Saving Yourself

Because you can. First things first: explore the source of your poverty:

Banking: Take the first step and look at your bank statements and checkbook. Just look at it. Observe what you take in and what you spend. How the hell are you still eating? Oh I see, with the...

Credit Card: If you spend what you don't have and feel entitled to shit you don't need, don't worry, no one will ever accuse you of being un-American. But there is little sympathy for people who can manage and just choose not to. For example, take Kwame. There isn't a person on earth who feels bad for a man who rents a $1M Mansion, yet claims he can only pay $6/month in restitution for his crimes.

This is not to say that all credit cards are bad--they can in fact be quite useful when used correctly. That said, if you have several credit cards, pick one with a good APR and preferably one that gives you points or a percentage back for every dollar you spend and stick to that one so you can develop good spending habits. I use the ChaseFreedom VISA, which gives you 3% back of your spending dollars. It is lovely to get that $10 or $20 check every month from your credit card company but don't let even "ChaseFreedom" fool you. It is a system built to encourage more spending because you always rationalize that you're saving money by getting 3% back. This is why you need to...

Develop some sort of self-control: After looking at your credit card and bank account budgets, combine them both and find out what you have to spend monthly on rent, utilities, food (guesstimate it), other things you "need" like wireless, and subtract that from your after-taxed income. Take a look at it. Can you split(or pilfer) Internet with your neighbors instead of buying it yourself? Can you get a roommate? Can you ride a bike to work?

Cut out the fat and figure out the amount it takes for you to live. Let's call this your Survival. Here's an example for the class:

If I make $1300 a month after taxes, I must subtract out:
-$400 in rent
-$80 utilities (wireless, heat/electricity, water)
-$140 groceries
-$160 gas (for commuting)
-$50 health insurance (the sadsack, catastrophic coverage)
-$50 cell phone
________________
$420 leftover

Survival = $880

Know that every month you will have to spend $880/month for your Survival and that the rest is extra. What you should do with the extra is up to you, but with this amount, I would put $250 per month into a savings account. Saving is important for all sorts of reasons: for the horrible what if's that life can make reality, for retirement, for school, for travel, but what is more important than just saving is that you save for a specific something. Studies show that if you focus on saving an amount each month for that one, special thing that you really really want, you're most likely to actually do it.

So based on our calculations, I have $170 leftover, meaning a record $42.50 to spend as I wish per week. Wahoo! Mental note to self: do not blow it (all) on shoes and booze.