More Money
3. Some Combination of the Two
To aggressive start saving, you MUST cut spending. There are so many ways to start achieving that goal. Here are some to get you going on the right path.
- Conduct a spending audit with your personal/miscellaneous expenses. I think most people have a good idea of how much they spend on food, shelter, transportation, and clothing but have no idea just how much they are spending on everything else. A great place to find low hanging fruit is by conducting a spending audit on the places you like to go and the things you like to do. From expensive hobbies, traveling, entertainment and gifts, these types of places where we spend money can add up very quickly. Am I saying that you shouldn’t spend money on fun? No, but I am saying that you need to identify just how much you are spending and then decide on where you can cut back. For example, if you like to golf every weekend, consider going out every other weekend. If you take two big trips a year, consider cutting it down to one.
- Cut your housing expenses by 15%. It is the largest expense for most people. It is also one of the broadest spending categories. Mortgage payments or rent, homeowner’s or renter’s insurance, utilities, phone, internet and cable TV are some of the expenses you likely have. You may be able to save hundreds of dollars each month by shopping for a cheaper mortgage rate. If renting, consider moving to a smaller, less expensive place. Think about cancelling your cable TV, getting rid of your land line if you have a cell phone, and trading your cell phone plan for a prepaid plan if you only make occasional calls. By just reducing 15 percent of household expenses, the average household could save approximately $3,700 a year.
- It’s OK to say NO to your children and grandchildren. I have always joked that as soon as kids are out of the house, you will have a money tree at your disposal. It is a joke of course, but truthfully, if you are supporting children, grandchildren and even other family members, you will never be able to save quite as much as you would expect. Some times it is inevitable and you are willing to help. Some times its just about that time that you cut the umbilical cord. I understand that I may have offended some by that statement, but if you are serious about wanting to save aggressively, you must be able to spend less. Spending money, cell phones, car insurance, gas money and car payments are a few things you may be supplementing for a child or grandchild that you might consider cutting out or at least reducing. Wanting our children and grandchildren to have everything we didn’t have growing up may make us feel better, but it could be hazardous to our wealth.I have always said that spend, spend, spend may lead to the poorhouse and save, save, save may lead to resentment. But if it is crunch-time and you are serious about saving aggressively, in order to save, save, save, you have no choice but to spend less, less, less!
- The concept may be new to some .It is often very difficult and without a structured plan, it’s easy to get deterred. Most live paycheck to paycheck and may not have the luxury of saving. Try to find quick ways to cut back . Whether it be limiting your Starbucks run to once a week instead of going there daily. Every little bit helps. All too often you spend as little as $5- $10 per day on arbitrary things that you may not need. Before you know it, that equates to hundreds or even thousands of dollars per year.
- Part of your aggressive savings plan may be to make more money. Some people live check to check and often have nothing left to save.There are many ways to try to earn more money. Some of those ways are going back to school to obtain another skill or degree which can put you in a more competitive role in your field of work. There are also lots of side jobs that you can take to try to supplement your income. Some of those include working a second job on evenings or weekends. Start online working to include affiliate marketing, opening an Etsy store, starting a blog, write a book etc.
Others start aggressively saving because there is a large expensive purchase that they need to start saving for immediately. This can be a wedding, dream vacation, home, car etc. Others aggressively save because they’ve been so frivolously spending that its time to cut back…way back. Its always important to build and keep savings. Once you’ve started these simple tricks of cutting back and actually start saving some money, you can actually use that saved money to work for you. Investing those savings proves very beneficial.