How To Save Money (The Simplest Way)

13 Comments Posted in Personal Development

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Saving Money

Our school education does not teach us much about handling money in life and this has caused most of us to enter the working society without much knowledge on how to handle our own money. I noticed that there are people who are working for 20 to 30 years in the society yet they do not have any savings at all. If they were to get retrenched, they couldn’t survive even up to a month and that is something that we definitely want to avoid.

My Story

When I was younger (around 13 – 18 years old), I am always spending more money than I earned. This means that my bank account is always near the zero mark. Any allowance from my parents or paychecks from my part time work just ended up with me spending it on food, clothes and entertainments.

Somehow it seems like the older I get, the more I spend. When I was 13 to 16, I spent much of my money on the internet gaming cafes playing online games with my friends and when I was around 17 to 18, my expenses rose and I found that I was spending more than what I could afford.

I started to play pools, singing karaoke, eat at restaurants, frequent the clubs and chasing girls. All these are costly activities and my allowance from my parents was not adequate to sustain my spending. I picked up a part time job to help me sustain my spending and also hoped that maybe I would have some excess money so that I can save a little. However as my income rose, my expenses went in the same direction.

As I had started to read personal development books during that time, I became frustrated about my lack of savings. I began thinking of what will be the best way to increase my savings and I came up with the idea of opening a new bank account.

I thought that if I am spending from the same account where I am saving money, I will be tempted to spend all of what is available in it. However if I were to have one account for savings and another account for expenses, then the amount of money in my savings account will definitely be increasing as I will not be spending any money from it. It was like an “Aha!” moment to me and I went off to create my new bank account.

I thought that if I have only a single bank account and all my savings are in it while I am also spending from the same account, I am going to be tempted to spend all the available money in that account.

I started to deposit money into my savings account monthly and never spend a single cent from it. After a few months, I finally had some savings and up till now it is always increasing as I save regularly and never spend from it.

Lesson

Having a new bank account meant for savings only is a way that has work well for me. If you do not have much savings and you want to know what is the simplest way to do it, follow this formula.

  1. Create a new bank account  meant for savings only.
  2. Deposit a minimum of 10% of your income into your savings account monthly.
  3. Do not draw any money out of your savings account.

I have done it and saw my savings increased from nothing to something and I believe you can do it too.

Vincent
Personal Development Blogger

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13 Responses to “How To Save Money (The Simplest Way)”

  1. derick msuya says:

    hey vicent for real ur blog has completely chaning my life thanx a lot brother and our almight GOD be with you!

  2. wangyonyin says:

    it sounds like a good idea

  3. Vincent says:

    @Hi Mark,

    I have tried the link that you have provided but it doesn’t seems to work. I will drop by your blog again to check it out.

    @Hi Bud,

    Totally agree with you. 🙂

    @Hi Tom,

    The worst thing is we can’t do anything about it. Even though we can try to lend them books or any other resources on personal development, they are not ready to learn and they will continue to float through life until when life throw them a sledgehammer to wake them up.

    Cheers
    Vincent
    Personal Development Blogger

  4. Tom Maurer says:

    It does upset me that so many people don’t find out about really important life skills like money management because either their school or their parents don’t teach them.

    People who are interested in personal development have the motivation and ability to access resources that will help them with things like personal finances.

    It just sucks for those who never stumble across these great resources because they aren’t looking for them. They are just floating through life.

    Great post Vincent

  5. Bud Hennekes says:

    Our education system needs a TOTAL reform.

  6. Hi Vincent,

    It’s great that you’ve learnt your lesson and started to ‘pay yourself first’. I’d like to add that it’s not enough to have only 2 accounts.

    Personally, I have 7 bank accounts to manage my finances. Yeah, that may sound a bit crazy, but I guarantee you that its worth the effort.

    You can check out how my system works in one of my articles. It clearly explains what each account is meant for and some personal finance advices that go with it.

    A Practical System To Managing Your Money.

    It’s a pretty long and detailed article, about 2000 words. Do take a while to read through it. It’ll be worth your time. 🙂

    Cheers~

    Mark

  7. Vincent says:

    @Hi Jake,

    That is a great idea! Setting it on autopilot will ensure that we will always pay ourselves first. I am currently doing it manually and switching it to autopilot can definitely save me some hassle.

    @Hi Bonnie,

    Forgetting our credit card bills is a mistake that can cause us to pay out hefty interest to the banks. Setting our payments for our credit card bills on auto pilot is definitely a great way to avoid paying the extra interest. 🙂

    @Hi Keith,

    It is great to see you enjoying the articles here. Do check back often. 🙂

    Talk to you soon,
    Vincent
    Personal Development Blogger

  8. Keith says:

    Creating a savings account and putting 10% of your income in it is a great idea, and so is having another account altogether for daily living expenses. Good advice Vincent! I like the practical information you supply here!

  9. Hi Vincent,

    I must say well done for fixing your finances and turning your problems around 🙂 I was not so good with money either in my younger days (19-21) but soon found that just writing down my expenses helped (kind of like dieting, if you keep a log of what you eat, you can see where your weaknesses are ;)). Nowadays I also utilise automatic payments for some bills and credit card which means I don’t forget about them 🙂

  10. Vincent,

    It’s very important to “pay yourself” first. I think the easiest way to do this is to create an automatic bank transfer of a portion of each paycheck to a specific savings account as you suggested. Over time, you won’t even miss the money that is being saved and you will adjust your standard of living accordingly.