Here’s my best money saving tip; know the trade-off!
My best money saving tip when saving for something really big is to break it down into bite sized micro-saving goals and understand the trade-off.
It is very common to get overwhelmed when you are saving for something really big.
It is easy to think that when you are saving for something significant like a down-payment for a home, tuition for additional education or a car, that a few hundred dollars squandered or spent on something other than your goal won’t make a difference. However, in reality when you are saving for a significant goal, EVERY dollar DOES make a difference.
If you only celebrate every time you reach a large significant milestone, which are few and far between, you won’t necessarily have a great deal of motivation; it is easy to get discouraged. However, if you break down the sum of money you need into make smaller milestones, you’ll likely be willing to forgo some of the frivolous or unnecessary purchases in order to take one step closer to achieving your goal!
So think about your saving goals differently. Rather than needing to save a massive mountain of money, consider acknowledging every time you’ve saved enough for one more square foot of your dream home, one semester of a course, or one more part of the car.
Thinking this way may even encourage you to take on a little extra work if possible, now that you can measure in a tangible way how it will bring you closer to your goal.
Check today’s Limor TV episode to see how I saved over $27,000 to pay for the cost of living in Europe for a year.