Could it be the key to your financial success?
Having a Plan
by Solomon Broad
An Easy Budget Trick
Simplify Your Budget
The key to success is having a plan, and following it. Frugality is no exception. Succeeding with your frugal way of life can be made easier and more successful by having a well written, clear plan of what, how, when, why and who is going to be doing it.
Who - Who will be following the plan? Ideally, this should be everyone in your household. When your spouse leaves the doors and windows open, there is little point in you turning the lights off. You could even include lodgers, if you have them. The more people that are involved, the better. They are all extra hands and minds that can work together towards the common goal.
How - How will you go about saving the money?
Some ideas to get you started:
- Write down your plan, and review it often. Writing it down will help to fix it in your brain, and will help you spot any flaws. Reviewing it will remind you of things you could be doing better, or in a different way. It might help to get someone experienced in such matters to check the plan over, ensuring it's feasible. Above all, keep it simple.
- Be specific in what you want to achieve. It's not enough to say, "I want to save a lot of money." Instead, say, "I want to save (insert how much you want to save here) a week. I want to save [amount] this year."
- Constantly look for new ideas and new ways of saving money. A good place to start is the Internet. Look around your home, at every item you have, and ask how it can save you money. Your favorite reading lamp, for example, could have an energy saving light bulb fitted. These are a good deal less expensive than they used to be, and they can add up to quite a saving over the long term.
- Do your research. You might save money initially on a cheap pair of shoes, but in the long term, you spend more on replacing them. Buying from sites like ebay.com or amazon.com isn't necessarily the cheapest way to buy an item. Shop around, and check out all the available "deals." Don't be afraid to ask for a reduction for soiled or damaged goods. Go for quality over price or brand name.
- Keep a note of where all your money is going, and I mean all. That includes the 50 cents you spent on a bottle of soda. When you can actually see how much you are wasting, you're inclined to spend less.
- Look for an acceptable alternative. For example, recently, I was looking for an Office suite. Instead of spending a fortune on Microsoft Office, I chose OpenOffice.org, which is a totally free, fully feature Office suite. I saved myself nearly 700 USD! A brand name doesn't ensure quality. It does tend to ensure a higher price, though.
- Don't discount the idea of making more money. You don't even need to work for it. Check your bank accounts, and make sure that you are earning enough interest. Shop around for a good deal. Consider one of the new Internet banks, as they tend to have higher rates of interest.
What - What will you be doing to save the money? Coming up with ideas isn't always easy, but a useful tip is to brainstorm. Sit quietly, and write down every idea that you can think of, no matter how outlandish or extreme. Having a friend or family member join you can be encouraging. You can spark off one another's ideas. Only when the ideas stop flowing do you critique them.
When - When will you be saving money? Ideally, this should be constantly. Get organized, and you'll find it much easier. Keep the coupons in your purse. Make sure you are getting the best return on your money. Plan ahead. Make sure you follow the plan you set. Keeping it as words on a piece of paper won't help you save. Action is essential.
Why - Why do you want to save the money? This is the most important bit. If you aren't activated by this "why," then you are unlikely to succeed. Having a good "why" gives you a good basis from which to grow. Saving money to pay for a life saving operation will give you a good deal more interest in saving the money than wanting enough to buy a newspaper.
Get excited about saving money! Give yourself a pat on the back when you find a good deal! After all, you've worked hard to get it.
Solomon Broad has an interest in saving money, and is a big fan of such books as The Richest Man in Babylon .
Share your thoughts about this article with the editor. Just Click Here and tell us what's on your mind.
Debt from my past is preventing me from saving for my future! Tell us: Yes, debt is hindering my ability to save and I could use help dealing with it! or No, debt is not a problem but I am trying to get ahead financially!
More Money Tips & Tools
- How to get a faster tax refund
- Personal finance calculators everyone should use
- Why you should know your credit card payment cutoff time
- Saving-money secrets of the rich and frugal
- 5 low-risk ways to earn higher interest now
- How to save money fast
- 7 IRA withdrawals that don't trigger a penalty
- This week's Readers' Tips