Do you feel like everything you earn you spent on comfort and indulge yourself? Do you save money each month or spend it each month?
When I was in my early twenties I used to spend all the money I got. Living a lifestyle where my monthly salary was spent pretty much in a week or so. I had zero savings expect if you count $50 as savings?
I was a big spender before I met my wife. I did spend money quite a lot even after meeting her but before that, I used money like never before.
Slowly but firmly I started to get it. If I were to travel abroad with my wife, I needed money. We couldn’t plan trips too easily as I didn’t have any savings.
I had to borrow money from my wife, so we could travel together and that didn’t feel too good. I have never liked the idea of borrowing money. I just hate the feeling of being in debt to someone.
It’s semi-ok to in debt to a bank, even though that sucks too.
Changing money habits and started saving
I knew things had to change so the first thing that changed was the lifestyle. I quit buying expensive clothing, I didn’t buy movies, video games in a while. I didn’t spend so much money in nightclubs and on alcohol.
I changed my money habits and saw how my bank account started to accumulate wealth.
I started to have more and more money. Around that time, we also started to save towards our own apartment. We saved around $1500 per month (each). It was a lot and doing that, didn’t leave too much in the bank account.
But that was the way we were able to buy our own house later on. In which we now live in.
So the big change you have to make in your life is your lifestyle. If you already leave a frugal lifestyle and work in a job with an average salary, your bank account should be thriving.
If not, read the next key points, how you can maximize your savings.
How you can save money every day?
It’s all about your lifestyle. Do you buy a cup of coffee every day? Do you own a car and have to travel with it to work? Do you have expensive lunches?
You see, the choices you make every day affect the bottom line.
At the end of the day, your bank account is either staying at the same level or has decreased by the number of choices you have made that day.
If you decided to buy a bit more expensive lunch and have a cup of coffee this morning from Starbucks. That decision you took will show up in your bank account.
You might think that so small decisions and choices don’t matter. They do matter. If you multiply those daily decisions by 21 (workdays per month), you’ll see that they do add up.
Cut those unneeded expenses.
Make your own coffee in the morning and take it with you.
Make your own lunch and save on lunch expenses.
It’s all about your daily decisions that determine how much money is left in your bank account.
The quickest way to save money
As mentioned before by my own example and how I spent my money on things that don’t matter at the end of the day. The quickest way to save money is changing your lifestyle.
Though I do have to admit that this is also the most difficult one there is. You might be used to live a certain lifestyle and it might someway define you as a person.
Remember that if you want to save money quickly, you have no other option than to reduce your spending or earn more. As we know though, earning more is a slower process than cutting spending.
So how much money should you save each month?
This is an interesting question as it’s all depending on the fact of how much you want to save?
I like to think of saving money in percentages. When you get your monthly salary, your savings are at 100%.
When day 1 of the month starts (assuming you got your paycheck last day of the month) and you spend some amount of your salary that initial 100% value decreases.
Now, the reason why I brought the percentage concept to you is that you should be saving around 20-60% of your salary if you want to make yourself rich.
You might wonder why 20-60%?
The reason is that the more you save the sooner you can retire and have financial freedom. I have placed a goal of saving around 50-56% of my monthly salary. And that 56% will be invested in the stock market. You can use a neat investment/retirement calculator like this: Investment calculator.
Why should you do this?
There must be a reason you want to save money, right? The usual reason is that you have debt or that you can see how your credit card debt is gathering and you are not able to pay them soon.
How can you save money super fast
Here’s a complete list of things you should do right now, to get your salary to stay with you and not run away from you.
- Change your lifestyle (as mentioned many times)
- Stop buying things to yourself
- Stop buying things to others
- Stop eating gourmet and luxury food (expensive cheese, wine, caviar, tenderloin steaks)
- Use public transportation
- Go only once a week to the grocery store and buy a whole weeks worth of food
- Buy only essential things that you truly need in your life
- Stop buying expensive clothes and try buying clothes from a sale
- Create lunch for your work
- Don’t buy that cup of coffee from your local coffee shop
- Keep a budget and track your spending
The list could be even longer but I think the things listed above are already things that make a huge difference to your savings.
