In the last article that was published on this site, we discussed how consumers can pay down credit card debt. In this article, we will deviate a bit from discussing debt by focusing on saving money. In a way, it is still connected because the more you can save money, the more you will have for debt payments.
Of course, increasing your savings every month is easier said than done. Some people start at it with all the enthusiasm in this world but end up failing to complete the goal. Living in a consumerist society makes it a bit tough to accomplish this feat. We are all driven to spend extravagantly to appear affluent in the eyes of the people around us.
In light of recent events, we all know that this is the reckless way of living your life. You can no longer afford to keep on spending beyond your means. You have to serious start saving money. But how can we do this?
Real people with real stories that help them save money
One of the best ways to get people started on saving is to provide them with success stories of others who have saved up for their financial goal. We have searched the Internet for some of the best stories of people who have achieve their saving goals through pure determination, sacrifice and self control.
Here are three of the most inspiring stories that we have come across.
Couple saves $90,000 by cutting back on entertainment activities.
An article in the New York Times revealed how they saved $90,000 so they can buy a Manhattan apartment. NYTimes.com revealed how the couple (Janey Lee and Pablo Aguero) were having financial difficulties because of credit card and student loan debts. Their wedding bills were also something that hindered them from buying their own home.
To be able to save up for the down payment of a $450,000 apartment, they did something that obviously, will be tough for a lot of us – they gave up on entertainment expenses. This included sacrificing new clothes, hanging out with friends, new gadgets and cookware. They were so determined to buy a home that they were able to give up smoking! Not only were they able to save money for the down payment in five years, they started living healthy lives too. Whenever the temptation to buy something is there, they ask themselves which is more important: the gadget or their own home? That helped them control the urge to buy something new and just prioritize saving money.
A woman saves $15,000 by using her hobby to earn more.
In a Bankrate.com article, we found out about Elle Green, a woman who is known among her peers to make a great sweet potato cake. Since she wanted to buy a car without putting herself through debt, she decided to capitalize on what she is good at. She baked her sweet potato cake and sold them to family and friends. She attached little notes that indicated a price of $45 to $55. She didn’t think that they would buy it because she used to give it to them as a gift. But given that it tasted so good, they did! In the end, she was able to buy a new car in cash. She accomplished all of these while maintaining her full time job.
Unlike the previous story, Elle opted to increase her income by doing something that she loved to do – baking. There were doubts at first but she took the risk and all the hard work paid off. She drove her new car with pride because it felt so good to pay for it in cash.
A household saves $30,000 by living on a one income household
DailyFinance.com gave us an inspiring story of how a household had to take on extreme measures to save up for their growing family. When Greg Craig’s wife got pregnant with their second child, he knew that they wanted her to stay at home for at least a year. That meant saving money that amounted to $30,000 and they had to do it in 7 months! What they did took a lot of adjustments because they decided to live on one income to meet their target.
They continued to contribute to their 401(k) and kept their hands off of their emergency fund. But they cut back on a lot of luxury expenses like eating out, premium cable and even lunch at work. They made a list of things to buy so they will only spend on what is really needed. They thought about every expense before they made it and in the end, it worked out pretty well.
Their method of saving money did not only help them reach their saving goal, it also allowed them to practice living on one income while his wife stayed at home. When the baby came, they were all used to their lifestyle that hardly any adjustment was needed.
There are other inspiring stories of how people coped with their financial difficulties and still reach their financial goals. In fact, here is an additional story that we found from the Anderson Cooper files about how a family opted for extreme downsizing to help save money.
How to save money for your financial goals
In the end, it is all about what you are willing to sacrifice in order to reach your goal. Given that thought, here are 5 tips that you can find useful in saving money.
Condition your mind. Our consumerist society, with the help of credit cards, have changed out buying perspective over the years. If you are serious about reaching your saving goal, you may want to keep in mind the value of the goal that you want to reach. For Greg’s family, it is the welfare of their children that enabled them to make the necessary sacrifices. That allowed them to save enough money.
Identify what you can sacrifice. Another tip is to identify what you can sacrifice. Increasing your savings would mean changes in your lifestyle. List what you can sacrifice and stick to it. Remember that no small sacrifice is too little. It will all add up to help reach your goal someday.
Plan how much money you will put aside for specific periods. When you are trying to save up for a big amount, the beginning can be quite daunting. This is one of the reasons why some people fail to even start the whole project. What you can do is to divide the saving goals into small portions that you will distribute over a specific time frame. For instance, the $90,000 over 5 years can be viewed as $18,000 worth of savings every year. Focusing on the $18,000 makes the whole goal less intimidating and more attainable.
Commit to the plan you have created. Of course you want to make sure that you will implement this until the very end. That means you have to correct the financial habits that will keep you in debt. Not only that, you have to make sure that you will discipline yourself to really put money into your savings account.
Review your plan regularly. Lastly, you want to review your plan every now and then. Looking at your progress will help motivate you to continue with your goal of saving money. If you get additional money like tax refunds or something similar, put it aside to help increase your savings.