I enjoy saving money. As a reformed (ahem... reforming??) spender I get a little thrill when I get a good deal, cut down on a bill or end up spending less than I budgeted.
But I have had to caution myself and work to really save money. It's one thing to pay less than retail or cut back on your expenses. It's another thing entirely to ACTUALLY save that money. And by save, I mean move to your savings account for a rainy day or applying toward a goal or debt.
So I ask the question: Are you really saving money?
Last year I talked about how our family cut $10,000 a year from our budget. We did this by cutting back on a lot of little things. One reader asked if we were actually saving that money by transferring the difference to our savings account. The answer is yes.
In the beginning, we transferred that money to paying off debt. Once the debt was gone we began saving. Some months we do better than others. Some months we have more expenses than others. But we try.
See, you can clip every coupon, turn off every light, and cut back on every expense, but unless you are applying that savings to something, are you gaining traction?
Think of it like the debt snow ball. For those of you unfamiliar with this principle (made famous by financial guru Dave Ramsey). You line up your debts smallest to largest and then take every penny you can to pay off that debt. Once the smallest is gone you move to the next one and then the next one. With each debt you pay you have more money to pay off the next debt faster.
The same can be applied to savings. When you cut down on expenses, rather than spending that money at Bath and Body Works or Target (not knocking BBW, I love some fall scented candles!) why not put that money in your savings account? Or apply it toward a goal? Or pay off debt?
When do you actually save money?
I have been thinking about getting one, mine is a hand-me-down that's several decades old and it's just not my style. The operative word being, thinking. I hadn't actually budgeted for it, or planned to spend that money.
But when I was walking through a big box retailer I saw a seven-piece bedding set on sale 50% off. It was only $50. So I threw it in my cart and went on about my day. I mean, I just saved $50 on a new comforter! Or did I? Sure, eventually I would need a new one. And this one was pretty. But I didn't really need one right now. I could have budgeted for it, waited for an even better sale and gotten one I liked even better. (The one I bought is a little scratchy.)
It was an impulse purchase pure and simple.
What about you? Are you actually saving money?