Did you know that American Airlines saved about forty thousand dollars just by removing olives from the first-class lunches? And Bank of America's financiers, by reducing the paper density of ATM checks by 20%, managed to save over 500 million dollars a year by doing so? These are some great examples of how saving on the little things allows you to accumulate capital.
Think about it: there was a lot of money lurking in such a small change. You'd be surprised, but the average person can also find thousands of dollars in their pocket—all this thanks to the secrets I will reveal in this video today. Welcome to the main channel on finance!
Subscribe right now if you want to find out all the financial secrets. When thinking about economizing and saving your money, you should clearly understand what you are doing it for. To do this, it's better to set goals.
Of course, giving up a cup of coffee or a cake won't save up for a house, but you can buy a smartphone or go on a weekend trip. So, the goal should be achievable. It will be even better if your initial goals are so simple that you have to save and set aside only a couple of weeks or a month to achieve them.
After all, such small victories will only encourage you to move on towards something bigger. So right now, share in the comments some easily achievable goals, and in a couple of weeks, if you succeed, like your comment. It will also be right to understand the reasons behind saving.
After all, some of us believe that the end does not always justify the means, and some are simply not ready to give up small expenses today and afford something big tomorrow. There are three main reasons why you should economize and save up. First, it's your safety cushion.
A great example would be the period from 2020 to 2021; the whole world literally froze while ultra-successful entrepreneurs clung to their savings. Look back on these events; there is a lesson to be learned: anything could happen, and it's good when you don't have to worry about finances. Second, remember: more money means more freedom of choice.
In this case, it is worth thinking about all areas of your life. After all, we are constantly choosing between working for yourself or for your boss, taking a vacation on the islands or out of town. In each of these aspects, our finances play a crucial role, so your freedom of choice will absolutely equal your savings.
And last but not least, saving is about the future. It's about securing your children's future as well as a prosperous retirement. Now that you have outlined goals and are armed with reasons to save up, the question is: where do I start?
Controlling your income and expenses, of course! Financial literacy should be your foundation for building a saving system. The first obstacle may be thoughts about the complexity of the process, but these days, it's a lot easier than it might seem.
You don't have to write anything down or keep any records; there are a lot of apps that can help you with this. You only need to enter data about your income, and the program will analyze your possible expenses. Also, start paying for small purchases with a bank card on which you previously set the spending limit for the day.
All this will take you a few minutes, and the result will not take long. Another thing is the fear of denying oneself anything. Some see saving for the future as limiting themselves in the present.
The American behavioral economist Benartzi, known for his research on retirement savings, has long tackled this problem. He invented and developed the "Save More Tomorrow" strategy. The bottom line is very simple: a step-by-step increase in savings every time you get a bonus or a raise means you save more.
Simply put, as your income increases, so does your savings percentage while your expenses, in turn, remain at the same level. So, you're not limiting yourself while gently increasing your savings. The only downside of this strategy, of course, is that your income may not increase, and you still want to save money.
In that case, it is worth resorting to a financial philosophy. Popular speaker and business coach Jim Rohn once said, "The philosophy of a rich man differs from that of a poor man in the following ways: the rich man invests his money and spends what's left; the poor man spends his money and invests what's left. " Don't keep all your finances in an envelope.
Properly invested money generates passive income. It is also worth understanding that passive income is not only a replenishment to your budget but also money that will work for you when you are no longer able to work. Having such an income is a great goal, but the question of investing money should always be well thought out.
It is equally important to turn the boring and emotionally difficult process of saving into something more enjoyable and simple. To make saving more fun, you need to set and mark financial milestones along the way. For example, if you're trying to save twenty-five thousand dollars in an emergency fund, you might consider breaking it down into five thousand dollar pieces.
Then you should have a glass of champagne or enjoy a nice dinner—reasonably, of course—rewarding yourself for achieving each piece. Depending on your goal, saving money can take a long time, so add some fun along the way by rewarding yourself each time you reach the milestones. Rewards aren't the only things that can make saving up fun, though.
Sometimes, all you need to do is trick your brain into doing the simple thing of global results. Pull the five-dollar trick. This method was revealed by Amy Spencer Thieman, who blogs about personal finance.
A friend shared a money-saving trick with her: every time she got five dollars, whether it was change from shopping or tips from her bartending job, she would put it in a container in her house, no matter what. She said if she got five dollars, it went in the container. At the end of the year, she had four thousand dollars.
Spencer Thieman says she started doing the same thing, and within three months, she had twelve hundred dollars. It's funny how when you do something as simple as putting away a certain dollar amount, there's a psychological trigger in your brain. You don't think; you just do it.
It's almost a game. She says the point is to pick out the small bills you get for change and, instead of spending them, put the bills in an envelope or piggy bank. No matter what the denomination is, I assure you that after six months, you will set aside a large sum of money.
If you don't have any fears and saving is something you enjoy, you can resort to more radical methods. Shelly Singletary, a financial advisor for the Washington Post, introduced the term "financial diet. " She developed it as a way to get rid of credit and learn how to budget.
Its essence is very simple: a person pays only for the essentials—food, medicine, utilities—while excluding all unnecessary expenses such as any paid entertainment, expensive and unnecessary products, going out, visits to beauty salons, new clothes and shoes, trips by car or cab, gifts for holidays, and any other purchases you can easily do without. Of course, the method is too radical, and not everyone will like it, but Michelle herself claims that the financial diet should last only 21 days. This period is enough to form the right financial habits.
Do not forget that you should approach financial issues wisely because radical methods can play a cruel joke on you. You need to squeeze to the best of your ability, and if there is nothing else to save, look at the problem from another angle. The question of your savings directly depends on your basic earnings and additional income.
It is everyone's choice whether to cut back on expenses or to rely on their income and the process of saving and accumulating. In any case, it is a great struggle with yourself, with your desires and whims. The main thing is to come to the idea that without a lack of self-discipline, you cannot achieve any kind of financial literacy.
You have to constantly step outside your comfort zone, learn to clearly form goals and desires, and not stop on the way to their realization. Control your income and expenses, try different methods and strategies, praise yourself for small victories, and avoid significant defeats. Good luck!
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