What's Your Secret To Saving Money? - Accounting Accidentally

“The longer I live, the more I realize the impact of attitude on life. It is more important than the past, than education, than money, than circumstances, than failures, than successes, than what other people think or say or do.” – Chuck Swindoll

Saving requires a change in attitude about money.

One change that’s required is delayed gratification. Here are some examples:

Dropping a subscription music service and just listening to the free version (Pandora, for example).
Making coffee at home two days a week, which means that you stop by Starbucksless often.
Buying afew more generic products when you go to the grocery store and Target. (I’m not going generic on salad dressing, however).

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Since these are smaller decisions, the amount of gratification you’re delaying is small. You don’t mind listening the commercials on Pandora (I certainly don’t- I just turned down the sound), and the coffee at home isn’t bad.

Other decisions are much bigger. StudySoup wrote this great article on the average amount of money a college student saves by having a roommate. The average savings over four years is over $15,000. Now, having a roommate is a big sacrifice, because you lose a fair amount of privacy. If privacy is really important to you, it’s a true delay of gratification (until you graduate, get a job and can afford to live alone).

If you’re recovering from a financial setback, this article may help.

So, what do I get?

OK- so what do I get out of all this delayed gratification?

You build savings- which can lead to building wealth- which can give you peace of mind.

Here’s a practical example: By making changes to your spending and building a savings account, you create a $1,000 emergency fund. If your car brakes down, you can pay for the repair.

Here are some practical steps:

Create a budget, and move funds into a savings account

Create a budget, even if that budget is simply on notebook paper.
Separate your expenses between fixed and variable, and take a hard look at your variable spending.
Take steps to cut your variable expenses each month and put the amount you save into a separate savings account.

Monitor your spending and your budget

Consider using a budgeting app to monitor your spending, and
Set up a separate bank account to discipline yourself to save.
Save 5% of your monthly gross income

Use a retirement account to invest- through an employer, or on your own

Carefully review each retirement plan offering from your employer.
Ask about the tax-deferred investing component of your firm’s retirement plan. Do your investments grow tax-deferred?
If you’re self-employed, ask financial advisor about your investment options

One last thing: Read The Richest Man In Babylon. It’s a simple- yet powerful- book on savings and investing.

As always, check with a financial advisor and a CPA for more specific advice.

Ken Boyd

Author: Cost Accounting for Dummies, Accounting All-In-One for Dummies, The CPA Exam for Dummies and 1,001 Accounting Questions for Dummies

Co-Founder: accountinged.com

(email) ken@stltest.net

(website and blog) https://www.accountingaccidentally.com/

(you tube channel) kenboydstl

This post was originally posted on my Quora page.

Image: Bullseye, Jeff Turner CC by 2.0