Thursday, August 1, 2013

How to Learn to Save Money - Understanding How to Budget


Most of the really rich people in the world were not high achievers at school. A lot of them didn't even go to school as such. They got stuck into the real world and did things their own way. So you can with money. You want to know how to learn to save money? Think outside the box.

Start with the small things. Learn how to make savings in everyday life. This will involve cutting back on some of the things you think are important. However most of them aren't. In the case of food most of the generics are as good as the branded products.

It is all psychological. In tests it has been found that a 10 cent generic pain killer is not as effective as a branded one in a colorful packet with a logo. But when the same people were tested using the same pills but not knowing which was the cheap one they both worked equally well.
When you start to realize that a lot of what you use in life is not needed you will be able to make huge savings across the board. Loads of the stuff you buy you will be able to get a cheaper version somewhere. The extra money you pay for the branded stuff is going to the research and development of the packet, the advertising, the marketing and to pay the fat salaries of the board members.

In the past I asked how to learn to save money. I didn't get very good answers. Most people said I should work harder. That will solve some of the problem for a very short time, but generally people will just spend more.

Others said I should put a certain amount away every month without fail and not touch it no matter what. Now this is a much better idea in principle but I got into a lot of trouble half way through the month and would be chipping into my savings. This type of behavior is counter productive as it says it is all right to cheat.

I can te ll you that planning is where the real progress is made. Knowing how much you are going to spend upfront is everything. This way you can put money away and then never have to touch it and you can watch that money grow and grow. No more one step forward then two steps back.





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