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What if the next time your car needed a repair, you had the cash ready to go?
Here are 8 ways to start saving money right now. If you follow these steps, then three months from now, you will be on your way to a much brighter financial future.
1. Make a realistic budget to start saving money.
Realistic is the key word here.
Yes, be frugal. Yes, make cuts. But make cuts that are possible, not cuts that will set you up for failure.
Changing the entertainment budget to eliminate eating out? Yes. Reduce the grocery budget to $50 a week for your family of four? Get real.
2. Cancel all non-essential recurring payments.
Does your daughter’s dance studio allow a one month hiatus once a year? Take it and save the $150.
Do you subscribe to Netflix and maybe even a couple of other TV stand-ins? Go ahead and cancel them. There’s another $20 or $30.
Be realistic. But be ruthless.
3. Pay every single essential bill on payday or sooner.
I’m going to tell you a scary story. Once upon a time, before I decided to take charge of my future, I paid several hundred dollars in bank overdraft fees on my checking account.
Every. Single. Month.
This is how it would go.
On the first of the month I would make my budget, set aside my spending money and quickly spend it up. Then I would be out of money until the fifteenth.
Except technically I still had some money left.
Because my car insurance payment and my student loan payment were on auto-pay.
And they didn’t come out until a few days before the next pay day. And so, every single month, I would withdraw that money, several hundred dollars, before it was drafted out.
And since the bank pays bills that are on auto-pay, even if that means overdrafting the account, the bills were always paid.
So I started the next pay cycle negative the amount of money that I owed for those two bills. And negative another $70 in overdraft fees. Which meant that I didn’t have too much extra money from the next pay cycle to begin with.
You can see where I’m going with this.
Pay your bills as soon as your paycheck hits your account. Cancel overdraft protection. And save yourself from yourself. Plus save some cash while you’re at it.
4. Take out the cash you will spend.
If you’ve heard this a time or two before, that’s because it works. Take out the money you need to spend for the pay period in cash. Grocery money, gas money, whatever else is on your budget. Put in an envelope, and when it’s gone it’s gone.
5. Now take out the cash that you won’t spend.
Get ready to get embarrassed.
Withdraw whatever money in your budget has been set aside for saving. And give it to someone you trust not to give it back to you for three months. Or, if you have a safe, put the money in there, and give someone trustworthy the key.
If you can’t get to it, you can’t spend it.
6. Practice saying no. But find things to say yes to instead.
A friend wants to meet up for lunch? No. (But invite her over for tea instead.)
Your daughter wants a new toy? No. (But take an old favorite out of the attic instead.)
Hire a sitter for date night? No. (But trade massages with a lotion you already have instead.)
Don’t worry, it’s not forever. Remember that the sacrifices you make now will pay off. And soon. Explain to your close friends and family that you’re on a mission, and they will probably support you.
7. Send your husband to the store.
Make your list and check it twice. And send someone who won’t make impulse purchases to do the grocery shopping to the store in your place.
8. But when you do go, leave your cards at home.
If you must run errands, or go anywhere else where goods are sold, do not bring your credit cards. Or debit card. Or piggy bank.
It is so tempting to buy something when it is on the best sale ever. Or when it is what you have been looking for “forever”.
Don’t do it. These are excuses.
First of all, we live in the age of the Internet. You can find anything online that you find in a store. When you are in the financial position to buy it.
Second of all, no deal is a deal if you can’t afford it. It is better to pay $55 for something when you have an extra $55 than to pay $39 for it with credit.
You Can Predict Your Financial Future
Changing your financial habits to build the life you want to have is not easy. But it is absolutely possible once you decide that the abundance you can have in a few months time is worth more than the small sacrifices in lifestyle you have to make now to get there.
If you start saving money now, in three months time, you can hold $1,000 in your hand. Owed to no one. Set aside for nothing. At this time next year it can be $4,000 or more.
How creative can you get slashing your budget? What can you do without so that you can live in abundance?