Saving money is a difficult task. Even though I am a Registered Investment Advisor, I still fall into the temptations of spending a few bucks on fishing lures. In order to curb such temptations, I view savings in a different light. Savings should be looked at as a non-discretionary expense, or a need such as your rent, when developing a personal budget. In simple terms, savings is an expense. If you build savings into your budget, you are automatically saving money thereby allowing you to spend additional excess cash flows on items like fishing lures.
To implement the strategy, create a budget in which you build in a certain amount of savings. Open up a savings account at your bank and set up an automatic ACH from your employer to your savings account. This will allow you to pull the money from yourself before you spend it. It will also create the mind set of “out of sight, out of mind’. It’s the same idea as if you stashed $20 in your drawer and 6 months later you find $20 that you thought you didn’t have, you feel RICH!
In conclusion, in order to seriously start saving money you have to rethink the idea of savings. It is no longer a want or savings, it is a necessary expense which YOU HAVE TO HAVE. If you combine this mentality with implementing automatic withdrawals from your pay check, you stop spending excess cash flow that should be put in savings.