5 effective ways to save money

Warning: This isn't your typical pop-culture magazine article about little ways to save like clipping coupons, turning off lights and faucets when you're not using them, or making a grocery list before you go to the store. You can find those tips everywhere. All of those little things can add up over time if they're done with attention, but this article is about making bigger savings.

Firstly, reducing your spending is futile if you're not already following a budget (that's step 1 to wealth after all). Without a budget you won't know where you can save and if you do save you'll probably just spend the extra money on more useless crap. Once you reduce your spending you'll need a useful job for your extra cash, which will also require a budget.

The reason all of the "tips on how to save" links online are all a little different is because people are unique. What works best for you isn't what will work best for your neighbor. So look at your budget and find the categories where you're spending the most money. These are where you'll have the biggest impact. If you try to save in a category where you only spend $10 per month, it will only have so much effect. Thus, here is a list of what are often the biggest ticket items and how to save.

Your Rent / Mortgage

Move into a smaller house, get roommates, or rent out parts of your house. The benefits of having roommates are plentiful. You get to socialize more, you get to meet new people, and if you die someone will notice! Lots of folks get along well with their roommates and have made new friends because of it. You'll never have to worry about accidentally getting locked out. The list of benefits goes on and on, without even mentioning the financial savings.

Your Probably Unnecessary Oversized Car and Your Second Probably Unnecessary Oversized Car

Sell your SUV or truck, even if you still owe money on it, and buy a smaller, reasonable, used car. Selling a car you already bought is not a waste. We aren't living in the past and you don't own the car in the past – you own it now and the best thing to do now is to sell it. You'll save money on gas and insurance and you'll look smarter than the SUV driving around with one person in it. Since you're an adult now you know that the car you drive doesn't define who you are and there is no contest to see who can drive the fanciest, most ridiculous gas-guzzling clown car, you can buy a reasonable 6-year old sedan. Or you can buy a bike and be healthier for it as well. Your vehicle isn't just costing you money in gas – there's maintenance and insurance as well. Cars are expensive.

Eating Out

Eating at home is healthier and tastes better. If you're going to actual sit-down restaurants it probably takes less time to eat at home also. Besides, learning new skills like how to cook is fun and makes you a more whole and more interesting person. <– This is for you my unnamed friend who didn't know that an egg had both a yellow part AND a white part until I prepared one for him.

Your Addiction to Smoking, Shoes, Beanie Babies, Etc

E-cigarettes make quitting smoking a lot easier these days because you can gradually lower the nicotine levels over time. You'll feel better and the people around will appreciate you not smelling gross, You'll also be more ninja-like, because ninjas can't be sneaky while they're coughing. As for shoes, well, all I have to say is... If you have some kind of collection going on ask yourself how much happiness it brings you and whether you could spend your time and money doing something that will ultimately make you happier. Maybe you'll be happier with more shoes and less money. Who knows?

Your Consumerist Habit of Buying New Things

You're already living with the gadgets you already own, without an additional room on your house, without tinted windows on your car, without a motorcycle, without Sirius radio, without the cutest ever apron that says "kiss the cook," and without lots and lots of other things. So don't change that. The great thing about not buying new things is it gives you more time to relax, reflect, and enjoy. There's very little that separates wealthy, productive, inventor type people from consumery, complainy-pants minutia lovers. If you asked both types of people how many fun gadgets and comfort items they have, one group would says "lots" and the other would say, "I don't know, I'm having too much fun being productive doing XYZ (insert current hobby here)."

So those are the big things that will have a big impact. Are you willing to change any of them? Most people aren't and that's why most people don't have a lot of money. Being better is being different. Will you be better, or will you be like everyone else?

Today there are whole communities of people who are making better life decisions. One actual real live normal person who's doing this is Yanely or "MissBeHelpful" on youtube. This video she made about saving half her income inspired this post. If she can do it, so can you!

The post The Most Effective Ways to Save appeared first on Wealth Psychology.

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