Don’t ‘sale’ yourself short on savings
I keep hearing people use the term 'I saved money' when they refer to buying something for less than what the price ticket states. Let us mull over these words “I saved money”. Did you? Did you really save money? Well, ok then, show me. Show me all the money you have saved over the months and the years. It would be wonderful if there was someone out there who had this stash of cash, but my guess is that no one does.
And so, is that money really saved? No. it's just money not spent, on that purchase, at that time. So, today I'd like us to think about the words we use, what they really mean, and how we can make that phrase 'I saved money' a reality.
How can we do this?
Well, how about every time you 'save' money, by not paying the full price for something, you put the difference aside into an account. And while you're at it, why not think about what you're saving money for, and allocate it, mentally, for that purpose.
Could have saved more
You see, the one thing that everyone – absolutely everyone – I have ever met who has had the money and life bulb go on in them, says is that they wish they'd saved, or saved more, throughout their lives.
Saving money is the single biggest favour you can do for yourself – assuming you have dealt with any debt issues.
But it's far from easy. Saving money requires your commitment and hard work.
So how can we make it easier for ourselves and cut down on anything getting in the way of it going into that pot?
Allocate a percentage
Well, one way of doing this is to have a percentage of your income go straight into your savings account, so that it never really hits your spending account. Setting this up as an automatic process saves you having to remember, or being tempted into using it.
People are full of great ideas, and that's why I set up my financial platform, so that we can share and learn from each other. Have you, or anyone you know, come up with a great way of saving money? Please share!
Here's something interesting
One woman saved every penny she got by way of a raise for the longest time. Her philosophy was that she had survived well on her initial salary, and so the extra she was entitled to could simply be lobbed away for her future. She lived in Kuwait for years, and has since retired to Canada where she owns her own property and lives a very comfortable life, not wanting for anything, able to travel at will, and indulge in various pastimes.
Now, I'm not too sure we'd all survive comfortably on our initial working salaries when we have children, obligations, school fees and so on to contend with, but, think about this and use the premise of it to come up with a system that works for you.
It could be that you live on your base salary as is for as long as you can, and then give yourself an increase to a level that deals with inflation, any extra obligations and so on, as you go along, always keeping in mind that your raises and bonuses are extras, are an added benefit, to be used wisely, preferably put aside for a future spend. This could be towards a home, your pension, or a beautiful work of art.
Save for those little luxuries
Saving money isn't just about the future, and big 'heavy duty' expenses or obligations that make up our lives. We all need to have a treat every now and again, and so, of course you can have that comfy couch, spiffing suit, or bling ring. But how about saving for it, instead of splurging on it and making up the payments later?
Going back to where we started, and that receipt that says you saved X. You could argue that you only bought that latest big purchase precisely because it is on sale. I get that. But how about saving for it, so that it's a pre-meditated purchase, and then waiting for the sale, and not pocketing the difference, but putting it in your savings account for the next big purchase.
And while you're at it, think about this: You only really save money when you can afford to pay for something, but choose not to buy it. Having the money, being able to afford a certain thing isn't an invitation to buy it. If you don't need it, keep your money.
There are many little ways that can get you to see what you do, and I hope, change your behaviour with money. I believe that looking at our seemingly mundane daily behaviours and spending patterns is an essential starting point. You see, the simple, daily things can have the biggest impact.
I know of a father who was always buying gifts for his child. Little knick-knacks. I kept hearing 'it only costs Y'. And so I invited him to start a savings account for the child, and for him to put an equivalent amount of money – the same cost of the gift – in that account as he went along. The father soon realised how it all adds up, because it did; it was staring back at him in the account. I'm happy to say that he doesn't spend anywhere near what he used to on these literally throwaway trinkets.
You can’t ‘save’ by spending
I realise that the temptation to spend is everywhere, especially now that the sales are starting; the offers are on, and the enticement to ‘spend spend spend’ is all too obvious. But adverts that lure you by claiming; ‘The more you buy, the more you save,’ are totally misleading! The more you buy, the more you spend. Your bank balance can tell you that.
So remember, just because the bottom of the receipt tells you that you saved 'X' amount of money, it doesn't make it real. The only thing that'll make it real is you putting that hard cash – that saving – into an account. Give the account a name – call it whatever it is you're saving for, and then leave it alone, until it's time to spend on that special thing. Then truly enjoy the fruits of your discipline and resolve.
This article by Nima Abu-Wardeh first appeared in The National
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