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Now that you know how you spend and how you earn, the time has come to learn how to save. Saving money takes work and commitment and it helps to always remind yourself why you are doing it.  You are doing this to build a life of financial freedom, independence, and fulfillment. This is not going to happen overnight.  Get-rich-quick schemes don't exist – unless you are considering a career in illegal drug or organ donor trafficking.  People become rich through hard, continuous, and relentless work. The results compound over time. When you decide not to buy that pair of $300 leather boots and invest that money, that small sacrifice will compound into riches over the years and will help you achieve a state of financial freedom.  


Goal 1: Budget for Savings


Once you have an idea of what you spend in a month, you can begin to organize your recorded expenses into a workable budget. Your budget should outline how your expenses measure up to your income—so you can plan your spending and limit overspending.  Be sure to factor in expenses that occur regularly but not every month, such as car maintenance. Here you need to calculate what you spend in a year and then divide that by 12. Be on the lookout for other expenses that you pay quarterly, semi-annually, or annually – like college tuition and insurance. If the expense is paid quarterly, divide by 3, divide by 6 if semi-annually and 12 if annually.


Goal 2: Include a Savings Category in Your Budget


If we held the Olympic Games for the world's greatest savers, who do you think we would find on the podium? Singapore takes gold, Suriname (the smallest country in South America) silver, and China the bronze. Honorable mentions go to the Philippines, South Korea, Switzerland, and Ireland. Singapore boasts a national savings rate of close to 50 percent thanks largely to the fact that residents pay almost no income tax.  Singapore is an outlier, so I would suggest you aim to save 10 to 15 percent of your income.


Goal 3: Find Ways to Cut your Spending


Do not let this make you feel like a loser but you may have to learn to say NO to your friends who want to go out partying every night. Identify non-essentials that you can spend less on, such as entertainment and dining out. Look for ways to save on your fixed monthly expenses like television and your cell phone, too. You can also downgrade on the brands that you consume – instead of Johnnie Walker Black, buy Red. You may also want to grow your hear and beard – imagine the savings in razor blades, shaving cream, and barbershop visits! Talking about barbers, here are some ideas for trimming everyday expenses:

1) Use resources such as community event listings to find free or low-cost events to reduce entertainment spending

2) Cancel subscriptions and memberships you don’t use—especially if they renew automatically.

3) Commit to eating out only once a month and trying places that fall into the “cheap eats” category.

4) Give yourself a “cooling off period”: When tempted by a nonessential purchase, wait a few days. You may be glad you passed—or ready to save up for it.


Goal 4: Do it for the Planet


Many of the products we buy are exceptionally damaging on the planet. If you are the kind of person that needs additional motivation to save and are concerned about the future of the planet, consider how many liters of water are required to produce 1kg of the following foods:

Chocolate: 17,196  

Beef: 15,415

Sheep meat: 10,412

Pork: 5,988

Butter: 5,553

Chicken meat: 4,325

Cheese: 3,178

Olives: 3,025

Rice: 2,497

Pasta: 1,849

Pizza: 1,239

Apple: 822

Banana: 790

Potatoes: 287

Tomato: 214

Egg: 196


This is what you can learn from this information:

Lesson 1: cut out red meat and each chicken – not only is red meat twice the price, but it uses substantially more water (a scarce and precious resource).

Lesson 2: reduce your chocolate intake – it is expensive, makes you fat, and at the same time skrews up the planet.

Lesson 3: consider adopting a vegetarian diet half the week – again veggies and pasta are cheaper than meat and pollute less.


Goal 5: Consider becoming a Minimalist


Minimalism is a movement that focuses on reducing the clutter in your life both in physical objects and in other distractions. People who embrace it find ways to eliminate the distractions from their lives and it opens up more opportunities for them in other ways and areas. Embracing minimalism does not mean that you stop spending money, but it can mean that you spend it on other things and your focus may change from making money to enjoying life. This may be a little extreme for some people, but if you have an addictive and extreme personality and are not a psychopath, this could be your new religion.


Goal 6: Set Savings Targets


One of the best ways to save money is to set a goal, and you need to make the goal attainable. Start by thinking of what you might want to save for— then figure out how much money you’ll need and how long it might take you to save it. Be sure to remember long-term goals—it’s important that planning for retirement doesn’t take a back seat to shorter-term needs. Goal 7: Do not Save to Spend, Save to Invest When I hear of people who save money to buy a Louis Vuitton bag, or a skiing vacation to the Swiss Alps, I am horrified. Luxury bags and vacations, in my opinion, are for people that can afford to pay for them cash from their monthly income (or their trust funds).  I believe the only reason why you save is to invest – or to pay off debt that is keeping your head below water (which makes it a form of negative investing). The objective of saving is to have resources to invest so that you can secure a life of financial freedom in the future.

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