What's the number one excuse when guys tell me they can't improve their style?
‘I don't have the cash.'
‘My bank account balance is zero.'
Money, money, money.
If you want to save up $1000, $10,000, or even $100,000 – these 5 simple tips WILL work for you.
They worked for me – in a relatively short time I saved over $100,000.
‘But Antonio – you've got huge advantages. An MBA from Texas. A million-dollar company. This came easy to you, right?'
Wrong! Like many of you, I've built myself up from nothing.
- I grew up in a trailer park.
- I've gone through a bankruptcy.
- My first business failed.
I've had to make those tough decisions – do I spend money on my mortgage or do I spend it on my business and possibly lose my home?
These five principles apply to you if you're making $500, $5,000, or $50,000 a month.
This information is going to help YOU save.
Now let's get into these 5 money saving tips. I'm sorry, gents – you're probably not going to like this first one…
1. Money Saving Tips: Get A Grip
You've got to face the reality of your current situation. Most people don't even know how much they're in debt because they bury their heads in the sand. You think if you ignore debt it might somehow go away. And I get it… because 10 years ago, that was me.
I was $100,000 in debt with various credit cards, plus student loans – I didn't even know the exact amount or the interest rates. And instead of dealing with my debt I kept moving it from credit card to credit card.
Finally I decided to bite the bullet. I put everything in a spreadsheet so I could see it – my checking account, my savings account, my debts, and my mortgage. So would I recommend that? Honestly, no – it's a pain to update.
These days I recommend a free app called Personal Capital. (I'm an affiliate, but they're not a paid sponsor.) I absolutely love this app. It GAMIFIES tracking your finances. And I've had other guys tell me it transformed their financial lives.
So what's cool about this app? It calculates your net worth for you. It actually compares your assets to your liabilities. Also, if you've got different bank accounts, credit cards, and loans, it brings them all together and puts in all the numbers for you. Much easier than a spreadsheet.
2. Money Saving Tips: Have A Realistic And Detailed Road Map
Do you have a realistic goal? Or is it more like this:
‘I'm gonna save up $100,000 by… saving $20,000 every year for five years!'
Why is that unrealistic? Firstly – the saving pattern. Most people don't save the same amount every year – you start small and build up as you earn more.
Secondly – you didn't work out how much you can actually afford to save. And all the money saving tips in the world won't help you if you don't know that.
So here's how to make a realistic plan.
First, look at your yearly take-home pay after tax. Let's say it's $29,400. If you want to save $20,000 this year, you've got to live off that $9,400. Can you do it?
To find out, see how your monthly income (in this example that's $2,450) stacks up against your monthly expenses. So break your expenses down like this:
- Rent and utilities – $500
- Food – $300
- Student loans – £200
- Health and personal care – $100
- Clothing – $200
- Transportation – $150
- Entertainment and eating out – $400
- Phone and internet – $100
- Car and insurance – $400
Oops… that's $2,350. You have $100 that you can save every month. So you're only going to save $1,200 this entire year. If this savings goal is important to you, you've got to either make more money or decrease your expenses.
Let's say you do a little of both – you get rid of the car and eat out a bit less, so you save about $500, and you pick up $500 worth of side work. That's an amazing swing of $1000. And now you can save $1,100 a month – $13,200 a year.
3. Money Saving Tips: Take ACTION
Importantly, now you have a detailed plan, you need to make the tough choices and take action. Firstly: are you earning the kind of money you want? For most people, the answer's no.
The amount of money you earn is not proportional to how hard you work.
Part of it's the industry you've chosen – if you work in a non-profit or as a teacher, you'll earn a lot less than a lawyer, banker, or consultant for the same hard work. And part of it's your role and its value to the organization – salespeople often earn a lot because they bring so much money into the company.
So maybe you want a new job. Or maybe you want to get some training that will enable you to get a promotion. Alternatively, maybe you want to start your own company – this may seem really risky, but the rewards of being your own boss are enormous.
Second tough choice: cut your expenses (and the key here is not to let them creep back up). Here are the money saving tips I use to keep expenses down:
- With a family of six, eating out gets very expensive – so we always eat at home.
- I don't drink alcohol (mostly because I don't like the effects, but it also saves a ton of money).
- I've had the same truck for 20 years.
- I've got a modest home in a small town in central Wisconsin – one bathroom for six people. My mortgage is just over $600 a month.
4. Money Saving Tips: Automate Your Money Saving
Next, set up an automatic weekly or monthly payment into your savings account, so you don't even have to think about it. Treat paying into your savings like paying any other bill. If you don't, you'll always find a way to spend more money. This is one of the MOST important money saving tips – I can't stress it enough.
I've got about twenty savings accounts for different goals, with automatic payments going into them every week. And again, with Personal Capital I can see it all easily and it becomes a game. I can see everything grow, I can move money around, and I'm almost addicted to it – it's that much fun.
5. Money Saving Tips: Protect Yourself From Yourself
This one might sound funny, but it's one of the smartest money saving tips out there. You need to make it difficult to withdraw money from your savings accounts.
I've set mine up so I have to physically go to the bank. Also, if you're in the States, consider putting some money in a Roth IRA (Individual Retirement Account) where you can't touch it without getting penalized.
If it's too easy to spend money, you'll spend the money.
And another tip to protect yourself from yourself? Have a separate emergency fund (a credit card is not an emergency fund). When you have a few months' living expenses set aside, if you lose your job or get hit with a crisis, you won't have to raid your other savings accounts.
Bonus: Make Saving A Habit
This next step to supercharging your savings is really important – because when you're getting started and you can't save as much money as you wanted, it's tempting to give up in frustration.
It's the spending habits that matter – not how much money you're saving.
So say in your first year you only save half the amount you planned to. You might think, ‘This sucks – it's going to take me twice as long!' But don't worry – that's not the way it works. Keep up the habit and in a year or two you'll get a new job, start earning more, and be able to pay in two, three, four times what you planned to.
Summary: 5 Money Saving Tips
Got all that? Here's a quick crib sheet:
- Get A Grip (Face Reality)
- Have A Realistic And Detailed Road Map
- Take ACTION
- Automate Your Money Saving
- Protect Yourself From Yourself
Bonus: Make Saving A Habit
Simple… but not easy. You do have to take action. But whether you're making $300, $3,000, or $30,000 a month, these principles will work for you. And I can tell you from experience that taking control of your financial destiny feels amazing.
Ready to take action? Start by grabbing that free app I mentioned – click here to make your dreams a reality with Personal Capital.