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Location: East of Seattle since 1992, 615' Elevation, Zone 8b - originally from SF Bay Area
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It's pretty easy when you have it done automatically. In my case, pay is direct deposit, and I can have it go to as many as 5 banks/credit unions, in addition to the company sponsored 401K and Health Savings account. Currently, I have some of my pay go to savings in two credit unions, and the remainder into checking for paying the bills. Anything additional, such as "side jobs" or tax refund goes to the savings account that we use for vacations, the other is more of an emergency fund for unexpected expenses. When I get a raise, I adjust the amount into savings to increase it and keep the net pay the same.
I let my employer sponsored retirement plan do most of it and an investment company do the rest. I also have a special envelope where I put unexpected windfalls like small lottery winnings.
Do you mean you don't know how to spend less than you earn, or do you mean you don't know how to stash the money away once you have done this?
There are two ways to get to the point of spending less than you earn - either spend less, or earn more (or both).
Once you have money not needed to cover bills every month, then you can put it into a savings or investment account. Once you know how much you have each month (using a written budget), you can make the transfer automatic. This way you won't be tempted to find something to spend the money on simply because you see your higher checking account balance!
If you are undisciplined you may need to "force" yourself to save by setting up the transfer first, and using it as a way of "forcing yourself" to cut your spending.
I am so curious to know how you'll save money? It is always a day dream to me...
The way I've always done it is to never buy on credit and make sure my expenses are well below my income. That includes potential emergencies. It isn't that mysterious. I've had high income and low income, and no problem adjusting my living standard to match.
It would be good to know more about you and why you *can't* do it. From what I've seen with other people, it seems to usually revolve around money/consumption addiction. They source "joy" by purchasing things, and like most addictions the limitation needs to be enforced externally... by running out of money. Some people have this addiction and can still manage their finances ok, but I think it is much better to be rid of it.
It's really a spiritual/psychological issue more than anything, IMO.
I purposefully live like i make less money so that there is always a buffer of $ at the end of each month that i throw into savings.
Look at your monthly budget. List everything out, even the small things. Then see if you can get better deals for each specific one (for example: Cell phone: Instead of ATT, go with boost mobile. Food: Instead of brand names, go with the store brand)
Many years ago, i had to change my thinking when shopping. it went from "I want this" to "Do i really, truly need this?". The answer was almost always no, and i would walk away without making impulse buys. After awhile, it became the norm and i didn't even have to think about it.
Hubby has 401k contributions come directly out of his paycheck, so that is easy. We have our two Roth IRAs set up to automatically debit our checking accounts each month, so that is easy too. I've started buying laddered CDs with our emergency funds, which I don't have automated yet, as I just have done 1 so far.
As for the how do you have extra money, that was easy for us too. We didn't have kids. Two full time incomes plus no kids plus a low cost of living city plus being naturally frugal and liking a small house with a small yard makes it really easy to live beneath your means.
We set up monthly automatic transfers to mutual funds so that we never really miss it.
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