Many people, despite all their hard work, cannot seem to successfully manage their money, living paycheck to paycheck and facing their senior years without a sufficient financial cushion.
Most people do not get a solid financial education from home or school; they were never taught what to do with the money they earn. However, we can learn from successful people who know the best methods for saving and investing money. Here are a few tips to mimic the most successful savers:
1. Live simply
Rather than deprivation, living simply consists of finding cheaper ways to live at a comfortable level. Reduce spending on luxury food items or clothing slowly and incrementally. Cut back in areas which are not too important to you. Make sure to cut costs which are simply negligent – wasted electricity, food and parking tickets, for example.
2. Plan spending
We have to spend money to live, it’s unavoidable. The best way to do it, in order to save money, is according to a budget. A budget does not necessarily have to be restrictive, it can simply help you track and accordingly reduce your spending.
3. Get it free
There are certain situations where you can often find free money, like employer retirement matching plans. It is usually in your best interest to subscribe to programs like these, which are basically free money in your pocket, even if they require giving up on small sums in the meantime. Savers don’t sweat the small amounts – they have a larger vision and focus on what their money will become after a few years.
4. It always counts
Although you might not think much of the few dollars that you spend on coffee every day, saving $15 a week in an account with an 8% return will get you $62,183 in 20 years. That’s nothing to sneeze at! The point is that every dollar can count and even small savings can add up to huge savings.