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Convert Money Saved into Real Savings

Lazy Man and Money shared his annoyance with all those “money saving tips” that we read about on in the internet, in lifestyle magazines, and in newspapers. In my opinion, he correctly rants about the emptiness of these “Easy Ways to Save Money” posts. I recently read an article in a magazine that said “Save $500–FAST!” The secret was putting away $10/week. In a year, you’d have $500. Lightning-fast, huh?

Look, I’m guilty of writing such articles and will probably have similar posts in the future. However, I think you can convert your money saved into tangible savings. You just need to know how. Develop a plan to eliminate costs and tranfer the savings into real money. Change your behavior. Develop positive long-term spending habits.

• Understand where you can really find extra money. Getting a new water heater, replacing your light bulbs, or buying energy star appliances does not convert into real savings for the average consumer. Let’s be honest, saving $50 over the course of a year has little impact on your bottom line. Figure out where you can really save money in your everday life.
• It takes vigilance. If you decide to eliminate a vice in order to save money, figure out a way to make sure you actually see the savings. Be on top of your spending so you can be on top of your savings.
• Use A Virtual Piggy Bank Sometimes we need to use “old school” methods even though we live in a modern world. Establish a virtual piggy bank. Open up an online savings account and add to it every time you cut a cost. For example, each day you buy a venti drip instead of a latte, take the $1.50 you save and add that $1.50 to your newly established savings account. If you’ve stopped smoking for the year to curb the cost, take the $5 you would spend on a pack of cigarettes and every other day, drop $5 into your account. If you don’t do this, the money you save will only end up being spent on something else. Using your virtual piggy bank, you’ll see your money grow over time.

By only giving up the designer coffees, you are not going to become an automatic millionaire. It takes focused action and concerted efforts. But if you change your spending habits and make sure that you stock away your savings, you’ll see your rewards in the future.