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I CAN ATTEST THAT HAVING SMALL INCOME DOES NOT HINDER ANYONE FROM SAVING UP. HERE'S HOW MY HUSBAND AND I DID IT.
1. PLAN AHEAD
Planning ahead is the most important ingredient to saving money. You have to know how much exactly you are willing to save per pay check and how much you are willing to give up SPENDING to save.
Example:
If you are earning 1,000 dollars a paycheck, how many percent of the 1,000 you are willing to save. If you want to save about 30% of that a paycheck. Immediately take out the 30% and save it.
The best equation for this is, INCOME-SAVINGS=EXPENSES
My husband and I really love to go out to eat but after we came up with a budget on how much we would like to save a pay check, we thought we wont be able to do what we love as much but we still do, it's just that instead of spending a lot, we spend little and we always always always try to think on how much we are willing to spend when we eat out and stick to that budget.
2. ENVELOPE SYSTEM
We might be old fashion but we use cash in everything now. We used to be so dependent with our debit cards before that we don't have limits to our spending.
As soon as we use the envelope system, we knew exactly how much we can spend on.
Example:
150/ month for grocery
150/ month for our food/clothing/activities
100/ month for family or gift expenses
150/ month for gas
50/month for household needs
120/month for our phone bills with unlimited internet
and the list goes on...
If you create a list on how much you spend and how much you are willing to save, by using the envelope system, the greater chances for you to control your spending and really be frugal but wise spender.
3. GET RID OF UNNECESSARY EXPENSES
Well, who doesn't like to spend if you have money? Spending is okay but if we are over spending and it's not wise anymore, it's time for us to evaluate our expenditures.
I have always been a fan of Robert Kiyosaki and I loved his "doodads" concept in his first book. In his book, he called the wants as "doodads"--- those the we really don't need but we get anyway.
The day we decided to save, my husband and I talked about it seriously. First we decided to get rid of our home internet and cable which really helped us greatly with saving. Then, we talked about not upgrading our phones, then we talked about only spending this much on eating out. These are a few of the things that we did that I am sharing because if it helped us, it might help you as well.
4. DO NOT BEND
When you already decided on how much you are willing to save up, do not change it! You can tweak it as you start but once you are in a habit of doing it, bending your budget will only result to confusion or you can become lenient with it---So as much as possible, don't bend and stick to what you have decided on saving and how much expenses you are willing to cut.
It takes 21 days to form a habit so by habitually not bending to spending, you are actually training yourself to save your money and spend your money efficiently.
5. SHARE
The reason why I want you to share it because in our generation, it is important to have others know the efficient way of spending money and effective way on saving. In a world full of debit cards, credit cards and loans, it's easy to be swayed by promotions and other deals.
Most times, the things that are promoted, on sale, and the like are the ones we don't really need. If we don't have a budget, we will always be break even, we earn, we spend, we earn more, we spend more----- and that will be it for the next years of our lives and it's going to be a cycle and a rat race.
So, if you are doing something that might be beneficial to the world, share it.
