This is a guest post from our friends Mark and Amy:
How is it that there are some people who can survive and actually build their savings on a barely there amount of money and yet there are others earning twice, if not three times as much who never manage to pay all their bills and think that saving is something that only happens in soccer?
My brother is one of the most intelligent people I know, if he decided he wanted to be a rocket scientist he could easily invent the spaceship that would make it possible for average tourists to visit Mars. And I’m not just saying that because he’s my brother. He showed signs of genious when he was 12!
But when it comes to money – my brother is as dumb as dirt. He earns more than double my salary and yet somehow he never seems to have any money. After a recent discussion about the state of our finances I realized that there is one very big difference between us. I believe I am budget savvy, and he wouldn’t know a budget from his elbow!
The following are a few of the habits that I have developed over the years, some of them unconsciously and some of them because I had no choice and it is these habits which make me financially superior to my genius brother.
Firstly I’m a wise shopper who controls my spending
Before I leave the house I search for deals both online and in local adverts. I clip coupons, mail in any rebates I can and I buy in bulk if it means I’m going to save any money at all. I have an email JUST for signing up to any shopping and buying clubs and am currently a member of no less than 12! A couple of them, like my favorite promo codes service Discountrue, are deals sites that are responsible for half the savings I make online. I always eat before I do my shopping. Whenever I have to make a big purchase I make sure that I have done my research and I am getting the very best deal possible. I am not afraid to negotiate a better price if I think there is any chance of getting it.
My budget is simple and flexible
I have established a ‘guideline’ budget for my monthly expenses and savings and I have made sure that I always stick to it. My budget covers my everyday expenses such as food, transport and housing costs as well as monthly miscellaneous expenses such chronic medication and pet care. I have an amount set aside each month for ‘unexpected’ fluctuations in any of my usual bills and I have a portion that is untouchable unless it is a dire emergency.
I am financially techno savvy
I use technology to manage my money. My brother subscribes to blogs on the latest technology and scientific breakthroughs, I subscribe to blogs about living frugally and saving money like Discountrue I mentioned before. I use apps to track and control spending and daily living expenses. I have a smart phone, which I saved 6 months for, and I install apps and use the internet to compare prices, track spending and save money. Oh and I have become the queen of tracking down free wifi spots!
I am a habitual saver with a greater purpose
I have set a number of long term savings goals for myself. Some of them are very long term – such as buying my dream home and some of them are a little more immediate such as saving for my annual vacation. Before I buy anything I ask myself – if I buy this am I going to have to sacrifice my Christmas by the ocean? You’d be amazed how often that question makes me put something back on the shelf or close my internet browser!!! I invest as much as I can in interest bearing accounts and I have an emergency fund that I contribute to EVERY month! And unlike my brother, I avoid credit like the plague – if I can’t buy it cash or pay it off within a year – I don’t buy it!!
I truly believe that if my brother adopted just one of these habits of mine then he would find that the majority of his financial troubles would disappear. And the really nice thing about all of them? Anybody can do them and they are the type of thing that it wouldn’t really take any effort to turn into a habit!