Overcome your worst fear: Learn How to Save

Raise your hand if you think saving is a good idea? Now out of everyone who raised their hand, keep your hand up if you actually save. Here is where almost everyones hands go down.

When you ask anyone to save a certain amount of their pay check, they will most likely agree that it is a great idea but they claim they can’t because they’re already pushing their limit within their budget. To save money from your current income will mean reducing your standard of living and that may be moving into a smaller place, not driving a fancy car, eating cheaper foods, or not able to enjoy your daily morning Starbucks. But because peoples lifestyles are all built on habits, even if they can agree that saving may be a great idea, the actual thought of reducing ones lifestyle is so unacceptable that they are not able to discipline themselves to take the first step.

Believe it or not, saving has always been a part of your life. When we were all growing up, we were given allowances and also were encouraged to save our money. Back then, we looked upon money as a tool to buy happiness whether it be in forms of toys, candy, ice cream, or cookies. Therefore as a result, we also naturally begin to look upon saving a way of punishment, which means depriving ourselves from the toys, candy, etc. At an early age, people begin to associate savings with pain, sacrifice, loss of pleasure, satisfaction and happiness. Now as adults, this habit is manifested in our desire to want to spend money as soon as we receive our checks.

Well instead of telling you how you can overcome this habit or cutting back on your current lifestyle, heres a different route. From this day forward, you need to save 75% of every increase in pay you receive from work.

How does this work?

This is something that you can do because it does not require you to lower your current standard of living, in other words, you don’t yet have the money built into your daily lifestyle. It is easier for people to commit to saving money that they don’t have than for people to agree on saving by cutting down on their current lifestyle. In order to become wealthy, you need to develop these habits.

So starting today, commit to save at least 75% of future raises in income. The earlier you start, and the rate at which your income grows, saving 75% of your future increases in years to come will allow you to acquire an enormous amount of money. Developing this habit will eventually make you financially independent.

[photo credit]

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  3. i am in such a debt trap that I wont be able to save my income…to generate enormous wealth but surely i am trying to save to reduce my debt. The idea of saving as a punishment to you is excellent.. now i am cutting down my lifestyle (punishing myself) to get out of debt.Growing my money will be my next step :)

  4. This is some very information, I just finished up my paper for class and think i may need to bookmark or save this for the second class lol. You may have just made me a regular :)

  5. Yes, sometimes, I encourage people to have forced savings, eg. arrange with bank to have auto transfer of fixed amount monthly to another savings account. Or paying fixed premium for a savings insurance. Of course if you are discipline person, you can follow the plan exactly. If you are not confidence, may be a saving insurance that force you save monthly is another good option to consider.

  6. One thing my wife and I have beeen good at is debt management. The only debt we have is a mortgage payment. We don’t save the 10% of our income the experts suggest, but do put away a small percentage that goes towards RRSP and RESP each month.

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