A Quick Way To Have More Money Immediately

Image by spacebahr via Flickr

I came across this blog post, and I thought it was so powerful I decided to share the link rather than share the tip within in.

Kudos to the author. It's so simple but so true.

Read this short post: One Thing You Can Do Today That Will Put You In Better Financial Shape Tomorrow

Now maybe you can't go a whole day without spending, but trying giving up one item that you would normally buy regularly, if you can. It's a great way to start.

Everything you save and don't spend, you can earn interest on it. That's more money for you.

Everything you don't buy on credit, does not cost you interest on savings foregone and does not increase your costs by debt interest incurred. That's more money for you.

Getting Started - Earn and Save More Money Now

Cover via AmazonWhy reinvent the wheel? There are best selling books on Personal Finance. There are countless websites and blogs. Do a little reading and see what is applicable to your situation.

How did I start?

In the first few days of 2009, I read the best seller "Smart Women Finish Rich" by David Bach (don't worry - the information is generic enough for anyone, and he does have different versions). The book was already in my personal library, I just hadn't read it yet. Given the uncertainties we all face, I figured the time was now right. I would highly recommend the book to to help with thinking about saving vs investing (reminder: they are not the same), and also general money management. There is a lot of information specific to the USA, but the general principles are universal, I think.

Next step - application of principles.

For example, that book inspired me to read another personal finance book - but it was a best seller motivational book not a classic "how to" book. Now, I did not have that book in my library, so I went to buy it. But, here's something key, Bach's book had taught me the importance of discipline in spending (which I will get into in a later post), so although I picked up 10 books in the bookstore, I decided that I did not need them - although I wanted them - and decided to buy only the book I intended to buy when I went to the store. By exercising discipline in my consumption of my favorite impulse items, I saved significantly that day! I had saved money by not spending it and not losing savings interest on that money. What's your favorite impulse item or items? Does this story sound familiar - walk into a store for one thing and buy a ton of other things? Now, am I likely to purchase those books later? Sure. But for the time being I can earn interest on that saved money since I am unlikely to read 10 books at the same time :)

Despite the habitual convenience of using a credit card, I used cash to avoid interest charges. This tip came directly from the book, and in a later post I'll get into how to think about various forms of debt. But the main point is that dollar for dollar, interest rate charges will exceed after tax income on savings. So, as much as you save, your net will be negative if you pay high interest rate charges.

Lesson Learned:

• Learn from the experts and start applying the principles immediately. Make personal finance a lifestyle change
  

• Make a list of needs - not wants - before shopping. Take the list. Try to stick to it. With discipline and habit, foregone consumption can add up to real savings which earns interest.
  

• Make cash or fee-free ABM cards the preferred payment type. Debt reduction and avoidance reduces the amount of your hard earned savings lost to debt service.
  

Check back tomorrow for a summary of basic personal finance principles to get you started on your journey!

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