Motives and Methods for Saving Money
Ever since its invention, money has been both hard to come by, and, hard to hold on to. Getting, spending, and saving money is a balancing act that is always challenging.
By Donovan Baldwin
The following discussion is about motives and methods for saving money, and, maybe even getting it in the first place. The discussion on this web page is somewhat general in nature, but, later, we will provide links to some specific tips, techniques, and methods for hanging onto more of the money you earn.
When it comes to having more money to work with, there are two things to consider.
First is the money you earn, and, the other is the money you spend.
In the words of a business man or woman, "revenue", and "expenses".
Recently, we have been through a major recession.
Many experienced the unthinkable, losing their jobs, seeing their retirement funds dwindle, and even losing their homes, and other major possessions.
This DID NOT happen to some people, however.
In some cases, this "good luck", was just that, "luck".
However, for many, the ability to survive the financial upheavels of this decade, and others, rests on their willingness to make decisions, and take action, in ways that others don't...or didn't.
Financial guru, Dave Ramsey, puts it this way:
You should be willing to live like nobody else now, so that you can live like nobody else, later.
What Dave Ramsey is saying, is, that those who are willing to make the tough financial decisions now, can amass a financial base, and form financial habits, that will reward them at a later date.
In other words, if you can do without that 51" plasma TV, and the cherry wood entertainment center to display it, and the digital gaming system that, obviously, go along with it, and the expensive, and highly mortaged home to put it in, you will be able to save your money, invest it wisely, and help it grow to the point where you can have all these things without having to surrender your first born child...or your self respect.
Of course, most of your friends won't choose to live that way, and, will think you're crazy not to enjoy life like they are, but, if YOU do, maybe in a few years, they will realize that they SHOULD HAVE.
Once you realize that you will have to make choices about what you do with the money you earn, you will begin to understand that knowledge is key. However, you don't just need to know WHAT to do with the money you earn, you need to know what you are already doing with it.
Therefore, your first step in taking control of YOUR money, is to make a journal of where your money goes. This means writing down, that's right, WRITING DOWN, every penny you spend, and, WHAT YOU SPEND IT FOR, for a few weeks.
I guarantee that over 90% of the people who do this one, simple, step will realize that their hard-earned money is leaking out in dozens of ways they never even realized. Not only that, once they have taken the time, and made the effort, to look at where their money goes, AND what it went for, they will immediately see holes that they can plug...without even getting any additional advice or instruction about how to save money.
The next step is to use the insight gained by recording all expenses, is to create a budget.
Don't let the word "budget", scare you, by the way.
Your budget is simply a blueprint of what you need to spend your money for.
Therefore, most categories of expenditures will be pretty obvious: car payment, mortgage payment, or rent, electricity, water, and other utilities, and so on.
Obviously, some categories, such as your car payment, are the same each month. Some, however, such as your utility bills, may vary from month to month. Looking back over past expenses will give you a good idea of how much to budget for expenses such as these.
Of course, a budget should not be used to simply take things away from you, like most weight loss diets. It should be a tool which allows you to do the things you desire, such as going on a vacation, or buying the kids' Christmas presents.
While making a budget is important, even more important is sticking to it. A budget is worthless if you blow it off every time you hear about a new toy you want. On the other hand, things change in life, and, if it is needed, be ready to review your budget regularly, and revise it as needed.
You can get guidance about how to set up a home budget at http://www.onlinebudgetadvisor.com/budget-builder.html.
Once you know where the money is going, and, hopefully, why, you can make intelligent decisions about its departure.
That's where the rest of the articles on this website will come in. They will provide guidance on how to make decisions about what to do with your money in order to save it, or spend it more effectively.
ABOUT THE AUTHOR:
Donovan Baldwin is a freelance writer, and University of West Florida alumnus, BA - Accounting, 1973, and is retired from the U.S. Army after 21 years of service. In the military, he worked with military intelligence, logistics, and adminstrative functions. In his civilian career, he has been a Program Accountant for the Florida State Department of Education, a Fiscal Consultant for a regional office of the Florida State Department of Education, and the Business Manager of a community mental health facility. As an accountant, specializing in budget development and analysis, he has been responsible for budgets as large as $50 million. He has also been a federal purchasing agent, and a manager in retail and food service industries.
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