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Saving Money Principles

by Liliana Usvat

How to save money

1. Focus on what you have not on what you do not have. ( Law of attraction)
2. If you have trouble with overspending, try the envelope budget system where you use a set amount of cash for most spending. And once the cash is gone, it's gone.
3. Keep track of your income expenses and equities every week
4. Save between 10-50% of what you make all the time
5. When you plan to spend money never spend more than 50% of what you have saved.
6. Pay yourself first or set money aside before paying the bills.
7. An emergency fund is a must. .. you need an emergency fund somewhere in the ballpark of three to six months of your income. Start small \$500 at first then add to this amount.
8. Save your coins - literally. Putting aside just 50¢ a day over a year will get you almost halfway to an emergency fund.
9. Use the 24-Hour Rule. Avoid purchasing expensive or unnecessary items on impulse with a self-imposed 24-hour rule. For any non-essential item, wait 24 hours before purchasing. It’s perfect for online shopping where your items can simply be added to your cart to purchase later.
10. Calculate purchases by hours worked instead of cost. This mental math tactic really helps you to #ThinkLikeASaver. Take the amount of the item you want to purchase and divide it by your hourly wage. For example, if you’re considering a \$50 pair of shoes and you make \$10 an hour, ask yourself if those shoes are worth working for five hours. Sometimes they are, sometimes they won’t be.
11. Pay off credit cards in full each month. The miles and cash-back are only valuable if you're not falling into debt or paying interest.
12. Use only the ATMs of your bank or credit union. Using the ATM of another financial institution once a week might seem like no big deal, but if it's costing you \$3 for each withdrawal, that's more than \$150 over the course of a year.
13. Check your credit report for free once a year. Use your annual free credit report from the three credit reporting bureaus to look for inaccuracies or opportunities to raise your score. Credit scores are used by loan providers, landlords, and others to determine what they’ll sell you, and at what price. For example, a low credit score can increase the cost of a 60-month, \$20,000 auto loan by more than \$5,000.
14. As part of his regular savings plan, allocate money towards short-term and long-term goals.
15. Make your own coffe or tea.
16. Make your own lunch.
17. Walk in the forest once in a while and plant your favorite fruit tree in your garden or neighboring park.
18. Learn Permaculture principles of self sufficiency.

### Principle 1: Observe and Interact

• Track your spending: The simple step of keeping a pocket notebook
• Make a budget: Once you have a month or two of personal spending data, use that data to create a real, accurate picture of how you spend each month.
• Make better conscious decisions about spending, saving, and investing: When you’re in the moment and about to spend some of your hard-earned cash, pause for a moment and ask yourself if that purchase makes sense and whether you could get the same item or experience elsewhere for less money

### Principle 2: Catch and Store Energy

• Build an emergency fund: The moment when things are going well is the best time to put aside a little bit of cash for those moments when things aren’t going well. Some time in the future, you’re guaranteed to have a crisis that you’re not financially prepared for, so do what you can now to make sure that you’re ready later.
• Start a side gig to earn more money: Avoid relying on just one source for all of your income. Look for some way – any way – to start building another method of earning money, whether it’s recording YouTube videos or writing e-books
• Maximize your professional opportunities: Take advantage of every opportunity you can to bolster your career. If your employer pays for conference or convention attendance, jump on board. If your boss asks for a show of hands to volunteer for leadership or public speaking, stick your hand up.

### Principle 3: Obtain a Yield

• Invest for retirement: If you’re not putting away money for retirement, you’re making a huge financial mistake. Real Estate investments are the best. It is a passive income
• Invest for your other goals, too.
• Use frugal tactics that result in a drop in your bills

### Principle 4: Apply Self-Regulation and Accept Feedback

• Track your spending changes over time in the form of your net worth:regularly calculate your net worth and then see if it is growing over time by comparing your net worth today to where it was at a last week , last month and a year ago.
• Trust that data, even when it shows you a negative picture: The numbers are giving you an unbiased look at what you’re actually doing.
• Address your mistakes head on and look for new ways to improve your situation: When you see a problem, don’t look for reasons why it’s not really a problem. Instead, ask yourself how you can fix it and actively look for solutions.

### Principle 5: Use and Value Renewable Resources and Services

• Buy secondhand things: Before you go off and buy a new item that could easily work as a secondhand item, do some shopping at your local secondhand stores.
• Invest in things that will constantly produce value for you: A well-positioned shade tree in your yard, once grown to sufficient size, will trim your energy bills by providing summer shade and reducing the work done by your air conditioning.
• Invest in yourself: Investing in yourself is always a good choice because it’s something that no one else can ever take away. Invest in a solid education. Invest the time and energy needed to keep your mind and body in good shape.

