Money Matters: Tips for Saving Money
I often hear people crying about money. Time to accept the reality. When it comes to savings, young adults around the world have no savings, or safety net to allow them to live on their own.
Many get into credit card debts. Disturbingly, these young adults are either using credit cards to buy luxury. Or living off them. They buy things on credit. High interest. Each month it’s a new thing, which adds up to the monthly bills or expenses.
Not their fault – no one taught them about interest rates, finance, and taxes.
Their fault – they never learned.
Not their fault – media favor corporates and opens out a materialistic way of life.
Their fault – they chose it.
It can be difficult to figure out simple ways to save money and what’s even harder is how to use your savings for your own financial goals. Trying to save money can be quite overwhelming for some people, but, the hardest part is getting started.
The hardest part is making better decisions
Do you spend a $20 on casual lunches or drinks every day?
Do you tend to buy things you don’t need on impulse?
Do you keep up with trends to try and impress your friends?
Most people do. Don’t be them.
These small habits can result in you losing hundreds, if not thousands, of dollars a year.
So I’ve rounded up a few realistic money-saving tips. These are simple mindset and lifestyle tips that will have a huge impact on your savings plan.
1. Why do you buy, what you buy?
Stop buying things you don’t need. Most people buy things they can’t afford just to show off to others. To impress others. Men, women, colleagues, neighbors, etc.
Don’t spend your mental energy and resources in impressing people who don’t give a rats ass to what you have. Instead, focus on your own personal needs and wants.
What do you like doing more? I spend a lot on food and supplements. I have spent a shit load of money on them. I spend (invest) in learning from the best coach in my town.
I don’t own a fancy camera, MacBook, or any of the plastic things. Heck, I was using the same old Nexu5 for past 3.5 years.
Get me? I spend on things I truly need.
2. Value Over Material Things
The gist is simple- spend your money and time on things that bring real value to you. With that being said, stop making tangible purchases that give you a very momentary surge of accomplishment.
There’s no end to buying things. First, you buy the Street 750, then you buy the Fat Bob, and then the Night Rod. But you still don’t find fulfillment, you want more. There’s no end to it.
I was planning to buy a Harley few month back. I thought it would look great. I told myself many stories as to why I need it.
But I didn’t buy it. Why? I chose to remain honest with who I am and what I need. I prefer comfort of the car a lot more than the thrill of riding a bike.
3. Make Smart Purchases
Instead, I invested in a website. I paid $4500 for it. It makes me a little above $300 per month on auto pilot. That’s Rs20,000 per month on auto pilot. Not bad for an investment.
If you buy a flashy sports bike or car, rather than focusing on one that’s efficient and get the job done, you’re spending money to impress other people.
If you always have the latest cellphone, you’re spending money to impress other people. If you always must be seen at the coolest new place, you’re spending money to impress other people.
For some people, not worrying about what other people think seems impossible. These people’s social cues usually come from two sources:
- From the media, which is usually saturated with advertising or
- Friends whose cues also come from the advertising-laden media.
Well, don’t be a sheep and stop worrying about it.
Take care of the basics. Are you living comfortably? Is there always food on the table? Do you have efficient tools to make your daily life easier? Then you’ve got all you need!
Coming to this realization is incredibly valuable. It drops your clothing budget. It drops your automobile budget. It drops your electronics budget. It drops your housing budget. You don’t need a mansion, a shiny car, the latest gadgets, or a $50 haircut just to be able to look good in public.
I am not saying spending money on lavish things is bad, but your mindset when making these purchases makes a whole world of difference.
Every time you’re out shopping, ask yourself if you’re buying something for your own personal satisfaction or are you buying it because you think it will impress Joe next door?
Posturing is slippery slope into the abyss.
Vijay Mallya who lived an extravagant lifestyle bought yachts and private jets, went deep in debt.
While Azim Premji, founder of Wipro, a billionaire flies economy class and often uses public transportation.
Figure out whatever you truly want in life, and invest your money there.
Do you love to travel around and be based in different places? Then don’t get stuck with a house and a lengthy mortgage. Do you hate working in the corporate world? Then start something for yourself!
These counter options may not be as traditionally luxurious as their tangible counterparts, but they’ll be bringing you more satisfaction in the long run. Not to mention, it allows you to spend your money on more important things you truly care about.
There are hundreds of articles out there that tell you how not spending a dime is the only way for you to save money. And we’re here to tell you that, that’s an absolutely terrible idea. Yes, you might save money, but are you happy?
What’s the use of your money if it’s just sitting there? What most of these articles fail to mention is that there’s a big difference between being cheap and being frugal.
People who are cheap are looking to spend the least amount of money right now. People who are frugal, on the other hand, are looking to make the smartest financial decisions to save money in the long run.
Frugal people make purchases that will in time pay for themselves and even generate income.
Frugal people don’t just buy things; they invest in them. And they don’t just invest in “stuff;” they invest in services and tools that actually save them money over time.
