Saving money has two tiers - the first is the structures you implement in your own life that allow you to save money consistently, without much conscious thought. Tier 2 is the day-to-day decisions about what you spend your money on, specifically. Part 1 of this short series focuses on Tier 1 - the self-created structures for saving money.
Having a cushion of some kind is always a good idea. The reasons why are pretty much endless - One of your monthly bills is double what you expected. You accidentally drop kicked your cellphone into a filing cabinet. Someone drops their laptop on your laptop, irreparably damaging the screen, and thus you need a new one. You are stuck in the Bangkok airport (and aren't interested in being a permanent Thai citizen) so you potentially need to buy an entirely new plane ticket. All of these things have happened to me... so they could happen to you!
With this in mind, here are my top money saving tricks. Though my situation is somewhat unique - in that I am an expat living in South Korea - all can be tweaked and tailored to fit your life no matter your location.
Things to consider when budgeting...
Rent - Internet - Cable - Utilities (water, gas, electric) - Food - Insurance - Loans - Fun - Savings - Random extraneous expenses (because there are ALWAYS unexpected costs)
2. Do it first. Take your savings out the minute you get paid. Do it first and make it a habit every month. Take it out first and you won't be tempted to fritter it away later. If you are worried about making ends meet at the very end of your paycheck, only take out half of your goal amount first thing. This does not mean go buck wild with what's left - continue to make a concerted effort to not spend that money throughout the month.
1. Make a budget. Unarguably, it's a bummer to fully consider all the money you (don't) have. However, it's still necessary. Grab paper, a pen, a margarita, and then sit down and write out your monthly expenses. Decide exactly how much you want to save out of each paycheck and write that down too. Unless you have awesome self-control and memory, saying, "I'll just spend wisely and see how it goes," just won't cut it. You won't be wise and all you'll see is zeroes :(
As an EPIK teacher I don't pay rent. Unlucky me, I went to college in the U.S. and now owe the federal government thousands of dollars, and my first born child. So, to the tune of $700+ a month, I make up for my lack of rent. Yay higher education!
3. Cash out. This is something that I started doing just recently, but it actually works very well. Part of budgeting is deciding how much you money you can spend on a weekly basis (in this category I include food, fun, and always add a little for extraneous expenses). Once you decide how much money you are allowed to spend on a weekly basis, take that money out of your checking out...
IN CASH! I withdraw every two weeks, in order to cut down on trips to the ATM and resulting ATM fees. Boo :( It's way too easy to overspend when you use your debit card - money spent on the debit card is insubstantial. On the other hand, seeing your pile of money physically diminish is a strong motivator to not only spend smartly, but also spend less overall.
Enjoy the beautiful view!