As you can see, on the right, I have been tracking how much money I save on a daily basis. I update this figure daily using a pretty simple formula that anyone can apply. I have been keeping track of all the ways I have decided to save money; No coffee purchases, coupons, renegotiated bills, and simply cutting out some bills. I save about $38.00 a day without doing anything. In my mind, its FREE MONEY!!
Here is how you can collect your free money..
1. Set Goals: Before you use the formula you have to set a goal. Be realistic but don’t make the goals too easy, otherwise you wont be inspired to work towards it. Setting a real goal is critical to any strategy. You should go as far as to say how much you want to save and how long you want to afford yourself.
Set a monetary goal to achieve something great for yourself or your family. One of my goals was to buy a new computer for my house. I knew exactly what I wanted and how much I had to save to achieve that goal. Every time we reach our goal, we execute the plan and set another goal.
Once your goals are established, you should analyze exactly how you would intend on achieving the goal.
2. Create a Plan: Create a plan of action that you have to follow in order to reach your goals. Now that you have your goals and you know what you have to do to get there, put your plan to action. Keep track of your progress on a daily basis so you can reinforce your positive progress. Your plan should the following steps:
- Analyze and Renegotiate household fixed bills.
- Analyze daily spending habits. Update the way you spend your money.
- Be creative. Are there things you buy that you could get for less or even for free?
3. Start Counting: Once you have a plan and your living by it, you can start counting your money. It is important that you keep track of how much you save and realize how easy it was to save the money. It will simply inspire you to save more. You should also keep track of the times you break from your plan. I admit, there are days that I stop for coffee and drop $3.50 on a mocha, half decaf, venti, grande, whipped, coffee blah blah blah.. that simply comes out of my daily savings plan.
What not to count…
There are things that I have chosen not to include in this process simply because you should be doing it anyway. I do not count retirement plans (IRAs, Roth, and 401K), 529 Savings Plan, Weekly disbursements to savings account (10% of salary), Emergency fund contribution, etc, etc…
Follow these basic steps and you can live rich. You can eventually buy anything you want and you can eventually incorporate your free money into you budget.
Let us know about your savings plans and what works for you.