Most people don't have a clue how to save. They know they should. But they don't. Here are some ideas designed to give a kick to your attitudes and thought processes regarding savings.
Knowing why you save.
Most people who don't save never bothered to create a mental picture of what those savings would produce. The attitude is "what good is saving 50 cents? Why bother?" This is due to a complete lack of understanding of simple mathematics. If you've never heard of a geometric progression, or mastered your understanding of what wealth compounding is, you are stuck in this rut.
Paying full price
Are you a mall shopper? Do you buy things when there is NO markdown or sale on? Any purchase (and I do mean any) that isn't at a pennies-on-the-dollar price is just giving your hard-earned money away. Do you really really need that item? Would your life end tonight if you didn't buy it until it came on sale again? Could you survive without it entirely?
Paying for name brand merchandise
Did you know how many of the big manufacturers also make products under generic or private labels? It's not that hard to find out, thanks to the Internet. Sure, your name brand copy is perhaps slightly higher quality. Maybe. But not much. Is it worth the extra money? Are you actually paying for the "shopping experience" and not the product? You know, the cushy designer showrooms, the TV's hanging on the walls, the expensive retail clerk waiting on you hand and foot while you decide.
Shopping in the wrong place
Do you wind up shopping in malls because it's convenient? Do you buy things in a store because you can't wait for the shipping delay from a discount operation on the Internet? Are you too lazy to travel the extra mile or two down the road where a warehouse outlet sells the same item for 40% off? Every day?
Do you buy things instead of rent them?
How many possessions have you purchased that just sat around after you used them that one time? Or worse, some "friend" borrowed it shortly thereafter, and you've never seen it since! When considering your long-term financial strategy, do your homework on the buy versus rent decision. Think of yourself as a business. That's what businesses do every day of the week - make decisions on whether or not it's more financially advantageous for them to rent something instead of own it.
What are your borrowing habits?
Do you use the library? Do you belong to any local clubs where member assets are shared? Do you collaboratively own any big ticket items with a friend or group of friends? (eg. RV, boat, beach house, mountain cabin) No? Why not?
How do you pay for things?
Do you save up your money and then buy things, or do you just pile up more debt on high-cost credit cards when the consumption urge strikes again? Have you ever added up how much more that interest (and the inevitable annual fees, penalties and other costs) are adding to the cost of your stuff? Ok, you better not do that. You'll be shocked!
Are you a couponer?
Do you get the entertainment book every year? Full price or at the discount price once it's a few months old? Do you look for coupons? Ever? The savings, as in most things, appears to be marginal, but over the years, it sure adds up.
Are you a tent camper or a Ski Lodge vacationer?
We all need a break from work. Recharge and rest. But what do your breaks cost? Are you roughing it outdoors or heading to the Swiss Alps for a 2-week ski vacation? When the adventure is over, all you have are the memories. Make some cheap ones! You can ski anywhere in the world at the drop of a hat if you're wealthy. Camp first, ski later.
Do you love your lattes?
You can burn through a grand a year, just drinking one of those everyday. Two grand, if you really get addicted and go morning and afternoon, and oooh, wouldn't that weekend visit be nice? Is that fresh whole bean bag of coffee really worth TRIPLE the Columbian generic brand already ground in the can? Are you drinking for status and to be part of the coffee klatch environment? Review your motives.
These are just a few examples of how you can put some distance between being broke at the end of every month, and creating sufficient personal working capital to start to build real personal wealth. You have to get up off the dime to get anywhere. You'll have trouble finding a serious investment that will take your $50. Or even $500. Making good financial decisions that everyone is forced to make every day can get you that nest egg. That initial chunk. It's the toughest part of wealth-building. Everything is easier, once you form the savings habit.
