This article discusses ways to save money by using sources of income that are not likely to reduce your standard of living.
Save a piece of each raise.
The sad truth is that most people have already spent their next raise before they receive it. If you are not one those unfortunate souls, a raise is a great time to consider adding to your savings amount. Since a raise is money that you did not previously have, you should be able to designate all or a portion of it toward your savings account. If your employer has direct deposit, have this money automatically withheld from your pay and dumped into your savings account.
Save any money that you did not earn.
Have all interest deposited into your savings account. Lots of checking accounts now pay interest. Move this into savings. If you are one of those people who has a credit card that builds cash back, move this amount into your savings account when you receive it. Deposit that amount when you spend it if you have to use the cash to reduce your card balance or spend it on merchandise. Cash gifts and other bonus money are good sources to tap for adding to the savings account.
Learn to save for a purpose.
Saving is easier when you have motivation. For some people, just saving is enough. For others, a tangible incentive is needed. If you want to build a savings account, you can reward yourself when you reach milestones. Pick out an item that you want. When you reach five or ten times the items value in your savings account, withdraw enough money to buy it. Find a new item and start again.
Save debt payments when a debt is retired.
By not adding to your outstanding debts, you will eventually start to retire some of them. With the elimination of the debt, the payment goes away. Each month, take the money that you had used to make the payment and make yourself a payment into the savings account. This works extremely well if you have just paid off your house or a car.
Bank the money you save by using a coupon.
Coupon use is popular. For those who use coupons, save the value of the coupon instead of spending it on other items. If you are an extreme coupon user, this may be one of the quickest routes to building a large savings.
Save the money from discounts and rebates.
Discounts and rebates are first cousins to coupons. If you have a reason to receive consistent discounts from vendors, learn to buy the item and bank the discount. When those rebate checks finally appear in your mailbox after weeks of waiting, they should be easy to save because you are never sure if you are even going to get them.
Learn that every penny saved is important.
No amount is too small to save. Very small amounts saved often enough for long enough can become very large amounts. Even a penny saved if you double the amount everyday for 30 days becomes $5,368,709.12 on the last day and a total of $10,737,418.23 for the 30 day period. This all happens without interest or compound interest. If you can save $100 per month for 10 years at 5% interest, it will become $15,528.23. Raise the rate to investment level at 10%. Your 10 year result is $20,484.50
Make saving a bigger priority than spending.
Because spending provides an instant reward, most people find spending to be more fun than saving. If you can learn that a delayed reward is usually bigger and better than an immediate reward, saving can become a priority in your life that is higher than spending.
You can see this effect in education. Those who delay starting their career until college is behind them tend to earn far more in their lifetime and have a better standard of living. Every high school student knows that getting a paycheck today seems more interesting than going to more school for a bigger paycheck tomorrow.