### Principle 6: Produce No Waste

• Minimize the trash you throw away: Rather than simply throwing things away, look for better approaches Is there someone who might use this item you’re throwing away? Selling it or giving it away to someone who might use it is better than throwing it away.
• Start composting: If you find yourself with extra vegetable scraps, throw them in a small compost bin. When you fill it up and rotate it regularly, it becomes rich compost, which is wonderful for gardens. Some people will even buy mature compost.
• Buy reliable things:  choose to spend your money on items that will last for a long time.

### Principle 7: Design from Patterns to Details

• Figure out your long-term goals: What are you working for? What are your big dreams in life? Where would you really like your life to be in five years? How about ten years? Spend some time seriously thinking about your true long term goals in as much detail as possible.
• Break down those long-term goals into actionable steps you can do each day: break down those goals into little things that you can take action on today. What’s the first step toward that big goal? Can you do that today?
• Take action on those steps: Once you’ve identified the next actionable step on your goal, do it! Don’t just think about it. Take that action now.

### Principle 8: Integrate Rather Than Segregate

• Look for every opportunity to “kill two birds with one stone”: Whenever you have a chance to make a single purchase that takes care of two needs or achieve a single task that takes care of two things that need done, take advantage of it. Be efficient with your money and time and energy. For example, rather than going to the grocery store three times in a week, spend a bit of time planning ahead and make a list so you only have to go once.
• Have a smart to-do list: One of the biggest advantages of online to-do list managers (like Todoist and Remember the Milk, my two favorites) is that you can add contexts to your tasks.
• Focus on buying multipurpose items instead of unitaskers: Rather than buying a bunch of items to do similar tasks, buy just one that can do all the tasks; rather than buying complicated items, look for simpler ones.

### Principle 9: Use Small and Slow Solutions

• Increase your investments a little at a time: Don’t start off by investing half your income – it’ll never work out. Instead, start off by contributing just a little. Over time, you can keep increasing your investments as needed.
• Make room for those increases with little efficiency improvements: As you find new avenues of smart frugality in your life, you’ll find yourself effortlessly saving more and more money. It’s pretty easy – and pretty smart – to channel that additional savings into your investments. Let frugality fuel your investing!
• Focus on long-term value rather than the short term: This isn’t just about investments, but all of your purchases. Always look at that long term value above the immediate sticker price.

### Principle 10: Use and Value Diversity

• Try lots and lots of different frugal tactics:  find strategies and products that end up saving me money and often work better than old way of doing things.
• Try lots and lots of free and cheap hobbies and activities in your area:  Try everything that’s free or cheap that’s available in your community or in your imagination.
• Keep the ones that click; discard the ones that don’t: This is the key to every single money-saving strategy out there. Some will simply not be enjoyable. Others will be more work than they’re worth.

### Principle 11: Use Edges and Value the Marginal

• Don’t skip over “small” frugality tips: These tips can still be useful if they just directly replace some other similar routine in your life (like buying a generic item instead of a name brand) or you repeat it often so that the savings add up (like using a bit less toothpaste when you brush your teeth). The “small” tips can be surprisingly big over time.
• Save your pennies and nickels, especially found ones: Those nickels add up over time to a lot of money. Whenever you see little opportunities to pick up and save a penny or a nickel, do it.
• Look for ways to shave just a cent or two off of things you do regularly: If you can save two cents a gallon by using a different gas station, that can add up to a lot of dollars over the course of the year. If you can start using a different grocery store that saves you a nickel per item on average, you’ll end up saving a ton over the course of the year. There is a lot of value in repeating a little tip over and over.

### Principle 12: Creatively Use and Respond to Change

• When something new arises, give serious thought to whether it can provide real value for you: Ask yourself whether this item would add substantial benefit to your life without requiring you to significantly shift your behavior . If you can’t make a strong case without any hesitation, then you shouldn’t buy the product right now.
• Have a wide and varied social network: The larger and more varied your social network, the wider the variety of ideas and perspectives that will reach your eyes and ears, and having such a social network is free.
• Don’t be afraid to tap that network when your situation changes – or when their situation does: When someone in your social network goes through a life change or needs a helping hand, offer your assistance without hesitation, especially if it doesn’t require major effort from you (but, often, even when it does). If you do this without the expectation of something in return, you’ll find a lot of helping hands reaching out for you when the time comes. Consider it a social emergency fund built out of paying it forward.
 "Chance favors the prepared mind." - Louis Pasteur