HOW TO START SAVING?

According to CNBC.com, 78% of the U.S population is living from paycheck to paycheck. So if you are asking yourself how to save money, I want to congratulate you because you are taking your first step into financial independence.

Consider this fact: “People who earn $100k per year say they’re living paycheck-to-paycheck, and 59 percent of people making that kind of money admitted to carrying debt. Of those 59 percent, 56 percent say they’re heavily in debt”, said NBC report, 2017.

This issue is a lot common than you would think.

Today, I would like to talk about how I save money. The first step into saving is to take control of your spending. Here is the universal equation:

Income – Spending = Savings

Spending

It would be best to figure out precisely in details where does your money go. Take a look at the table I made for myself:

Keep in mind the dollar amounts are just examples. I call this table “Dead Money” because no matter how much I make, I still have to spend $160 a month. As you can see, it does not include foods, groceries, gas for your car but it does roughly give you an estimation.

Related: 10 WAYS TO SPEND MONEY WISELY

Depend on how detail you want to be with spending, but I sometimes take note on my phone about every transaction I make throughout the day.

After I figure out what goes into my spending, the next step is to ask yourself if there is any other way you can save more money.

In my situation for example, as you can see from the table, I paid for both World Gym, and Crossfit gym. I would ask myself if it is worth it to keep membership for two gyms. I concluded that I need both because I have a great passion for CrossFit and I use World Gym for strength and weight training. It entirely depends on how much you can afford and if it is going to affect your happiness or quality of life.

Thanks for reading and please let me know in the comment below if this method helps you to start saving. It’s never too late. START NOW.