I started with nothing. I grew up working hard for my money and using tactics to save every penny. As a teenager and young adult, I didn't go out to Coachella or concerts or food festivals or most big events that cost money. I became frugal and a minimalist. Looking back, I was too much of a minimalist and skimped on a lot of things, but I learned a lot from it. Now, I am a comfortable minimalist that buys occasional luxuries and many vacations. If I find myself spending too much or decide I want to buy something big, I follow these steps to decrease my spending and increase my savings.
I know where you are because I was there too: You have enough in the bank account to cover bills. A savings account . . . what is that? A 401K or roth IRA - let's not even get started. For now, I'm going to give you a few easy tips I've used to move my money from spending to saving.
Put Down that Latte
I have an addiction to Starbucks. I'm tired in the morning, and it's easy to just hit the drive thru and grab a latte on my way to work. This is a ritual in so many people's lives. Let's do the math:
One latte is $4 (at best). If you buy a latte once a week, that is $208 a year. If you work a part-time minimum wage job in California making $12/hr working 20 hours a week, then your salary is $12,480. You have to work three weeks full time to pay for those lattes*.
Now let's be realistic. If you buy a latte three times a week, you have to work 10 weeks full-time to pay for those lattes*. If you buy a latte every day of your life, you have to work 17 weeks full-time, which is 10% of your paycheck.
I'm not saying to not buy that latte, because I'm guilty AF. That drank is delicious. I am saying to be conscious and think about this when you're saving money for a trip or other goals in your life. Do I need to spend that $4, or should I put it into my savings account or trip jar?
Conversely, if you put that money away every time you thought of having a latte, you could have 10% of your paycheck* saved up for a luxurious trip to the Bahamas. So what is it going to be, a momentary pleasure of a vanilla latte or a lifetime memory at the Bahamas?
A Good Homemade Meal
I am also guilty of going out to eat. A LOT. My boyfriend is a vegetarian so I take advantage when I'm invited to all you can eat sushi and korean bbq. It's how I socialize! The downside is that going out to eat is addicting. Once I go out once, I want to go out all the time. There are so many different food types and restaurants that I want to try!
When I know that I have to minimize my spending, going out to eat is one of the easiest things to do. I eat out so much that when I stop, I save a ton of money. The way to counter this is to buy groceries and cook at home. My boyfriend and I spend about $100 in total buying weekly groceries, whereas I can spend $30 alone eating at a delicious Thai restaurant.
Make a grocery list at home. Plan out what you're going to eat for the week. Plan out every meal that you'll eat every day. Focus on using the same ingredients multiple times so produce does not go bad. This tactic minimizes standing in front of the fridge trying to come up with a meal, which typically concludes in ordering food or going out to eat.
Move Money from Your Checkings to Your Savings
To me, my savings are my forbidden fruit. Once money is put into my savings account, I am not allowed to spend it unless it's for a big, planned event, item, or an emergency. After budgeting and working out my finances when my paycheck comes in (I'll share my methods later in the How to Budget series), I put a portion of money into my savings account. There are a few ways you can do this:
1) Automatic Deposit: Your bank account allows you to automatically transfer money from your checking account to your savings account. You can set how much you want to transfer and which day each month works best for you. Look on your banking website or discuss with your bank about this option.
2) Manual Deposit: This is what I do because I have variable expenses and income. When my paycheck comes in, I work on my budget and see what I have leftover. I'll leave some in my checking account and put a portion into my savings account. You can do a one-time deposit from your checking to savings account - this way, you aren't stuck contributing the same amount of money each month if you're worried about overdrawing money (i.e. taking out more money than is in your bank account). Overdrawing may lead to a bank fee.
How much you transfer to your savings depends on you, your income, and your bills. Be reasonable. If you can only transfer $5 each month, then that's five more dollars in your savings account than last month. Growth takes time.
Stop Unnecessary Spending
Start to Marie Kondo your life. Every time you consider buying something, ask yourself if you really, truly need that. Anything you buy now is money you're depriving yourself of during vacation. For example, if you're standing at the sale rack at Forever 21 and see a cute $20 bathing suit, ask yourself if you'd rather have this bathing suit now or a $20 sushi dinner in Japan later. If a new $60 video game comes out, ask if you'd rather spend the $60 now or for a boat ride to the sunsets in Greece.
This is the mindset that I have and why I am a minimalist now. The less things that I buy, particularly unnecessary items that are just luxury expenses, the more money that I have saved up.
So next time you want to buy something, hold it in your hands and ask yourself if the item is a "luxury" or "necessity." Buy the necessities, stop buying the luxuries, and start saving money. Boom - Marie Kondo that shit.
Budget Social Events
Hanging out with my friends is one of my favorite things. After a long day or week, it's nice to chat with friends to decompress, catch up, and keep my mind off work. If you're like me, you like to see friends multiple times a week to hang out.
The danger comes when you go out with friends constantly. For example, hanging out over dinner and drinks with friends can become expensive. You probably aren't buying one drinks. You're likely buying multiple $12 cocktails. Hanging out with friends turns into spending a ton of money.
Try budget-friendly events:
-Buy a bottle of champagne and invite friends over for brunch.
-Host a potluck and buy only one dish since everyone else is bringing a dish.
-Invite everyone to lounge at the pool, park, or yard.
-Host a BBQ and people will be obliged to bring drinks.
-Set up your favorite video game console (everyone loves when you plug in that old Mario Kart on N64).
-Have a smoke sesh on the balcony (if it's legal in your state or country).
-Host a board game night.
-Chill on the couch and watch a Netflix stand-up comedy special.
-Order a pizza and split it with friends (Note: Pizza is susceptible to kitty consumption).
Saving money seems hard initially, but small changes each day will accumulate over time. Maybe you save $4 when you don't buy that latte at the beginning of the month. By the end of the month, you saved so much money by making coffee at home, buying groceries, inviting friends to your house, and moving all of that non-spent money into your savings account. Every time you don't spend money, you are saving money. Start investing in your future, goals, and dreams.
*This math assumes a 5 day work week.
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