Saving Money: How Use Your Money Wisely

This article specifically focuses on how to be frugal, thrifty, and save your money.  You may also want to read related articles on this site pertaining to How to Make a Living and Make Money Honorably, Consumer Smarts: Cultivating Good Shopping and Buying Habits, and How to Mange Your Finances.

View your bank balance periodically. Seeing the numbers grow will give you a sense of accomplishment. You will also be quite pleased with the interest that you accrue, which will inspire you to save even more money. Also check if you are saving your money with the optimal type of bank account and bank. Just remember that deals too good to be true often are. At the same time, though, do not short change yourself for a sub-optimal bank account that may not be earning you as much interest as you deserve. Calculate how much interest you will earn from the money in your bank optimal account in one year, in ten years, and will be even happier that you are saving right now. Equate it with something enjoyable. For example, you could make $20 in one year, and you could probably use $5 to eat a delicious burger or whatever exotic dessert you like. Just think of that ice cream that you could use a fraction of that interest earned to buy. Yum yum.

Remember the saying that one dollar saved is two dollars earned. This is especially true in high-tax countries where making every two dollars only gives you a dollar in returned. You can also think of it as if you had spent that dollar, you would be -1. However, because you have that dollar, you are +1. Therefore, the difference is two dollars.

Do not risk your money. A sure way to lose your money is to engage in high-risk money-losing activities. This includes gambling, buying the lottery, or buying stocks. You can definitely do those things if you have extra money, but if the goal is to save money as its earliest stages, then those things should not be done. The chances of losing your money are simply greater than gaining more money. If you would like to reinforce this concept, just calculate the odds that you would win a prize versus the odds that you would lose your money with a calculator or computer. If you really would like to do these high-risk money-losing activities, then just do it in simulation in some sort of computer game or something of that sort. You will find that you lose much more often that you win. How would that be fun?

Time is money. You yourself are money. Do not waste your time as your time can be spent thinking of ways to make money, thinking of an invention, doing a part-time job that makes a lot of money, or just enjoying yourself so that you can continue your full-time job with more energy. Remember that each time that you want to waste time doing something that you do not like to do. Learn how to say no (see the article on assertiveness) when confronted with tasks that you do not want to do. Also do not spend time saving a few cents if it takes several hours of your time just to save those few cents. Remember to 
always balance your time with the amount of money involved.

Encourage other members of your family to save money. Make it a game. See who can save the most money for that month, and they will get a dessert or a small prize. If the entire family saves money, then the entire money will be wealthy. However, if even one member of the family is a spendster, then it can definitely cause problems. Try not to force others to save money; it must come from within. Be creative in encouraging others to save money, but don't lose your patience.

Replace activities that require money with those that do not. If you enjoy watching movies at the theatre, consider purchasing or renting DVDs and watching at home. Or, better yet, go out to the park, which probably does not require any money at all and is great for your health. Whenever someone suggests an activity that requires spending money, suggest a more frugal alternative. For example, suggest a potluck over a meal at an expensive restaurant. Suggest listening to the radio over going to the symphony. Walk to the mall instead of driving or taking the bus. Go to the public library instead of buying that book. Not saying you should always restrain yourself, but more often than not you would likely enjoy the money-saving activity over the money-spending activity, if not for the mere reason that it saved you money. Remember, "the best things in life are free."

In general, learning and actually saving the money that you said you would save is nothing more than a habit.  You must practice for it to become a strong habit.  Don't ever give up!

In summary, to save money,

A. View your bank balance periodically.

B. Remember the saying that $1 saved is $2 earned.

C. Do not risk your money.

D. Time is money.

E. Encourage other members of your family to save money.

F. Replace activities that require money with those that do not.

Life Skills > Money Management Skills > Saving Money: How to Use Your Money Wisely