Get Started Saving $$$

Getting motivated to start saving money is sometimes harder then the actual saving itself. After all, it's hard to change lifelong personal habits (like not saving money). Getting that train rolling down the tracks in the first place may be the hardest part. But ask yourself: Can saving money be as hard as quitting smoking? Or as hard as going through a divorce - or even a serious illness?

Here is a practical examople used to teach economics students about discretionary spending - what you and I do each day. It puts saving money into a daily context that most people can relate to. We'll use an item almost everyone consumes everyday - coffee.
Call this the Latte Lesson.
These days, when there is a coffeehouse (most a namebrand I won't mention) on seemingly every other corner, many people think nothing of spending $2.50 every workday on an afternoon latte. OK, granted, so maybe $2.50 isn't that much money.
Well, it's not - when you spend it only once in a great while. But if you were to add $2.50 each day, that's $12.50 each work week.
Now, multiply that $12.50 by 4 weeks per month and we're up to at least $50 each month. That's $650 each year ($12.50 x 52 weeks/year).
Even if you made your own coffee at home and brought it to work in a thermos, you'd save around $500 a year. That's real money isn't it?

OK, so it's not easy to make yourself save - to get psyched, so to speak. At least at first.
But there's a second way to save money besides opening a bank account. And you can do this in your everyday life simply by adopting wise spending habits.

"It's not what you make, it's what you spend."
- J. Paul Getty
(Once the world's richest man and an advocate of thrift.)

***A brief note that Getty was a cheapskate who had a payphone in his mansion.***
It's not easy to save in our society; Everywhere you look, we're being urged to spend, not save, by slick and sophisticated advertising. How many times have you seen something in a commercial - maybe a fast food or one for a yummy-looking dessert - that just looked so good you had to have it? You probably wouldn't have bought it before seeing that ad.
Partly because of the constant call of our high-powered consumer culture, the U. S. has a dismal savings rate compared to other industialized countries - we save a -2% of our disposable income. (That's right -2%, a year or 2 ago it was only -1%, but we continue to spend more then we make and the overall average savings is -2%.)

Ask yourself What kind of spender am I? are you an overspender? Do you buy things regardless of need? Do you spend when life gets stressed? Do you buy things you can't afford? Do you spend when you're bored, depressed or lonely to cheer yourself up? Are credit card bills playing havoc with your finances? One big key is to cut back on spending, and also to spend money more wisely. Behavioral economists say that understanding the psycholigical forces that prevent us to overcome these common problems. Here are some solutions to common problems:
Problem: Money burns a whole in your pocket.
Simple solution: Don't carry as much cash. Sounds simple, and it is. It's an old trick, but it works. You can't spend what you don't have.
Also, leave the ATM card at home. We don't have to spend money constantly. While you are at it, cut up all your credit cards.
Another way to save and not spend everything in your checking account: Have a certain amount automatically deducted directly into a mutual fund (or savings account) each week or each month. In other words, "Pay yourself first."
Problem: You feel deprived, if you aren't spending money.
Simple solution: Try visualizing something concrete your savings will buy. That $50 you don't spend today can go a long way towards buying that new set of dishes or car.
Problem: You're a "shopaholic"
Simple solution: Compulsive shopping is like bing drinking. You feel awful the next day after either. Psycologists often say compulsive shopping comes from pent-up emotions, especially anger. So they suggest, try to think of the reasons why you're spending monry as you're doing it. Teach yourself to moniter and control your shopping habits, advise experts. Think about what you're doing each time you reach for your wallet. Put a small reminder card where you keep the cash in you're wallet that says: "Do I really want to buy this?" It's easy to do. Don't wait until buyer's remorse sets in; that's just beating yourself up. It's better to praise yourself for saving money, even if it's just $5.
Problem: You unexpectedly get a chunk of "windfall" money - and you inevitably spend it.
Simple solution: Treat all your money the same. It could be a tax refund, a bonus from work or an inheritance. Money experts say we tend to create different mental catagories for different kinds of money. Bad idea. Don't blow the money on something you wouldn't normally buy otherwise. Quickly stash any "found money" in your savings account for 2-3 weeks - "until the desire to spend it passes", advises Gary Belsky, author of Why Smart People Make Big Money Mistakes - And How To Correct Them. By that time, he says, the money will feel more like savings then a windfall, and you'll be less likely to spend it on a shopping spree.