5 Tips for Focusing on Saving

I worked out yesterday morning for the first time in about 10 weeks. That is when our 2nd child was born and therefore my free time was devoted to him. Today, I can barely walk because my legs are sore. When I pick up my children, I cringe because my arms are sore from pushups the previous day. I hurt and I  only did a 30 minute beach body workout. The way I feel right now summarizes my journey to save more and spend less.

Everyone knows that that it is a good thing to save more and spend less each and every day. Same can be said for exercising. Sure, there are those strange few people in the world that actually enjoy working out until they collapse. Just as there are some out there that enjoy saving every single penny they possibly can. For most of us though, it’s a challenge… and it can be painful. Last night I was talking to my lovely wife and we decided to eat out at a local food chain. We could have easily gone home and cooked something from our overflowing cupboards, but it is much easier to drive thru and eat some junk food. Just $18 later, we have our food and eat away. Does it taste very good? No. Does it leave us feeling satisfied and glad we ate something healthy (we didn’t eat healthy)? No. So why do we continue to do it? Because it is difficult to change our mindset from the past 30 years and it is the societal norm.

Another case happened the same night. We hired a babysitter to watch our 2 year old while we were out and we paid her $20 for 2.5 hours of playing with our 2 year old. I laughed with my wife, “$20 doesn’t seem like enough to give her”. We joked, “$20 doesn’t mean much to us”. I don’t say that to brag or act like we have a large money bin that we dive through each night. I say that because I don’t feel it when I pay $20 here or there because I have been blessed and I take my money for granted. When we got home, we gave the neighbor girl the $20 and she lit up like we just gave her 100 shares of XOM.

With the above in mind, these are the 5 things I do to stay focused on saving more and spending less. These aren’t new ideas, but they are important to review every now and then to keep on track:

1. Think before I spend – Every time I spend a dollar, whether it’s a bag of chips or a new lawnmower, I think about the money that’s being spent as money that is NOT going to be saved and invested.
2. Budget for what you want to save and invest, First! – You have heard the term “Pay yourself first”. I always take the money out of my bank accout first that I want to invest and then figure out how to make the budget work with what is left. This is opposed to the normal of “Well, I have $500 left over this month, I guess I will invest it”
3. Think about my goals often – When I think about my goal constantly, whether its retiring early, building a nest egg, or just getting an emergency fund, I make sure I review my goal often and think about it during the day. This will help me to understand the importance of it and also keep me focused when I need to spend as I mentioned in 1.
4. Be accountable when I spend – Somethings are mandatory to pay like bills and taxes. Other times it is a choice we make. I hold myself accountable when I spend money by telling my wife what I spent money on today. This does two things…. Keeps my spending in check and also makes me think again about the purchase. Seems silly to tell your wife you bought a bag of chips for $1 and it definitely is! That is why I limit it, because when I tell my wife, I feel foolish about it.
5. Look for ways to cut out the bigger costs – I am always looking at our expenses to see where we can cut back. Cable TV, Netflix, car washes, going out to eat, etc… Are these all necessary in my life or could we reduce them. I already reported how I cut my cable bill out and switched to Tablo.

I don’t stick to these 100% of the time and I also don’t beat myself when I waiver. I enjoy my life and certain aspects of it. There is no reason to spend nothing and save it all for retirement if you die before you reach that age. Life is uncertain and you need to enjoy every day. If you can’t enjoy life and save 80% of your income, then maybe set the goal lower and work up to it. I know that there are things in my life that are unnecessary. I can realize a higher savings rate by trimming out some of the excess in my life and focus on time with my family and friends. I am constantly breaking out of my habit and finding the need to refocus. Just like working out, when you get back into it, it hurts, but that only lasts a short time and then you feel good about what you have done!

I wish you the best and thank you for reading!

-Adam




Disclaimer: I am not a licensed investment professional. I am not liable for any losses suffered by any parties. Any information on this site is my opinion only and should not be used for investments of any kind.