Live Frugally or Die Broke

You Are Your First Priority

When I first began saving money, I saved passively. I would put money into my savings account after all of my bills were paid. The money at the end is what I would keep. I may have gone out and watched a movie or went bar hopping with friends, in lieu of paying myself. I never had a savings plan, I just saved the leftovers from these activities. Once my next paycheck was upon me, the remainder of the previous paycheck went into savings. I was putting away money diligently every few weeks. Eventually I realized that this was an incredibly inefficient way for me to save money. By paying myself in this way, I was saying that I came last in line. I would pay my creditors first, my bills next, and after hanging out with my friends, I would pay myself.

I involve a little more mathematics to my budget now. As soon as my paycheck comes, I appropriate a large percentage of my discretionary money to my emergency savings account. This insures that I am getting the most of my money. I force myself to live more frugally, by creating barriers which prevent me from blowing my money on wants. Utilizing this new method of paying myself first, I am watching my savings grow at an incredible rate. The trick is to prevent yourself access to this money, by moving it into a savings account you don’t have easy access to. This is why my online savings account through HSBC has been a great tool.

A Change In Psychology

By paying yourself first, you are declaring that you are the most important object in your financial goals. You will feel a psychological change that increases your happiness. As a result of your increased savings contributions, you will start to feel in control of your financial life. Suddenly you will start to realize you have full control of your finances, rather then them controlling you. Financial problems are one of the leading causes of depression. These people don’t need to see doctors or psychologists. Simply creating a budget and saving money can work wonders on your mood. I noticed I fall asleep easier at night. I used to have trouble getting rest knowing I was spinning my wheels by not saving.

Next Stop, Financial Independence

After you have learned how to reach your savings goal more quickly, financial independence is within reach. Even with debt, bills, and payments, you are learning the importance of saving. You will be maximizing what your money can do for you. After some snipping and cutting of some of your budget items, the amount you pay yourself will grow. Soon you will watch your money multiply under compound interest.

You could certainly appropriate this money to future goals like a house, a car, or a wedding. Instead a better idea, is to split these up into separate accounts. You can start funding these separately from your main account. This is the account that you continue to pay first above all other bills. Before you know it, money becomes a simple tool that you wield like an expert. Not much different than the way cavemen eventually learned to master fire. I am sure they were deathly afraid of it at first to.

Convenience Is Good
Last night I had to run to the grocery store after work. It was one stop, in a series of errands I was running. I also needed to stop by the post office, bank, and laundromat. I had a long day and was looking forward to getting home as soon as I could. There was only one register working, at the grocery store, so I hit the quick lane. I don’t use the quick lane much but I’ve noticed the grocery store has cut down on the amount of cashiers. I always thought I needed to use a credit card at this lane, for some reason. I didn’t realize I could use cash at the quick registers, until I noticed the option at the checkout screen. Needless to say this shocked me as a great way to pay for groceries. If I no longer have to use my credit card when grocery shopping, I will be more price conscious of my items. That wasn’t the only shock that hit me while I was shopping.

Find A Hub
One of the reasons I needed to stop by the post office, was to pick up stamps and send out a few bills. I noticed an ATM near the quick check out and went dashing over to the machine. I was able to take care of my deposit at the grocery store, instead of making the drive across town. Remember I believe in creating barriers. I want to quickly get the money I made from pizza delivery and get it into the bank immediately. This way I don’t feel like the money is burning a hole in my pocket. Once I made my deposit, I noticed the ATM had an option for stamps. Now I knew this was possible, from working at a bank, but it had slipped my mind until now. I purchased a book and then started to leave. That is when I noticed a convenient drop box that had been installed at the exits of the grocery store. This was a place where I could drop off my bills, using the newly purchased stamps I had bought. As I left, I remembered my girlfriend wanted me to pick up quarters for laundry. I usually stop off at the laundromat and exchange my cash for quarters there. Instead I decided to ask a clerk if it was ok to exchange my money for a roll of quarters. When I realized this was possible, I returned to the ATM. I was able to get my quarters, bills, stamps, and deposit taken care of in one fell swoop.

Convenience is a great tool that all frugal minds should embrace. Cutting down on our travel time does two things. First, it cuts costs associated with driving. This could also be associated with a gain in opportunity cost, with the amount of time we also save. Although secondly and most importantly it cuts down on impulse purchases. If I had decided to travel to the bank, it’s possible I would have passed by a local Burger King and wanted some fries. Perhaps I would have needed to purchase gas, on the way to the laundromat. When I went inside, I may have felt compelled to buy a soda, a pack of gum, or a few lottery tickets. Luckily, since I was able to avoid all of this, I saved a lot of money in the process.

Multitasking Is Key
We should all be looking for ways to cut back on time wasted while running around the city. Try and plan your activities to take care of many tasks at once. This trip to the grocery store saved me countless minutes, in my after work melee. I was able to get home and rest, instead of spending time wasted on the road. I will take mental note of what I learned at the grocery store today. In the future, I hope to cut down on wasted time whenever possible.