Saving is boring.
It's not like investing. Investing gives you thrills as you think about what you're going to do with your money. You search dozens of companies for the ones you think will do the best. Then, once you buy the stock, it becomes your friend. You can look in on it several times a day to see how it's doing. You can watch its value go up and down.
Saving doesn't give you that kind of constant feedback.
But it's much more important.
Twice as nice
Combing through your budget to find expenses you can cut back on may not sound as interesting as researching the latest hot company. Yet the payoff you get from finding ways to cut your expenses can dwarf even the most lucrative stock pick. That's because savings keep paying you back, day after day, month after month.
Think about it. If you make $5,000 a month and spend it all, you're not getting ahead. You're dependent on your next paycheck, and you're giving up your chance to find the hidden fortune inside it. But say you find a way to cut your expenses by $500. Now, you've got some extra money you can save.
That savings is worth more than you think. Your cost-cutting has given you $500 to invest right now. But it's also given you a leg up on next month -- and every month after that. Now, you need only $4,500 to pay your living expenses instead of $5,000. In a single month, your $500 savings has already doubled -- just by trimming the fat out of your budget.
Before you know it, that $500 will become your constant companion. Every month, you'll look forward to having it left over after you pay your bills. You'll want to find new ways to save even more. Simply by spending less than you make, you may find yourself on your way to becoming a millionaire faster than you can chew a stick of Doublemint gum.
Make your savings count
If you're just getting started working with your money, finding the next Dell
It's hard work finding ways to cut back on your costs. At the Fool's personal-finance service, Motley Fool Green Light, Fool experts Dayana Yochim and Shannon Zimmerman give you new ideas every month on ways to make your dollars go as far as they can. This month's issue, for instance, teaches you how to cut your travel costs by finding the cheapest airfare and hotel rooms while avoiding common mistakes. If you're planning a vacation for the summer, you owe it to yourself to take a look. It's absolutely free, and there's no obligation.
As fun as investing is, saving is the real key to financial success. Even small steps will get you started on the path to riches.
Fool contributor Dan Caplinger saves every chance he gets. He doesn't own shares of the companies mentioned in this article. Microsoft is an Inside Value recommendation. Dell is an Inside Value and Stock Advisor pick. The Fool's disclosure policy tells you what you need to know.
