You're covered in debt, and it's starting to take over your life.
It can be student loan debt, business investment debt, car loan debt or recreational debt. Maybe it's that credit card you cannot for the life of you seem to pay off. In fact, the more you swipe your card, write a check or hand over the cash, a little part of your soul dies.
As a graduate myself, I completely understand the surmounting stress that comes with debt. The money you borrow and have to pay back takes time, and it's usually a very slow process.
Years ago, I asked my successful friend and mentor what her best piece of advice was for dealing with financial struggles. Out of everything she's experiences, she said, “Save 10 percent of everything you make.” I was shocked by her response, but she believes that's the real secret to financial freedom.
Since that very day, I've implemented this tool, and it works.
So, why on earth would you start saving money when you are operating in a deficit? Where do you even start?
No matter how minimal it is or how low the amount you save, just begin. Most of us don't even start because we don't see the value in saving $5 or $10. We think, “What's the point if I can't save a lot upfront?” As the old saying goes, “A little bit adds up.” In the beginning, it's not about the amount; it's about creating the consistency of saving.
As your income grows, so will the amount you save. If you're really uninspired, you might want to simply get an old coffee can or something to hold all of your loose change. You'd be surprised by how quickly it fills up and how inspired you'll become as it does.
Regardless of your age or size of your debt, just start. You won't regret it.
2. Keep your “transfers" to a minimum.
Most of us open a savings account, only to find we need those funds the next day for bills. Do your absolute best to keep a budget that works with your kind of lifestyle, and stick to it. Steer clear from the temptation to want to “transfer” over the funds into your checking because you want or need to spend it.
There is an option at your local banks to “hide” your savings account online and via the ATM. I would highly encourage you to do this. It keeps you from being able to see the balance in your savings account, and then you won't see that money as your own. That's because it's not, at least not right now.
What's tremendously helped me was seeing the money in my savings as no longer mine. This easy shift in your mindset can make all the difference.
3. Spend less and have more.
Recently, I have been obsessed with a new lifestyle called minimalism. It's the idea of owning less possessions, which actually allows you to have much more in your life. You have more freedom, time, pleasure, sanity, peace and happiness.
I've altered my entire life around this concept. As I took a look at all the stuff I was buying in order to make myself feel safe, included or “up-to-date” on all the latest trends, I realized it was causing most of the anxiety in my life.
One weekend, I went through my apartment and got rid of all my shit. Well, maybe I kept a few items. But, all the things that made me feel crowded or that I no longer used were trash. It was the most liberating feeling in the world.
For weeks, I've found that I have much more money to play with (and save). This was especially true after I decided I didn't need jewelry, new clothes, items or belongings for comfort, identity or emotional safety.
It's simple: In order to save money, limit your spending.
4. Ask yourself this one important question.
If there's one thing that has helped me save money more than anything, it's been adding this simple technique everywhere I go.
I ask myself one question: “Do I really need this?” Focus on the word need. You may have to define this word for yourself because basic needs are different for everyone. Well, except for the obvious ones like food and shelter.
I will say, asking myself this question standing in the Target clothes section is a bit embarrassing. It's especially weird when I'm basically hugging the item like someones going to take it away.
But, I can't tell you what a difference it made in the checkout aisle. Instead, I saved that money for things I wanted even more. Even in the grocery stores, I'd ask, "Do I really need this bag of chocolate?" I won't reveal that answer because you already know. Hell yeah a woman still needs her chocolate!
I also made a promise that if I found myself in a debacle because I just "had" to have that shirt or purse, then I would wait. And if I still wanted it that bad after six months, I would go back and buy it. At times, I did go back, like my beautiful, black, briefcase-type bag that I love so much. Most of the time, though, I didn't. I had forgotten all about it.
Often, the things we think we must have are only wants, not our needs and necessities.
And I'm not saying don't splurge. By all means, splurge. Buy yourself something nice and well-deserved. Ironically, the more infrequently you spend, you'll actually love and appreciate what you purchase much more.
One thing you should know is that saving money does not mean you lack abundance. It does not mean you live in a place of scarcity. It's not hoarding, collecting or grasping. All it does is prepare you for the future.
You know that business you want to start? Your savings can help. The house you want to buy? The place you want to go visit and see? Your next travel adventure? All of these activities can be more thoroughly enjoyed with money in the bank. It's plain and simple.