It is funny how when we want something, we ask open-ended questions to problems where the answers become overwhelming, and we need to act on the solutions. My open ended question I ask myself, How do I save more money?
Well, finding ways to save more money is the same. The solutions are straightforward and many, but once you start working on implementing them, too much happens all at once.
This is a good thing because it reveals the truth about saving money.
Saving More Money Comes In Many Steps.
These steps worked for me, and I’ll explain how these steps made significant changes in my approach to saving money. These steps CAN be done in any order, but there is a practical approach to what order I put these in. Because, in hindsight, they worked.
My Steps To Saving More Money.
No guarantees, just steps that resulted in me saving more money for our family’s future.
1.- Set Small Obtainable Savings Goals.
Of course, the goal is to save more money, which is obtainable with time and resources. However, that’s the end.
Even the longest journeys are made up of small steps. The plan here is to make small obtainable goals that will give you a sense of success and feedback on what is working for you and what is not.
Simple savings goals can be to have more money left over at the end of the pay period. That’s simple; it could be $5 more than you usually have.
With the following steps, you’ll see having this simple goal of having an extra $5 is a powerful resource for saving more money over time.
2.- Find Out Where You Are Spending Money – Create A Spending Log.
Create a Spending Log where you make an entry in your Spending Log each time you spend money.
Each entry should be the time/date, amount, and what it was for. I used separate sheets of paper each month and a magnet to keep the spending log sheets on my fridge.
Hard to make a plan to make changes to your current situation if you don’t know what your current situation is.
For me, I thought not having money was my situation. I did not have money from events, but I had money, which resulted in spending it all.
Let’s face it, have you ever gotten your W2s and looked at how much you earned over a year and thought, “WTF did the money go?”
That is a great question, and having a spending log will help you track down how and where you are spending money. This way, you can figure out where you can make improvements and where you can make minor adjustments.
This race to save more money is a goal once achieved, which should be mastered over life. Your spending log is a lifelong commitment and could be a review of the great job you are doing with your money.
3.- Stop Wasting Money.
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Using my Spending/Expense Log (An expense log I found on Amazon for cheap: Expense Budget Tracker)from Step 2, I identified areas where I was actually wasting money. Often spending money, I didn’t even have through the use of credit cards.
If I am spending my money wisely on items, I am saving money. So I decided to look for sales on things I could only do with.
I then focused on areas where I was using credit cards to buy items since when I was using my credit card versus my debit card, I was spending money I didn’t have. I found ways to eliminate things I could do without.
I sas wasting money and how I stopped.
I work nights and back shifts since I get a few bucks extra per hour. Also, being available during the day for my family works best for us. So I might have an unhealthy addiction to coffee.
Often I would go to a local coffee shop or convenience store and buy coffee, and I thought it was only a few bucks. Still, after a while, I noticed in my spending log I was spending a lot of money for the convenience of picking up coffee where ever I wanted.
The first step was to stop going to overpriced coffee shops, which slowed down my spending.
Next, I made a plan to figure out how much coffee I drank, I figured it out with my Spending Log, and I came up with a plan.
I bought a large thermos(a good steel version that keeps items hot), and I make coffee at home to my taste and take that with me to work. My thermos is 2 quarts; imagine how much I saved each day bringing coffee to work rather than buying it while at work. 2 quarts!
4.- Eliminate Consumer Debt and New Debt.
Now, we all talk about this if you have ever attended Financial Peace University(FPU) or listened to Dave Ramsey.
Debt is the most significant liability you can have, no duh, and will forever hold you back.
I’ll go a step further, debt could be a symptom of a more significant problem, seeing debt as “OK” and not avoiding it. I did it. I used credit cards in the past to ‘supplement’ my income when I wanted to spend money I didn’t have.
In this step, we must target eliminating accumulating additional debt, behavior changes, lifestyle changes, etc. Then focus on eliminating debt.
Again, being a student of Financial Peace University, I tackled my debt using the “Debt Snowball” method.
The “Debt Snowball” might not make the most mathematical sense compared to the “Debt Avalanche” method. Still, those small achievements really boosted my sense of accomplishment.
Step 1’s process of creating small obtainable goals sets you up for moral boosts as you make accomplishments.
To recap, I worked on stopping creating more debt. Using the spending log created (step 2), I found I was spending way too much for coffee at work(often whipping out my credit card) and focused on not wasting any more money(step 3). No more buying coffee at work with a credit card, so no more debt creation.
