For most of us, learning how to save money isn’t easy. Your friends want to go out to dinner and have expensive drinks, you want to live in the nicest place you can afford and if you have kids, they basically want everything.
Every day and everywhere you go involves spending money. Even if you’re just driving to your friend’s house to just hang out, you’re still using gas. You want some money saving tips because deep down you can’t stop the flood of spending and I completely understand. I’m a reformed spender myself and I’d like to show you the way to financial freedom.
There are four core principles on how to save money and build wealth. All of the principles are important and if you excel in one area you should focus your time trying to improve the others.
You may learn how to save from some of the creative money saving articles linked on this page but you will only really start to build wealth when you practice and eventually master all four of the core money saving principles.
Grow your Existing Savings Faster
The first core principle is investing your existing savings. Investing simply means taking your money and making it grow on its own. Your risk tolerance will dictate how quickly you will be able to grow your invested money.
Sticking your money in a savings account is near zero risk, but the payoff, the interest you earn is very small. Usually less than 1% which is less than the rate of inflation. So if you have money in a savings account, you actually lose money.
Beyond savings accounts there are various degrees of risk you can accept for some very handsome gains. One of my favorite low risk/effort and high gain strategies is investing through Betterment which I’ve mentioned a few times before. Below are some targeted articles which will give you plenty of investment options so that you can choose the one that best suits you.
Be Productive and Earn More
If you have a full time job, you’re going to work 40 hours a week or more. Some people make $20,000 a year on 40 hours a week and some people make $100,000 in the same amount of time.
There is no reason you shouldn’t be on the upper end of the pay spectrum. Some of the biggest reasons you are not getting paid as much as you deserve are very simple and easy to fix.
In a span of three years I was able to grow my salary 74% without ever changing positions or leaving the company. In this series I’m going to share my approach towards being more productive and getting the money you deserve.
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Reduce your Existing Spending
It’s not enough to just earn more money, you have to save the extra money too. There are a ton of different approach towards spending, there are the caution to the wind people, the extremely frugal, the cheap and then there is me.
I think that if you’re smart with your money and your budget, you can have many of the things you want along with everything that you truly need. These are some articles on unique ways to reduce your spending without feeling like you’re too deprived.
Don’t be a Push Over
I don’t mean to be a Negative Nancy but everyone is trying to get one over on you and take your money. If a company owes you a refund they aren’t just going to give it to you, you’re going to have to ask for it and in many cases demand it!
If you’re working hard but feeling under appreciated you have no one to blame but yourself. Stop losing money for fear of speaking up and contesting a charge on your credit card bill. Get the raise you deserve through clever negotiation and determination. Don’t be a push over, take what’s yours because if you don’t, someone else will!
Fix your Mistakes
Yes, we all make them so you’re not alone. I actually think it’s very healthy to make mistakes as long as you learn from them. The only real mistakes are those you make again and again. As the saying goes, “Never Half-Ass Two Things, Whole Ass One Thing” ;)
How to Save Money Resources
Learning how to save money isn’t easy. It takes a lot of work and dedication. Much like weight loss, success isn’t found in a day but is built over time though perseverance. When our parents were growing up things were much more difficult. They didn’t have all the automated technology we do to help save money.
Now we’re lucky and we can learn about saving money for free and there are a ton of tools out there to help us on our money saving journey. I’ve included a few tools and sites that I found extremely helpful in building wealth. Be sure to check them out to see if they can help you save time and money too!
For the full list of resources I use to manage my finances, click here.