Home > Your Personal Side > Your Finances: How to Save Money Even If You're Hardly Making Any

By Jennifer Rohloff

I remember way back when… when I had just graduated college and landed my first real salaried job, my boyfriend at the time (now my husband) almost instantly got on my case about saving money. I nearly burst out laughing. Yes it was a salary, but after commuting costs, a new professional wardrobe and the student loans that would be coming due, it wouldn’t be much more than what I was making slinging pizzas.

I couldn’t see how I would be able to do much saving, but my man assured me I could. I hate to admit it but he was right. At the time he handed me this little book titled “The Richest Man In Babylon” and told me to read it and see if I learn anything. I looked at him strangely, but it was a small book so I figured I would humor him. The book is filled with short fable-like stories that all have the same lesson — PAY YOURSELF FIRST!

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The premise is really that simple. Take 10% of your salary and pay it to yourself. That’s it. No matter what else goes on in your life pay yourself that 10% first. Now you may think it’s crazy but if you stick to the principle… it works. In fact, a recent study suggests that how much you save has little to do with how much money you make.

The Class System Goes Kaput
When most Americans hear the word “Savings” their stomach turns and they get a worried look on their face that’s hard to hide. That’s because according to a recent study of saving behavior by economists Steven Venti of Dartmouth and David Wise of Harvard, more than 75% of respondents said they knew that their savings, specifically for retirement, were insufficient.

That’s a little hard to believe, but it’s nothing compared to the fact that how much you save has very little to do with how rich you are. Venti and Wise divided the 7,700 households they studied into 10 income groups. The top 10% of the lowest income group nonetheless had saved more than $150,000 per household. Meanwhile, middle-income folks, on average, had only $45,000 in assets.

This means you have no more excuses for not saving. It comes down to the basic idea — as long as you are receiving a paycheck you have to pay yourself first.

But I Haaaaaaave to Have It — First Stop The Whining
You have to stop saying you can’t do it and actually do it. Take that 10%, put it away and you will survive without it. If you have to, set up a separate savings account especially for this purpose. Every paycheck you must make a deposit into that account. If your employer can set up a direct deposit system where part of your salary goes to one account and the rest to another, even better. You’ll barely feel the difference this way.

As much as people don’t want to hear this…saving money is a state of mind. You have to stop believing that you actually need all the extra stuff you spend your money on — you don’t have to eat lunch out every workday, start brown bagging it baby! Do you really need another pair of black strappy sandals??? Is a $200 cocktail dress really justified spending? Here are some other ideas to help you save, on top of the 10% you’ll start putting away — Pronto, right?

When I Was Your Age…
Do yourself a favor and sit down with a Depression-era relative or friend of the family. Don’t roll your eyes. This can be more beneficial than you ever imagined. Ask them about economizing because if anyone knows how to make things work on a budget it’s them. They’ll tell you how they made a jar of peanut butter last month, how they got four meals out of two meals of chop-meat and how they would fix a shower curtain instead of buying a brand new one.

Change is Good
From now on take any lose change you have at the end of the day and put it in a bottle or a can and don’t touch it. If you feel really aggressive you can do the same thing with single dollar bills. And if you’re super determined to save try this, every time you get a five-dollar bill put it away. Before you know it you’ll have a nice little nest egg going.

Don’t Buy What You Don’t Need
Start by tossing all of the catalogs you get in the mail as soon as you get them. Then re-evaluate what you spend your money on — the dinner out might end up costing the same as a weeks worth of groceries. Invite friends over for cocktails instead of meeting at bar and ask everyone to bring something. Avoid designer labels; you’ll probably get two or three outfits for the cost of one.

Find Inspiration
You don’t have to do this on your own. There are lots of websites and magazines that can help you out. Pick up a copy of Budget Living from your local magazine store. Or, using phases such as, “cheap living” or “frugal living” do a web search and see what kind of websites come up.

The list of suggestions could keep going but I think you get the idea. Be creative when you’re looking for ways to save, it’ll make the whole process much more fun. And try to pick yourself up a copy of “The Richest Man In Babylon”. If you learn nothing from the book (which is practically impossible) it is still very entertaining reading. Soon it’ll be time to take all the advice you have learned and put it to good use…happy saving!