Saving Money can be done, even on a limited income: It is “Mind Over Matter”

Learn how to save money regardless of your current level of income.

By Michelle Gaut

If you find it difficult to pay the bills every month, you may wonder how on earth it is

possible to actually save money. 

It can be done, even on a limited income, and you will find that having even a small amount of savings will give you a sense of security that you did not have before.

It is a good feeling to know that if an emergency arises, you can

take care of it.

One way to painlessly save money is to invest in your company’s 

401K plan, if one is available. 

Many companies will match the amount that you set aside, sometimes as much as ten percent, so to not participate is akin to turning down free money. Since the money comes directly out of your check, you never see it, and you can set your budget using the money that you actually take home. If your workplace does not offer a 401K, ask if they offer a way for a percentage of your check to be directly deposited into savings. Not seeing the money in your check in the first place is one of the easiest ways to save.

Another trick that makes it easier to save money is to save money towards a specific goal. 

For example, you could have a savings account for a down payment on a house, or a cigar box with money that you stash for a long weekend at the beach.  [As we lose confidence in Banks, this option may become far more viable]

Everyone’s financial goals are different,                                                  

but if you identify what

yours are, it will be easier to save. 

One way to easily save money for a smaller goal

is to put your change in a jar at the end of every day.

The quarters, nickels and dimes quickly add up, and at the end of the year, you may have enough money for that long weekend.

Try setting up a savings or investment account, and pay the account a set amount of money each month just as you would any other bill.

If you give your savings priority in this manner, you will find that you have money in your savings account before you give yourself the opportunity to spend the money on eating out, morning coffee and similar money devouring habits.

Perhaps you will need to take your lunch to work that month, but you will have savings.

Cutting down on eating out, or eliminating it outright, except for special occasions, can save you a great deal of money.

One way that you could determine the amount to put into your savings account every month is to figure out how much you are spending on lunches every month.

If you are spending $125, set aside $100 for savings every month and take your lunch. Of course, it will still cost you money to take your lunch, instead of purchasing it at a restaurant, but the cost will only be a fraction of what you are now spending.

If you intend to save money,

by all means, do not go into debt.

Cut up all of your credit cards except for one, and keep the remaining one frozen in a freezer bag filled with water in the  freezer in case of an extreme emergency. 

If you are already in debt and are paying 17 percent interest on credit cards, it does not make sense to make the minimum payment on your cards while putting money into an account that has a four percent return.

If you first cut up your credit cards and then pay them off entirely, this is akin to saving. 

Otherwise, you are simply pouring

interest money into the credit

card companies’ coffers.

If you are on a limited income,

chances are, you may receive a tax

refund after you file your return.

Stores are very aware of this, and choose this time to increase their advertising and encourage people to use this windfall to buy big screen televisions and other things that they couldn’t otherwise afford.

Some places will even give loans

based on an impending tax refund. 

It is important to distance yourself from this way of thinking. 

People did without big screen televisions until several years ago, and most are still managing quite fine without them. 

Don’t think of your tax refund as a windfall, but rather as savings that you have been investing over the course of the year with the government, however inadvertently.

Now the government is giving you the money to invest as you please.

When you file your return electronically, you have the option of sending the money directly to an account. Why not make that account your savings account?

If money feels so tight that you feel that you are not able

to save a cent,

despite having cut expenses in every area

that you can think of;

consider increasing your income instead,

and putting the extra

income into savings. 

You can increase your income by taking on a part-time job, or perhaps renting out a room in your home.

Whatever you do, do not begin to rely on the second source of income to pay your bills, or you will become trapped in this new lifestyle. 

Instead, generate your extra income with the                                        

sole goal of it going

into savings,

and then you will feel the freedom to stop working

extra hours if you need to.

Today, simple savings accounts are becoming outdated, with investment accounts being the more lucrative option. 

Many people do not use a simple savings passbook anymore. 

Check with your banker and learn how your money can work for you.

There are a variety of investments that you can make with your money, some of which have high returns.[Be sure that you know the investor personally. Do not bank or do business with an anonymous online bank. You must be able to walk into a bank and to speak free of charge with the banker about your account.]

What sort of account you choose will depend on

              • your age,
              • your financial goals and
              • the amount of risk that you are willing to take.

Don’t wait until tomorrow to start saving. 

Like dieting, it is easy to put off.

Make a commitment to save today, and begin feeling the increased level of security that having a bit of money set aside can bring.

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