Most people spend a lot of time worrying about how much money that they make and less time worrying about how much money they spend… and a penny saved is not the same thing as a penny earned. Pennies earned are taxed, pennies saved are not. In fact, if you live in Michigan and you are in the 25% tax bracket, saving $1,000 is the same as making an additional $1,585 in salary/wage income.
So how do you save more money? Here are a few tips that have worked for me.
- Make a realistic budget to prioritize your spending. Monitor your progress against your budget to make sure you are on track. Modify your budget as necessary. See How to make a Personal Budget… and stick to it.
- Before you go to the grocery store, make a list and stick to it. And plan your meals around your grocery store’s weekly specials.
- Use cash or debit cards, not credit cards. Often a credit card can seem like a “bottomless pit” of money and will not let you know when you have overspent.
- Stay in instead of going out… invite friends and family over for game night or to watch a movie.
- Ditch the cable television and go with Netflix or Amazon Prime.
- Clean out your closets and donate old, unused items to charity to receive a fair market value tax deduction.
- Instead of buying books, go to the library.
- Wait 30 days before making any major purchase to help you decide if it is really worth it.
Saving money will increase your savings, reduce your stress level, and give you the feeling of accomplishment. If you need help preparing a realistic plan to save money, contact my office at 734-377-3641 for a free consultation.