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Welcome!

Thank you all for taking the time to drop by and learn about saving. This is my first finance blog post on Steemit and I thought I would start with a very simple one. I appreciate all comments and look forward to enriching lives! Thank you!

How Saving Small Makes A Big Difference

Saving is a simple idea that we all struggle at one point or another to do. The more you save, the better, but sometimes it seems impossible to stick with a constant plan. Here are some tips to help you save, and the impact your savings will have.

Save For A Purpose

When you put money away it should always be for a reason. The most important reason to put away money is for an emergency. This could be for any reason from job loss to replacing your broken water heater. Whatever the reason, this will be money that you need to access with a moments notice, and strictly for emergencies.

Another important reason to put money away is for retirement. This type of saving can be gradual and it wouldn't hurt to skip every now and then if your budget ran a little tight, but it shouldn't be forgotten about altogether.

You can create a savings plan for any reason, whether it's for your future wedding or a big birthday gift for someone close to you. As long as you have a reason for saving it will make it easier for you to keep your savings in place and not take it out on a whim.

Save Frequently

It's especially important to save frequently. The more frequently you save, the more you feel confident about your savings plan. For example, we might find it hard to save $200 a month, but if we save on a daily basis, we can find that money easily. We often do strange things like drive out of the way to save 2 cents a litre on gas, when realistically that will save us less than a dollar and take up a lot of time, but there is a better way. Make simple choices in the moment and bank the savings.

​For example:

If you make your own coffee in the morning instead of buying it on the way to work, you can bank $1. Every time you bring your own lunch to work instead of buying it, bank $5. Whenever you go out for dinner or lunch, pick what you want to eat, then find something else you want to eat a little cheaper, even if it's $2 less, take that money and bank it. When you go grocery shopping and you have to choose between the Gouda cheese on sale, or the cheddar cheese you want, choose the Gouda and bank the difference. If you make it a daily habit you will stick with it and you will find your savings grow.

Let's say by doing this you only manage to save $5 a day. That will quickly add up to $1825 a year! You can use that to go on vacation, or redecorate your home, or even save for retirement. If you take that $5 and invest it in the DOW Jones (A stock symbol that represents a lot of prominent companies) you can retire with a healthy bank account. Say you're 30 years old now, if you want to have a nest egg at 65 and decide this is the way you want to do it, then you'd be surprised at how much money you'll have by then! Taking the average return of the DOW Jones for the last 35 years, and adding $5 a day to it will give you $1,138,875 when you turn 65! If you're starting at 20 years old, that number is even better at $4,002,596.

Now to be realistic, if we adjust for inflation your money will be "worth" about half of that, but still an incredible feat for only $5 a day that you can find just about anywhere.

Save On Pay Day

My favourite way to save is on pay day. Whether you're starting your first job, or a new higher paying job the very first thing you should do is realign your savings plan! We all have grand dreams of winning the lottery and quitting our day jobs, but the reality of it is that you're more likely to be hit by lightning 8 times than to win the lottery. The good news is that we can make our own lottery.

The best way to save on pay day is a percent of your pay. A good start is 10% of the money you earn on pay day, and if that doesn't break your budget bump it up 1% every pay until you find a comfortable balance. Most importantly, make sure you do not touch that money unless it's an emergency. Pretend like it's not even there, and that you make a little bit less than you actually do. It's incredible how well we can get used to this. Some of us find a way to spend our entire pay before the next pay day, regardless of how much we make, and so this can be a good strategy if you're that person.

Let's take an example that we want to buy a home in 5 years and need a down payment, so we save 15% of our pay every biweekly pay. If we earn $900 per pay after taxes, that adds up $135 saved every biweekly pay.

If we take that $135 every two weeks and invest it in the DOW Jones (A stock symbol that represents a lot of prominent companies), after 5 years we will have $25,845. This is assuming you don't get any raise or promotion for 5 years, which is usually not the case. A simple yet effective strategy for a down payment!