This week David Ning joins the blog. David is the writer behind MoneyNing, a blog that encourages readers to take action when it comes to their finances. The action he’s encouraging today? Some simple steps you can take to get more money in the bank. You know we love that!
“Savings is boring, so why do it?” says pretty much everyone around you. Luckily, you know better, but still, stepping on the gas could be difficult to maintain at times. If you are struggling to stay focused on saving money, then you need a few tricks to help ease the perceived sacrifice. Here are a few such suggestions:
Celebrate a milestone generously. Savers know the key to long term success is to keep the fire up. That’s why it’s important to relax for a brief moment every time you reach a mini goal to bring out the bubbly. It’s like resting just so you can actually walk farther. Aside from validating the effort you put behind reaching this milestone, you are also giving the present a bit of a priority. After all, today is just as important as the future.
Look at history. Sometimes, all it takes to remind yourself of the effects of modern day consumerism is looking at everything you bought but no longer use. Open up the closet, dig out the cabinets and check out the garage when you have a chance. Do you even get any enjoyment out of much of that junk taking up space anymore? Now what if you just bought half of those things and saved the rest?
Visualize the future. Saving is much easier for me these days because I’ve changed my perception of how much everything costs. That $800 TV is no longer just $800, but worth an asset that can produce $40 each and every year forever. I conservatively use 5% as an annual return, because market returns are unpredictable and this makes quick mental calculations easy. $40 may not sound like much, but save whenever you can and pretty soon you can start counting off the days to retirement because your passive income has grown sufficiently large to fund your lifestyle. Other people find it better to calculate the future value of $800 if it were saved and invested. Do what floats your boat, because either way would reflect reality much more than the $800 that most people focus on.
Change up the pace once in a while. If you find cutting back too hard, then consider thinking of ways to earn a few more bucks. There are many creative ways to make money these days, and those activities might be more fun for you. It’s not like your savings cares whether the dollar is saved or earned, so why not try both?
Find a buddy to keep yourself accountable. Share the details of your quest to financial independence with a friend. With a much more likelihood of making the money moves you tell someone else, process will be inevitable. The journey can also be more fun. For instance, you can make savings a game where the two (or more) of you compete. See who can find the better deals and drop the difference into the savings account. Try to out contribution each other in retirement accounts. And if the pair of you is lucky enough to max 401ks every year, try to become the first one to max it out. Who ever wins get free ice-cream and bragging rights!
About David: David is an entrepreneur and proud dad who enjoys the work-life balance he’s worked hard to maintain. He runs MoneyNing.com, a place to discuss money matters for people on their way to financial independence.