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I think for me, it's putting everything on auto-pilot. Become a Complete Fool
That was the big one for me! I started with payroll deduction feeding a savings account about 22 years ago. Other than changing it from my credit union's savings account to their money market account, the payroll direct deposit has continued until my employer changed payroll systems and would no longer split up direct deposits, but my credit union then automatically started splitting up the payroll direct deposit at their end. So, since a specified amount of money never touched my checking account I didn't spend it. Likewise, I make use of payroll deduction to feed my 403(b) account, and automatic direct debit to feed taxable investments. (Roth IRA? That comes out of the money market account every January.)
However, the above wouldn't be the only thing that worked. I also had to:
1. Develop a mindset that just because money is in my checking account, it isn't necessarily mine to spend--some of that money has to be earmarked for various bills, groceries, etc., that will occur before the next paycheck. That has kept me from being habitually short each month.
2. Never take on debt without a plan for paying it back. And if that means using part of next month's paycheck to pay back the debt, it means that next month will be tight, too. The longest I had ran a credit card balance was three months. But since 1990 I haven't carried a balance of consumer debt nor paid a cent of interest on consumer debt. Then when I purchased my condo in 1999, I did very seriously consider my cash flow, including income tax impacts, before deciding to buy. (See also #7, which is now my strategy instead of carrying a balance.)
3. Develop a mindset that savings and investments will not be touched except after careful consideration. For example, if I need to touch my money market account for anything other than the annual property tax payment or annual Roth IRA contribution, I take a serious look at my bank accounts to see if I had been living too high on the hog.
4. At each step increase (I have been topped out for a number of years) and each cost of living increase, consider if I can increase the savings amount--generally, if I do fine with my June paycheck, I should be able to live off of about the same amount in July, so often I have increased the savings amount starting with the July paychecks.
5. See what triggers my spending, and take steps to minimize the damage that causes. For example, shortly before I started payroll deduction in early 1981, I took a small notebook and pen and recorded my cash purchases, and realized that I was spending way too much in the vending machines, a problem I fixed by cutting way back on the cash I carry. I also found that I have to be cautious around some stores (particularly office supply stores).
6. Keep an eye out for ways I can save cash without seriously impacting my quality of life. Also, keep an eye out for what is important to me and what isn't, and decide accordingly.
7. Practice "Deferred Gratification." Don't jump at big expenses, but rather take time to save up for them where feasible. (By saving up, I build in a "cooling down" period where the initial excitement can be replaced by reason, and often the "must have" item becomes a "so what?" item, saving even more money!) Learn to tell myself "after next paycheck" if I can't just tell myself "No!"
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I think for me, it's putting everything on auto-pilot.
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