How to Save 30% More in 2015


2014 was a strong year for the economy and for consumers and retailers nationwide. The real estate and stock markets also showed very promising signs of growth mid-year and continue to move in the right direction heading into 2015. Despite the growth in the economy, it still seems that many people still can’t seem to grasp the concept of their money and what to actually do with it; outside of spending it of course. Here are some tips on how to do a better job with saving your money in 2015 so that you can be one step closer to financial freedom.

The best way to save money in life isn’t by looking at the year to come or the months ahead, but rather looking back at your past spending and saving patterns. The idea is that by looking backwards and understanding your habits, you are able to change them moving forward, and monitor them to ensure history doesn’t repeat itself. Here are some tips to look for when looking backwards and what to actually look for.

Identify your excessive spending: Look back at the past year’s credit card and check card purchases and use a highlighter system to identify: yellow for ok, blue for maybe, and red for excessive. Highlight all your transactions and look for specific ones that were wasteful. When looking back at your statements, it is typical that you’ll notice plenty of red your first year doing so. The goal is to take the red amounts and add them to your savings rather than spending it. Most people discover upwards of 40% in wasteful spending and while you can’t cut it all out, most of the red coupled with a few yellow ones could save you 30% more on your yearly budget.

Realize that money lives in the net, not in the gross: One of the mistakes many people make on their quest for financial freedom is their continuous need to make more money, rather than fine tuning the balance between their gross and net earnings. When I worked a job that paid me well, I focused on making money but I always focused on closing the gap and figuring out ways to take more net home. From enhancing my tax benefits to figuring out how to make my hobbies into business, I always looked for that extra savings or way to turn a liability into an asset. Live in the real net numbers, not in the gross. Making $40K a year is not much, but making $35K net is like making $55K a year.

Make sustainable changes, not empty promises to yourself: If you tell yourself you will completely change your behavior and stop eating at 5 star restaurants and eat roman noodles instead, it is very unlikely that you actually upkeep that behavior more than 10 days. Make reasonable changes like decreasing how much wasteful spending than saying you will never waste money again. Every change is progressive and it is very rare that you will entirely turn the bad around in a week or so. Instead focus on making small changes that over time will add up to big savings.

Always plastic, never cash: While most people enjoy knowing they can pay cash for most things, it doesn’t mean they should. I recommend focusing on paying everything with a separate credit card that you pay off each and every month. Doing so enables you to take control by having a trail of purchases with no need for receipts. There is also the idea of earning points perhaps you can leverage for rewards instead of losing some of that money you work hard to save.