This article will show you why is important to save money and how to deal with it. The Low of money says that “money goes to money”. As much money you keep as much more you start to attract. Following these simple 6 steps may change your life dramatically!1. Mentality
Many people don’t save because they don’t have the mental ability to save money. The very first thing you should do right now is to understand that saving money doesn’t mean you should restrict yourself in spending money at all. You must adjust your mentality to think and see saving money process as a different way to manage your own money. Everybody can save. It doesn’t matter if your monthly income is $200 or $20 000. By saving money you will be more secured, more self confident and you will attract more and more money to flow to you. You should imagine yourself as a working business company where the income is more than the outcome. And your savings are your profit.
2. Create a saving goal
It doesn’t matter if you have or not money in the bank in that particular moment. What does matter is how much money you want to have in the future. Now write down the number of your total monthly income and see what 10% of this number is. Multiply it by 12 and you will know how much money you will have after 1 year in the bank. This is your minimum goal. Most people think that they need all the money they earn. But I guarantee you this is not the reality and this 10% will not change your life at all.
3. Make a budget
In the beginning of the next month start making a budget. This is a very important thing to do during your way to success. It shouldn’t be something very complex. Just open an excel table and write columns named “bills” “clothes” “gas” “food” etc. Put everything that you know spend money during one normal month. The column “other” should be not more than 10% of the total sum. I expect the first month this column to be a lot more but when you change it to less than 10% this means you already know where you spend your money. This exercise will take 5 to 10 minutes per day, but will give you enormous information about your spending. You will be surprised of some of the things you will see.
4. Open saving bank account
Decide to open a bank account where the money flow will be only one way. This will be your saving account. This step will give you the security of knowing that there is always an amount that is increasing every month that can help you in a crisis situation. The result is that you will become more confident in yourself, you will start to attract more money to you, you will stop worry for money problems, and you will start thinking only how to increase your cash flow.
5. Pay to you first
Why most of the people cannot save money? Because when they get the paycheck they first pay all bills, buy food and primary goods for the family, then spend for things that they actually don’t need and at the end if something left they put it somewhere aside as a saved money. The problem is that there is never something left! If I start paying you double from next month you will not save those money, but very soon you will buy new car, better clothes, start going out more to restaurants and spend more and more money for things that before you never have bought. This is why you must change your money management. Next month when you receive the pay check, be sure that the first thing that you do will be to put 1% , 5%, 10% etc ( it’s how much you decide after doing step 3) in your saving bank account. In other words you should pay to you first.
6. 50/50 method
This is how it works. Let’s say you earn $1000 per month. You decide to save 10% which is $100 and live with the other 90% ($900). Soon you will notice that you don’t have problems living with this amount and the “loss” of 10% of your monthly income doesn’t change your live dramatically. Now let’s assume that at the start of the 6th month you are promoted and instead of $1000 you start receiving $1500 as a monthly salary (which I wish you). 50/50 method suggests next month when you go to the bank to have half of your added money (in our case this is $250 which is half of $500) and add them to your previous amount of your saving money (meaning $350), and start living with the other $1150. The result is that you increase not only your monthly salary but also your saving amount and more and more money start flowing to you. It is a very powerful way to increase your saving account faster.
