Elevate. Make saving a top priority in one's life. As I wrote in an earlier post, Saving is the starting point for building one's wealth. The key habit to develop is to pay oneself first, don't touch those funds, and invest and grow those accounts.
Saving part of the amount is the first thing I do with any money I receive. This includes my paycheck, a pay raise, gifts of money, tax refunds, stock gains, and winnings.
Eliminate. Right now, most of us do not have any additional money to save. To create money, I needed to eliminate spending. For me the best place to start were recurring expenses. Here are a few of the things I eliminated (or never started):
- Cable television. This is a recurring cost of $30 to over $100 for many people.
- Telephones. I chose not to add a cell phone. For others, it may make sense to eliminate a land line.
- Credit cards. If one carries a balance, consider eliminating credit cards to eliminate credit card debt.
Automate. Once one has elevated savings as priority and eliminated unneeded recurring or unnecessary spending, a third step is make the savings transfer effortless. I have my savings deposited automatically, before any bills are paid. Thus, I don't even see the money. When I first started doing automatic deposit, I did notice the reduction. However, I no longer notice the deduction, since I am used the "after saved" amount of my paycheck.
These are environments and behviours I have created to help me save. I will continue to use these during the Retirement Saving Challenge.
Remember, the Retirement Saving Challenge starts on July 1, 2007. Join the fun.
For more on Reaping the Rewards, check back every Friday for a new segment.
This is not financial advice. Please consult a professional advisor.
Copyright © 2007 Achievement Catalyst, LLC