You've probably figured out some things you really want, changes that will increase your everyday happiness. If you saved money, these would become easier options for you. So, how to save?
To increase your savings, set up an automatic transfer from your checking to your savings account to take place the day after you get paid – and if you haven't done it already, set up direct deposit of your paycheck. Streamline the process of your money going to work for you. If your company has a 401k retirement program, look into whether they match funds; it's the most simple way to give yourself a raise.
Already automatically transferring money to savings or retirement funds every paycheck? Good. It's time to take a look and see how you can do more. Those tips I’ve mentioned about cancelling a service you don't really use (hello, gym membership or cable TV you never enjoy or magazine you don't read) can free up some cash here. Apply it first to high interest debt or if you've conquered that – go you! – then increase the amount heading into retirement savings and into an emergency fund to get you through rough surprises.
Even if you're living paycheck to paycheck find a way to pull out $10 every check and automatically put it into savings. Figure out the things that would save you the most money – moving to a new apartment closer to work, perhaps – or which would help increase your cash flow – a good outfit for interviews and some nicely printed resumes, maybe – and do that as soon as these special savings allow.
Take a look at where your money is going. Are you going deeper into debt or paying it off? How's your tax withholding? If you had to pay out a huge amount at tax time and your income hasn't changed much, then maybe you should increase the withholding to spare yourself the scramble for the money. Got a huge return? How about lowering that withholding and setting up an automatic transfer of that cash difference in each check into a retirement account – you won't feel the difference throughout the year and your money will be earning you interest instead of the government.
Balance your checkbook and credit card statements every month. Not only will it keep you aware of any trends in the flow of your money, it will also mean that you can catch bank errors or identity theft while there's time to do something about it. My financial security rule of thumb: if you are carrying debt with over 6% interest, you should stop using your charge cards and cut optional expenses to the point where you can make significant payments on it every month. Try paying 10% of the current balance owed this month if you can and then keep paying at least that dollar amount each following month. That will rid you of that debt within a year.
As with so many things, the key to improvement is to change the inflows and outflows. Bring in more money and spend less.
Work toward getting a raise. Make sure you’re getting the most matching funds from your employer towards retirement. Cut expenses for things you aren’t rewarded by. Sell the three most valuable things that you own that you don't want to own anymore – eBay, Craig's List, going to an appraiser, yard sale, whatever works best. Turn them into money, then take 10-20% of it to use for something fun, like dinner out, and use the rest to discard some debt.
Enjoy more free stuff. Visit the library. Take advantage of the great resources entertainment resources online, from the ebooks in the Internet Archive’s Open Library to free songs offered by bands on their websites.
Pay less for what you do spend money on. About to go shopping? Think about whether all of it really needs to be brand new. Sure, you don't want hand-me-down underwear or food, but a winter coat? A dining table? A breadmaker? Get familiar with your local resources. What kind of things do the different thrift stores have? Are you in a Craig’s List area? Does your community have something like a ‘pay-and-take’ where unwanted goods can be exchanged? Don't forget to ask your friends and family! Maybe someone has exactly what you need languishing in a closet and will give it to you, sell it cheap, or swap. Comparison shop between new furniture and antiques. My Ikea office cabinet and my beautiful 1920's armoire weren't very different in price, but the latter gets much more active use in its place of honor in the living room. Whatever you settle on, remember that you have a lot of options beyond what gets advertised.
Scratch the going out itch cheaper. Want to visit that pricy restaurant but it's outside your budget? Don't go for a full meal. Have a serving of something decent and cheap and then go out for just appetizers at the posh spot. What's even better about this is you can enjoy them at the bar in many places and avoid the wait for a table.
Vacations often come with lots of hassles, especially if there's an airport involved. Why not save that money, stay at home or close to it, and spend it on fun stuff? Get a massage, go to a movie, buy 20 new-to-you albums at the used record store. Plan a getaway soon that involves as little driving as possible. Let go of your normal routine and obligations and putter around your favorite neighborhood. I find the restorative effect is magnified tremendously by doing this on a day you'd normally be at work – just be sure to leave your mobile phone at home so none of those silly people working can distract you from your vacation.
Anytime you’re at home you can also take advantage of the opportunity to hunt for buried treasure in your own place. Pull out those old boardgames you haven’t played forever and have a Battle of the Games to decide which ones stay and which ones go to charity. Re-read old books. Watch old movies again. Extract some of the remaining pleasure from what you already have invested in. When something runs dry, send it on to a new home, but you’ll be pleasantly surprised to discover how much you have that still can give you a free evening of fun.
One thing to note about saving up for a better life is that this does not need to be an ever upward climb; simply figure out what really makes you most happy and relaxed and continually reposition your world a little closer to getting more of that without falling into debt. For most people it turns out not to be yachts and diamonds, just a job they like, while living in a place they love, and getting to spend time with people they enjoy. That's not as expensive as you might think, so take another little step closer to it today. Do what you actually enjoy and strive for your own dreams, not what someone else – especially not some advertiser – tells you you should want.
“Chronic remorse, as all the moralists agree, is a most undesirable sentiment. If you have behaved badly, repent, make what amends you can and address yourself to the task of behaving better next time. On no account brood over your wrongdoing. Rolling in the muck is not the best way of getting clean.”
- Aldous Huxley, A Brave New World
Why is spending for a transient experience okay on food and movies but we get ourselves in such a twist over objects? Wrestling that insidious feeling that if we get rid of this object it will mean that we wasted our money causes us to behave as if somehow by keeping it around we are improving our chances of compensation for the expense. We aren’t.
So how to avoid the guilt of bad buying decisions? Think about purchases longer before making them. Also, recognize that you will make some bad decisions. As one Discardian put it, “Did you get your money's worth? If you are ditching a $5 paperback book, did you enjoy it $5 worth? If you did, then, like a loaf of bread you ate, you got your money's worth.” For that reason, sometimes the cheap (or used) version of something is the better way to go; give yourself room to feel free to part with it.
Once you’ve gained what you needed to get or learn from something – including an emotion – it’s perfectly acceptable and often helpful to let it go and move on.
The flipside to this coin is the stuff you fail to enjoy because you spent so much on it, but which you know you would still enjoy. My friend, writer and mom Meg Hourihan, wrote poignantly of this dilemma:
“I'd keep bottles of wine and treasure jars of jam for so long they'd be no good once I got around to using them. I decided life was too short and that it was important to use the good stuff. And now I do, mostly. I saved a beautiful birthday gift of 1989 Laurent-Perrier Champagne too long (no situation ever seemed good enough to justify its drinking) and when I opened it, it was passed and I was so sad. It was just the kick in the pants I needed to remember to use the good stuff.”
Journalists and wine critics Dorothy J. Gaiter and John Brecher of the Wall Street Journal recommend you quit waiting for some occasion special enough for that most special bottle you've been holding onto for years. They said:
“We invented Open That Bottle Night for a simple reason: All of us, no matter how big or small our wine collections, have that single bottle of wine we simply can never bear to open. Maybe it's from Grandpa's cellar or a trip to Italy or a wedding. We're always going to open it on a special occasion, but no occasion is ever special enough. So it sits. And sits. Then, at some point, we decide we should have opened it years ago and now it's bad anyway, so there's no reason to open it, which gives us an excuse to hang onto it for a few more decades. So OTBN – which is now always the last Saturday in February – offers a great opportunity to prepare a special meal, open the bottle and savor the memories.”
You can wait until the last Saturday in February if you like, but wouldn't tonight be a good enough for a special meal with those closest to you and a toast to the past and the future over a glass of something fine?