How to save money effortlessly

Money is very important.

It’s important because, whether you want to admit or not, it provides vital base for happiness in life. For me money is never an object, it’s just means to an end .i.e. happiness. Mind you, I’m not interested in being rich. I’ve got a clear (and realistic) figure how much I want for my present and retirement and I am working towards that goal.

Saving itself is not a problem for me. Maybe it could be considered to be a problem by some people because I save too much. Anyway what I’ve been thinking and striving to achieve is how to save smartly (=where/when to save, where/when to spend). I don’t want to blindly save on everything and end up losing more important things in life. I haven’t mastered it yet and do go through a moment of unsurety over subtle details but I’ve established three principles in saving and they don’t change. When I finish with this, I will move over to smart spending.

Firstly, save first and spend with the leftover.
Secondly, avoid debt.
Last but not least, don’t pay for punishments.

Not quite self-explanatory?
Let me start with the first one.

Saving is not something you do with the leftover. If you still have this notion, change it now. Set your monthly savings figure – a minimum of 25% of your net income – and get it out of your way (DD or standing orders) before everything. If you’re a salaried person, you know more or less how much you need for weekly/monthly expenses. I do a budget under three categories, which are general expenses (food, car, utilities, insurance, and telecom), mortgages (gib & spain), self-investment (gym, social, massages, clothing, eating-out, pocket money, and emergency). So what you see in your account is pre-calculated. You have liberty spend more in one area or less in another, so don’t pur yourself under too much restrain. My current ratios for these categories are 8%, 18% and 16%, and 58% being savings.

The only debt I approve and have is mortgages. Since I wasn’t born with a silver spoon in mouth, I couldn’t afford to purchase my house(s) outright and I highly value ownership of foremost necessities. Even then my mortgages are strategic and under control. I regularly overpay and a big chunk of my savings earn higher interests than my mortgages and I believe a bit of monthly discipline is healthy.
Remember, debt is a plague. Once you owe somebody, you lose control. So how to avoid debt? Treat your cash, debit card and credit card (only one) all the same. If you cannot trust yourself, go to ATM and take out YOUR (not from credit card)cash. Transfer money immediately after you make a purchase with the credit card. If you cannot do that, don’t bother going to a spending spree with the credit card.

OK, then number 3. Paying for your own punishments. It even sounds excessively torturous. Tragically, lots of people do that and don’t even realise it. It doesn’t matter how big or small the amount is. It’s the fact that you’re paying for your own loss. As I’m such a kind person, I’ve prepared a list for my readers.
1. Pay bank charges due to pure negligence.
2. Cash service from credit cards.
3. Leave lights on everywhere when nobody is present.
4. Let the water run while you’re putting shower gel on or toothpaste on your brush.
5. Leave your household appliances on stand-by.
6. Drive over the speed limit (it’s costly and even illegal!).
7. Not automating recurring utilities bills.
8. Buy at sales because it’s cheap and never use.
9. Overbuy (buy 1 get 1 free, etc) and throw away in the end.

Well, I think you know where this list is going. 🙂

Starting is always a difficult part.
Once you get the ball rolling, the rest is easy.
Trust me on this.