The Roman statesman Cicero said, “Frugality includes all the other virtues.” Most of us focus a lot on making more money. But once we make it, we tend to spend it all and don’t have that much left in terms of savings. If you don’t have savings, you can’t make investments. And if you don’t make investments, your money isn’t going to grow. As a result, retirement might roll around without your being prepared for it. Instead, take a few simple steps to make sure that you start saving money before you absolutely need to have it. If you’re wonder if you’ll have enough money to retire, try the following tips:
Schedule a Repeating Transfer to Your Savings Account
If your direct deposit comes through on a certain day of each month, you can schedule a repeating transfer to your savings account a couple of days later. Don’t make this amount so big that you’re sure to miss it. Start small. Even fifty dollars per month will do. If you get used to saving this amount pretty quickly, make it seventy-five or a hundred. Another good idea is to start transferring money right when you get a raise. You’re already used to living within the limits of your previous salary, so transferring the extra money into savings will not be difficult.
Write it All Down
Are you going to start spending less if you have to write down all your expenditures? You may think that writing things down isn’t going to make any difference but you’d be surprised at the outcome. Many people keep a journal with them and write down everything they spend. This makes them think about it while they’re actually doing the spending. Plus, you can also sit down with your journal at the end of the week or the end of the month and see where you’ve overspent and where you’veunderspent.
You heard that right. There is such a thing as underspending and most of us are doing it all the time without even realizing it. Where do we tend to underspend? It’s usually on those little things that will help us to improve our physical health and our mental wellbeing.
You may not think it’s worthwhile to buy a lot of fresh produce and make healthy meals. But your health is more important than anything else you might have. So most expenses made in this direction are justified. Plus, if you’re spending some money on entertainment every week, like going to a movie, this is usually going to make you feel good and work harder in the long run.
So don’t skimp completely on the little things that make you feel good. Instead, try to avoid spending money on luxuries that don’t do much to further your wellbeing. You can set up a cost-benefits analysis to help you figure out which expenses are worth it and which ones aren’t.
Let’s say you have a habit of getting coffee and a bagel on your way to work every morning. This is not an expensive breakfast by any means and is only likely to cost you a two or three dollars. But three dollars per day adds up to fifteen dollars a week, which is approximately sixty-six dollars a month. That’s quite a bit of money, which could all go into your savings. Instead, you could buy bagels from the grocery store and make your coffee at home or at work.
Think about what little habits you have, such as these, that you wouldn’t mind giving up. If that morning coffee is really important to you, don’t worry about it. There must be something else in your daily routine that you wouldn’t mind giving up.
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