It’s all about the decisions you take and make in your life. I once decided to quit spending altogether and invest in the stock market and I was able to save around 45% of my monthly salary with a family of four to feed.
You might already guess, that I didn’t indulge myself too much that year.
However, with that decision, I am now getting around $1000 every year in dividends. So it was and is worth it.
But how can you save money on a tight budget and with a low income
Let’s assume you have a budget that is like super tight and there’s barely anything to save from.
In these situations, it’s better to know why it’s so tight. Why is it that you don’t have any money.
Why is it that everything you earn slips through your fingers?
You might be in a situation where you feel like the money you earn, just isn’t enough. Is there anything you can do to increase your salary? Can you do extra hours?
If you can’t increase your salary, can you decrease your expenses?
Could public transportation be something you could try?
Could you go to such extremes and move closer to your work? More than often the workplace might hours away from your home and that creates a lot of expenses, gas as well as time.
If you know that your shopping behavior is under control and you don’t buy sweets, soft drinks, potato chips to yourself and you don’t consume alcohol. Then it could very well be that you should work more or change the job you currently have to a better-paying one.
If you have a low income from your current job, it might just be time to switch to another work for the time being. Until you get your budget and possible debt under control.
The ultimate saving plan
So I wanted to share my saving plan with you, in case you get something out of it.
It all begins with the idea of spending as little as possible. I think I live a pretty frugal lifestyle, though I do like to buy things for myself from time to time.
Those things don’t, however, cost too much to buy. Buying an eBook now and then doesn’t hurt the bottom line.
The main thing here is that you start to live as though you don’t like to spend money. You only buy things that are essential at that point in time.
I don’t mind buying myself a $400 ecourse to develop my business further. It’s because I know I have savings and that I make that $400 back (usually with the help of that ecourse).
Here are the steps I took to save $16,000 in my first year after changing my lifestyle.
- Create a goal for yourself, mine was to save 50% of my salary every single month
- List all the expenses you have in a year
- Cut all the expenses that you don’t need (subscription services for e.g.)
- You only buy food to stay alive
- Do a price comparison for the mandatory expenses you have (electricity, rent, etc) and see if you can make better contracts and deals with some of your service providers and landlord.
- Do not spend your money on anything else
Your job is to cut expenses and the less you do in your day to day life, the more you will save money.
Having fancy dinners, or expensive hobbies add up. It doesn’t mean that you can’t live a full and rich life anymore.
It’s just that you have to change the things that drain your salary to zero the most.
You cut back on those that cost the most.
You make yourself adapt to a new lifestyle and after a year, behold the amount of money you have.
It’s all about the daily decisions you make. When you hold back your urges to buy things day to day basis, you will see that after a month you have more left your salary than ever before.
I saw that in my own life and in my own salary and can say that it is achievable.
A final note
If you want to save money, start it today. Change your habits today and be ready to save money like never before.
It’s all about your decisions and how you choose the things you like to spend your money into.
Saving is not hard if you have a somewhat decent income and you know where you spend your money one. You shouldn’t feel like, you are not living fully when you don’t spend money.
You can live a rich and fulfilled life even without pouring your salary to coffee shops and alcohol (nightclubs).
Track your spending by the dollar and keep an excel spreadsheet available to include expenses into it. Make sure you are counting the things you spend money to.
When all things are done, you should see your bank account thriving with money.
Want to save this? Post this ‘How To Save Money Each Month’ post to your Pinterest board for later reading!
Bring in the discussion
Is your bank account currently empty? Do you feel like your lifestyle is sucking every bit of money you earn. Is there some special money saving method you have experienced that works the best for you? Do leave a comment below and share your top tips on saving money. Don’t forget to share this post with your friends and to your favorite Pinterest board.