This is a guest post from my friend Martin of Studenomics
We are all the same when it comes to saving money. Nobody is born with better skills than someone else. Nobody is a natural at personal finance. Sure, some folks are cheap by nature, while others want to indulge in everything. I get that. That’s not a valid excuse though.
We all have access to the same 24 hours in a day and the same tools at the end of the day. Why is it that some of us can save a ton of money, while others seem to blow it all? I’ve been writing about personal finance for about five years now. Naturally, most are surprised when they meet me because I don’t look like I can put together a sentence. I usually get asked about saving money as well.
Over the years, I’ve picked up on what makes one person decent at saving money, while the next person blows it all.
What are the secrets of smart savers?
They’re not cheap.
Saving money and being frugal isn’t about cheap. You don’t have to restrict yourself. You don’t have to stay in every single night while the world passes you by.
Some of the best savers I know, are not cheap at all. Many of them go out pretty often. They spend money where they have to and don’t stress about every single expense.
How’s this possible? They keep the big picture in mind when saving money. A cup of coffee with a friend is a great time and an excuse to load up on caffeine. There’s no need to stress about tiny purchases.
A crappy saver worries about the little things. An excellent saver will focus on the big picture.
They look at things differently.
A $20 book isn’t a ripoff if you get thousands of dollars worth of knowledge out of it. A smart saver will buy that book, sign up for that course, or make that investment. They know that it will benefit them in the future.
Someone that sucks at saving money will complain about the cost of a course or a book. A world-class saver will invest in that book or course, all while thinking of the future.
They know the difference between needs and wants.
You want that iPad. You don’t need it. There’s a huge difference between what you want and what you need. I learned the hard way one summer. I rented a mini bin and told myself that I needed to fill it up. It turned out that I was able to throw out most of my stuff because it was useless.
A top-notch saver never wastes money on the newest technology or random crap they don’t need. A low-level saver, will mess up and buy everything that they can.
For example, you can easily workout without a gym membership. Smart savers know this and don’t stress about spending a ton on of money on gym access.
It’s the weekend. So what?
A skillful saver won’t blow their fortune just because it’s the weekend.
I was at my old barbershop many years ago. The barber was a gentleman from the West Indies. He started laughing at me with his friend because he claimed that us North Americans were horrible with money.
“You guys get paid on Friday and spend everything on beer by Monday. Then you try to get a free haircut.”
I wasn’t sure what he was talking about because I had never asked for a free haircut. I’m guessing that he had a few negative experiences.
This is key when you’re in your 20s. It’s too tempting to want to blow all of your money when the weekend comes. As much as I love to go out, I don’t believe in spending all of my money in one night or on holidays. You can have a blast on a random Wednesday. You don’t need to go broke just to have fun.
Those are all the things that separate the smart savers from the ones that don’t do so well.
This is a guest post from Martin at Studenomics, where he tackles what to do after college and other important areas (saving money on booze). Image by Daquella manera / flickr.