How to Build Wealth by Saving
I was reading a book by Dave Ramsey not long ago, and one thing he said really struck me: "disciplined saving will outpace any investment scheme". Saving money can be very difficult for some people. My philosophy when it comes to saving money is to put our efforts in to not buying the big things rather than worrying about petty purchases.
Here's what I mean. Do you enjoy going to coffee shops and and buying cappuccinos? Maybe your a big music fan and love going to concerts. Or maybe you are into the bar scene. By all means, don't try and cut out doing something you love to do in an effort to increase your bank account. It is spending money on large purchases in which we should try and scale back.
Let me give you an example. Say you want to go on vacation. You could spend a lot of money flying somewhere exotic or going to a big city. Instead, why not go somewhere local to save money? I live in Georgia and I know there are lots of cool things nearby I haven't done. One thing you could do is stay in a cabin in North Georgia and visit wineries. Or there's actually a canyon in south Georgia you could visit. You could also go ziplining at the largest facility in the country, explore Ruby Falls in Chattanooga, or go hiking on the Appalachian trail. Or even drive a little to a cool local city like Nashville, Charleston, or Asheville. Find a groupon to save money, and use airbnb.com to find a place to stay. If you do decide to fly somewhere, begin racking up credit card points to fly for free. Check out thepointsguy.com for advice on earning points. Always take advantage of opportunities to save and cut costs.
Here's another example. Say you need a new bookshelf for your house. This is something you have to spend money on. You don't want to leave your books scattered all over the floor. But you also don't have to go to Ikea to spend $500 on a bookshelf. Instead, try Craigslist. You could use the negotiating secrets from this article to help you in your purchasing:
http://www.productivity501.com/craigslist-negotiating-secrets/8246/
You could potentially get a much higher quality item for the same price as something in the stores. Buying items for quality ends up saving money in the long run in some instances. When negotiating, the key is to not get attached to one particular items you are looking to purchase. Always be willing to walk away, and you could find yourself saving hundreds of dollars.
Along with staying detached, you should also be patient. "Good things happen to those who wait" is one of my favorite mottos. The longer you wait, the more likely you are to find a good deal. Or maybe you will find out that you really don't need what you were planning on buying in the first place. This is yet another way to save.
I think it is always better to spend money on experiences rather than material things. You will regret much more the things you didn't do than the things you did. Otherwise said, you will be much happier by investing in memories that last than things that you will eventually throw away.
What philosophies do you live by in regards to saving money? Or maybe you haven't given it much thought in the past. Here's a good one to end on: "A Penny Saved is a Penny Earned" - Benjamin Franklin.