Not only did I stop creating money debt on my credit card, but I also had money left over to direct to existing debt and help pay off my bills.
5. Reduce Spending, But Still Live Your Life.
Now not talking about ‘wasting’ money; talking about reducing money spent on necessary items. Food, clothing, gasoline, etc.
My wife did a great job keeping down our spending on our family’s food bill(and my wayward spending habits), and if you saw me, you’ll see I always got a meal.
She worked wonders keeping food in our house by choosing where to spend money. We often shopped at Aldi and Walmart more often than the more expensive places like Fresh Market and Whole Foods.
Another place where we reduced the amount of money we spent on necessities was how much we spent on gasoline. I read my owner’s manual and bought the lowest octane gasoline my car could run on.
The octane level was the only difference between regular and higher ‘grade’ gasoline. All other additives, like engine cleaning ones, were the same in all grades at the pump. Buying the cheaper gas saved me money with my longer work commutes.
A simple way I learned to save gas was to be sure my car tires were correctly inflated, and I found local gas stations that had Free Air till I got a small air pump for my garage. The less money I spent on necessities allowed me to target more debt elimination.
6. Save Money First!
Let’s say you reach that magical space where you have eliminated all your consumer debt; what next?
I was there; one day, I had extra money after finishing paying off my last car loan and had to develop an accurate savings plan.
The easy solution was to make plans for the money; in hindsight, this is where the 7 Baby Steps Of Financial Peace University came in. Whatever Baby step you are on, you need to do that first.
Pay Yourself First.
This means whenever you get paid or receive money, before you spend any money, you take money out for savings.
The constant reminder of bills helps keep us focused on eliminating consumer debt. Once you reach the point that those bills stop coming in, there is no reminder to save and invest your money.
So the first thing you take from a paycheck is your 3-6 month household expenses, emergency fund, retirement investments, mortgage early repayment, etc.
Regardless of your plan, I advocate for the 7 Baby Steps; you do it before you spend any money from your paycheck. Stay focused.
7.- Increase Your Household Income.
Now, this step could be done earlier if you did it without incurring additional debt.
Ways to increase the “increase your income” step without creating more school debt.
- Look for a better-paying job. Keep the ink on your resume dry.
- Work towards a promotion.
- Pick up a side job, or side hustle. (I like side hustles myself).
- Find ways to go to school for free or cash rolling it after paying off debts.
Getting a better-paying job, or increasing your income, can help eliminate debt. Still, the accurate boast to your plan is when you have no debt.
Every new dollar you bring in can stay in the household. In savings, retirement, or paying off the mortgage early.
Always seek a better job, career, or side hustle to increase income. No one will throw more money at you; you have to look for it constantly.
8.- Think Long-term: Buy Efficiency And Reliability.
As I got older, I only bought more reliable, lower maintenance, longer-life cars.
Also, when I need to replace a household appliance, I do my homework and check reviews and warranties.
Nothing can derail a savings plan like an unplanned expense. You know when you need new car tires, but are you planning for that surprise water heater leak?
I don’t, but when I replaced my water heater, I replaced it with a model that used the least fuel and had a long-life reputation.
Plan for continuing to save and make the right financial choices by buying quality items when needed.
How Do I Save More Money Disclaimer.
What works for you is more retrospective than predictive. These steps worked for me to get ahead in life slowly, and the order might fail to meet my goals.
However, steps 1 & 2 are essential. You need goals and research how/why you are not already saving more for your future. After that, you can identify what needs to be done and, by measuring your results, figure out what works best for you.
Our Lives Are All Different and Personal Finance is Personal. Good Luck!
 Myself with an interesting Bull Sculpture. Notice: No Lambo’s. :/ | Hi I’m Tom, A Blogger And A PIG Farmer. PIG Farmer as in I grow Passive Income Generators(PIG’s). I’ve been playing with stocks, mutual funds, and options for decades, as well as always working on my side hustle stacks. Unlike what you read online, I’ve yet to find a way to get rich quickly. Get Rich Quick isn’t happening for me. My journey has been long and continues. I hope to have so many PIGs I can stop working at my current job and volunteer as a medical worker overseas. Still waiting, but getting there. I still am a family man, and while on this Journey of Growing PIGs. I wanted to share my adventures(ups and downs), hoping you will contribute with your feedback and comments. Fun Fact: In my spare time, I am a Band-Dad! |