Dr. Penny Pincher founded the popular personal finance blog Penny Pincher Journal in 2013 and has published two books about saving money.
Go On a "Money Diet" to Save Money
Saving money is one of those things that sounds easy, but is not for most people. Saving money has a lot in common with trying to lose weight.
Like saving money, losing weight also sounds pretty easy in principle- just eat less and exercise more. But this is not a plan. You need a plan of action and ways to check your success to have a real plan. If you are serious about losing weight, you'll want to step on a scale and see how much you weigh now. You might look at BMI charts or pick a healthy weight from when you were healthier as a goal. You will want to work on a diet plan- how you will go about eating less. Some people like to cut out certain foods- donuts for example. Others focus on making and eating healthy food to replace less healthy food in their diet.
The other side of the equation for losing weight is exercise. You can lose weight without increasing exercise, but you can lose weight much more quickly and get healthier if you also add exercise to your plan. But what exercise? Unless you choose something fairly convenient and that you like to do, your amount of exercise will quickly fall off as the momentum from starting a new plan fades.
Easy Ways to Cut Spending to Save Money
Of course, the comparisons between losing weight and saving money are pretty obvious. Instead of eating less to lose weight, spend less to save money. Instead of exercising more to lose weight, make more money to boost your savings. The concept sounds simple, but how do you actually save money?
Let's start with the spending less part. Start by "stepping on the scale". Find out how much you are spending now and how much debt you have. Just like stepping on the scale when you start a diet, this can be painful and embarrassing. Not to worry- these numbers will be looking better soon.
Now for the diet part- cutting back on spending. Most people can cut hundreds or even thousands of dollars per month of spending with little impact at all on their lifestyle.
Savings that seem pretty small do add up over time. For example, I save about $2 per day by making my own coffee at home instead of buying it at a coffee shop. Over a year, this adds up to over $700!
I pack my own snacks and lunches instead of eating out, this saves over $1000 per year. I cut my satellite TV and save over $100 per month using free TV over the air, Netflix and Amazon Prime for under $20 per month instead.
These small savings add up- here is an article that describes things I do on a typical day that add up to over $17,000 per year of savings! The key is to find things you can stop spending money on- even if it takes some work- and then save the money or pay down debts.
How to Make Extra Money to Save Money
As you can see, you can save a lot of money by cutting expenses alone. Continuing our comparison with losing weight, you can boost your savings if you can find a way to make more money. This is like exercising and dieting at the same time.
It is hard to make lots extra income- the place to start is to try to make small amounts of extra money.
One of the easiest ways to get extra money is by selling items around your house that you don't need. The other day I found my old calculator from college in a box and decided to get rid of it. I checked on eBay to see how much they sell for and was happily surprised to learn that it could sell for nearly $300. This is not a lot of money, but it is not hard to find things to sell. Here is an article on how to sell things on eBay. I also sell things on craigslist and at consignment stops to pick up some extra money.
Another nice way to get a extra money is to develop a hobby that can earn money. Earning money can make a hobby more interesting. I have written a couple of books and publish a blog about saving money. A hobby that makes money can take time to get established, but the sooner you start, the sooner you can start making some money.
Depending on your job, you may be able to work a second job or make some extra money working odd jobs or delivering newspapers, etc. This can be a fast way to start bringing in some extra money to boost your savings if you can do so without disrupting your primary source of income.
Now, Here's How to Save Money!
The magic happens now that you have cut your spending and perhaps found ways to bring in some extra money. Work to keep the amount of money coming in as much higher than your expenses as possible. When you do this, math takes care of the rest. You will automatically save money each month when you keep your expenses lower than your income. Just stay on top of keeping your spending to a minimum and watch your savings grow.
There are many obstacles to saving money- this reminds me a lot of people who go on a diet for a few weeks, loose 10 pounds, and then go back up to their normal weight. As you start cutting expenses, try to pick things that you can realistically go without.
For example, I could save $60 per month if I cut high speed Internet. But everyone in my family would miss it and we would end up turning it back on after much pain and suffering. There are all kinds of things you can spend less money on, and you might even be happier. I started cutting my own hair at home with some cheap buzzers. I like the convenience of being able to get a haircut in a few minutes without leaving home whenever I want- and of course I like saving about $15 per haircut.
How To Keep On Saving Money
People who are successful at losing weight over the long run often change their thinking about food. They make a deliberate decision to eat healthier food and eat only enough to maintain a healthy weight.
It will help your efforts to cut spending if you can change your thinking about the things you buy. For example, after a few months of cutting expenses and watching your saving grow, you may decide that you don't really want a new car even if you can afford one. The old car works fine and doesn't cost much. You might find that you enjoy preparing healthy food at home more than eating out, even if you can afford it.
© 2015 Dr Penny Pincher
Dr Penny Pincher (author) from Iowa, USA on July 04, 2017:
New clothes become "used clothes" after the first time you wear them anyway! Might as well save the money if you can... Thanks for reading!
Kara Skinner from Maine on July 03, 2017:
This is a really good article. I definitely see how your attitude can change over time when you stick to a budget. For the past several years I've been trying to buy more things used than new to save money and I don't think I will buy new clothes unless I absolutely have to even after I pay off my student loans.
Dr Penny Pincher (author) from Iowa, USA on January 16, 2015:
MarloByDesign, I assumed that an old technology item such as a calculator would be almost worthless, but I am happy to be wrong in this case! I am sure glad I checked the value on eBay and realized that it was worth something...
MarloByDesign from United States on January 16, 2015:
Rated 'Useful'. Great Hub. I was excited to read you sold your calculator for $300! You have motivated me to sell things I really don't use anymore. Excellent tips.