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The Secret To Saving Money

By Cindy of Stone Marmot

Sept. 1, 2008

The secret to saving money can be summed up in three words: Don't spend it.

"That is no secret," you reply. It apparently is to most people. Judging from the behavior of most people, most think the way to save money is to spend every last penny they have on things they really don't need but got a "good deal" on.

Look through your closets. Look in your workshop. Look through your kitchen cabinets. How many things do you see that you rarely or never use? We end up with oversized, more expensive houses to contain all this extra stuff we rarely use. We have garage sales to get rid of, at a small fraction of what we paid for them, all this superfluous stuff.

I have friends that have closets full of sweaters and shoes that still have the price tags on them. I look at the price tags and see that the items were originally marked for $44 but marked down to $11. They saved $33, right? Not if that item is never worn or only worn once and is eventually gotten rid of because it has gotten mildewy or musty or is out of style or no longer fits. That person just wasted $11.

Bargains and sales are great if you are saving money on something that you actually had to buy, that you have a dire need for. But it is no "deal" if it is for something that is just going to take up space and collect dust. You might as well take a match to the money you spent on that item.

"But these items, even if only used once in a while, improve my quality of life," you say. But how much better would your quality of life be if you still had all that money that you spent on all these items sitting in a bank earning interest? Having that emergency cash reserve provides a lot of peace of mind against all the unexpected expenses that pop up, like medical/dental bills, roof leaks, car repairs, etc.

If you really want to save money, start recording every penny you spend, the date you spent it, and what you spent it on. Every so often, say, once a month, divide these items into categories, like food, clothing, dining out, etc., and add them up. You will probably be quite surprised how much you spend in certain categories.

For most people, this feedback on their spending habits becomes a strong encouragement to save. We all have ideas on how important certain things are to our lives. When we see how much we spend on unimportant stuff, there is a stong incentive to correct this imbalance. It often becomes like a contest with ourselves to see how low we can get the spending in these more trivial categories.

This could also help you get rid of your bad habits, such as alcohol, tobacco, or junk food. Part of the problem with these habits is that many refuse to admit that they have a problem. But if you are only making $500 a week and you are spending $70 of it on tobacco or alcohol, it is had to deny that you have some sort of problem here.

If you started recording all your spending, you are likely going to be surprised at how much goes to "fixed monthly expenses." But many of these aren't fixed and don't even have to be monthly. Do you really need all those options on your cell phone or cable TV packages? Do you even need a cell phone or cable TV? These companies claim that is only a dollar a day for their service or additional feature. But this quickly adds up over time to a lot of money.

Savings can be found on even the so-called utilities. Other articles in this blog by Bruce and Sid address some ways to save on your electric bills. I discontinued my long distance phone service and just use calling cards for long distance phone calls. I have found this to be much cheaper than the $3 to $4 minimum monthly fee for long distance hookup for my home phone, no matter who I contract for the long distance service. I can still make toll-free calls from home, which lets my access the number on my long distance calling card and make long distance calls from home, or anywhere else, for that matter.

So the next time you consider buying something, ask yourself if you are really going to use it all that much. If not, don't buy it, no matter how much the advertised "savings." I find chanting to myself the mantra "The secret to saving money is to not spend it" everytime I consider opening up my pocketbook has deterred me from many purchases. Try it, and recording all your expenses.

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