by Steve Burden

Created on: September 28, 2010

We do not need to think very hard about spending our money - spending is so easy that too often, we do not think about it at all! Being unable to control our spending, is like surrendering to the flow of a river that will carry us downstream. Sooner or later, we shall reach a sea of debt. 

On the other hand, saving money requires a strategy. If we are trying to reform our tendency to spend, spend, spend, it will at first, feel as though we are swimming against the tide, but the results of a determined effort to reform our spending habits will soon begin to show in the balance of our savings account!  

The immediate affect of buying an unnecessary luxury will be less money in the bank. You no longer can use that money to buy that un-luxurious necessity! Regret at the end of the month needs to be used to add strength and grit to our determination to say "No" next time. Frivolous purchases do nothing but cause havoc in our finances. 

Strategy No. 1

Restrain spending. With no restraint, we cannot save.

Strategy No. 2

Have a plan for your financial position:

It takes a lot of work to prepare a detailed report of our financial condition, but we must set aside time to list all our out-goings and balance them with our income. An understanding of the principles of bookkeeping would be so helpful that if this is new ground for you, it is worth a crash course to understand how the figures show what is going on in your finances.

Once we know where we are, we need to pinpoint where we hope to be. Fixing a time limit usually introduces a certain pressure, but whatever plan we make has to be reasonable. 

If our income is fixed and most of our out-goings are fixed, it is straightforward enough to work out how the money should be apportioned each month. If there is any debt, this has to be paid off before establishing any savings account. Debt carries interest charges that only increase the amount owed. Clearing debt has to be the priority.

Strategy No. 3

When the debt is paid off, the money that was used each month to pay the debt can now be saved. This will make a huge improvement to your financial position! Have an account, specifically set aside for an emergency fund. This should grow to about three months-worth of expenses. 

It can take months or even years to turn around our finances, but the sooner we start, the better. Burying our heads in the sand will not impart any wisdom about how to escape financial trouble. There is always hope. Any 'Rags to Riches' story will have the elements of tough conditions being overcome by determination and a strategy for success. The lessons learned along the way are what makes the story so gripping. Begin your story with these money saving strategies!

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