Financial Planning

Now hold on. There are only three waysto save money? Absolutely — even though there are thousands of tips and tricks, there are still only three basic principles behind every way to save money:

1. Just Cut Back. Cut back, give something up, settle for a little less. Spend less by getting less.
2. Increase Efficiency. Find ways that you waste money and make some changes. Spend less by getting more.
3. Get Better Deals. Look for that great deal, buy cheaper, use coupons. Spend less by getting a better deal.

This article will guide you through the three principles behind saving money so you can easily spot and discover your own ways of shaving costs and stretching your budget. Let’s talk about how you can become a money-saving rockstar. For more ways to save money, check out the article How To Save Money.

1. Save Money by “Cutting Back”

One of the most widespread ways to slice spending is to slice the “getting.” Find contentment in getting less; find something that you don’t need, cut it out of your lifestyle and simply “settle.” By far the most “uncomfortable” way to save money, cutting back on your lifestyle is also the most surefire way to see instant results.

What You Need vs. What You Want

One of the effects of living in a “rich” society is that we often see a blur between what we need for survival and what we want for luxury. In order to start cutting back you have to divide all of your expenses into the following two camps:

• “Need” Expenses: If this money is not being spent in this specific manner, then your health will be affected on some level — whether short or long-term. Think: basic food, tap water, shelter, insurance, basic transportation, etc.

• “Want” Expenses: If this money is not being spent in this specific manner, it will not affect your health on any level. Think: new clothing, new vehicles, cable TV, satellite, internet access, movie tickets, fancy coffee drinks, desserts, etc.

Of course, there’s nothing at all wrong with spending money on what you want. However, unless you have an infinite amount of money, then your budget can only go so far. This means that at some point you’ll have to pick and choose what you will have and won’t have.

Picking What to Kick First

As we talked about above, you’ll have to make budget choices at some point. For every new expense, something has to be axed.

The most organized manner of figuring out what to spend your money on is to keep records of every expense made for an entire month. Add each item thats cost money and put it on the list. Now take each cost and organize it by importance. Whatever is last on the list is the next thing you can cut down on.

Of course, this isn’t the only way to save money. You can continue to have the exact same amount of savings without giving anything up. The following is the idea of increasing your efficiency to save money.

2. Save Money by Getting Efficient

In a Fortune 500 company, when the business decides to cut back on costs this is the primary method used. Businesses focus on increasing efficiency to stretch their funds. But this isn’t just about a businesses, and is also a fundamental principle that you can utilize as well. Find a way you are spending money inefficiently and find a way to get the same benefit in a different, cheaper manner.

One of the most popular means currently is to purchase a fuel efficient vehicle. A simple change in vehicles can save you thousands every year.

Example: Cable TV verses the Internet. Most major TV channels show full episodes of the TV show online — for free. This, coupled with simply renting movies to watch can provide a complete alternative to cable or satellite expenses. I made this decision several months ago and turned my satellite off — I haven’t regretted it or missed a show since.

3. Save Money with Great Deals

This is my favorite method because it just makes so much sense. Find a way slice your expenses without giving anything up or even changing anything for the sake of efficiency. The great thing about the marketplace is that competition constantly drives businesses to provide the same service/product as their competitors, only with an added benefit and/or cheaper.

These “price wars” mean that some companies are almost willing to pay you in order to earn your business for the long haul. I once knew a lady who subscribed to almost a dozen newspapers for the sake of the coupons; she more than saved money and sometimes even made some. Several times she was able to literally spend just a few dollars on an entire shopping cart of groceries. Incredible.

Four bonus tips for getting a great deal:

• Shop Online. Online shops have much, much less overhead, meaning they don’t have to pay a high rent, pay for checkers, pay for stockers — their costs are much less. This means they can offer the same product for even less than most larger “real” stores.

• Save Long Term. Though this “hurts” your budget at first, the long term impact will be much, much better. Rather than skimping out when you are buying something that you’ll use a lot, make sure to buy the most reliable product. A product that only needs to be replaced once per decade is almost always “cheaper” than something that must be replaced every year or two. Think long term.

• Coupons Save Lives. Coupons are everywhere. Before going to the store check the newspapers for coupons. Find websites that advertise coupons — the Internet can save you thousands of dollars per year.

• Secret tip: whenever you are buying something online and you see a “Special Offer Code”, make sure to open up another window and do a quick search to see if it’s listed online. Usually there are “internet coupons” that can help you save up to 20% in just 3 minutes of research.

There are literally dozens of ways to find cheap deals online, as we’ll be listing in the future. The internet, news — even just point-blank asking the sales rep can give you a discount.

Conclusion

Sometimes when you understand how the system works you can put the system to work for you. This means that you can spot your own ways to save money by simply keeping an open-eye and remembering the three basic principles behind saving money:

1. Just Cut Back. Cut back, give something up, settle for a little less. Spend less by getting less.
2. Increase Efficiency. Find ways that you waste money and make some changes. Spend less by getting more.
3. Get Better Deals. Look for that great deal, buy cheaper, use coupons. Spend less by getting a better deal.

This is just the beginning of saving money, and we’ll be talking about both the ideas and concepts of frugality and finding deals, as well as awesome money hacks and quick tips for saving some cash. I’ll be listing even more as time goes on, so make sure to subscribe for money-saving updates.