Saving Money, Living Frugally and Setting Goals

There are many people out there that will tell you to put money into money markets and to save as much as possible and to start living frugally so that you can keep saving money. After saving money for a long time and creating what I call a nest egg I and many others like me started to wonder what we were saving money for. Living frugally isn't just about saving money, it is about spending smarter. Why would you want to spend more money than what you have too and why would you want to save money for no reason? These questions will be answered in this article along with why you should start living frugally.

My nest egg is complete, now what?

Once you got your nest egg completed you probably took a breath of air and a sigh of relief. Your nest egg is important and many people will start living frugally in order to complete this nest egg but why should it stop there? I have told many of my clients that living frugally is about saving money and not just for a rainy day but to purchase things that you need. Retirement is also a good reason to save money and to start living frugally. One you get your nest egg taken care of you should start putting more money into retirement but not all of it since you will still need to survive before you retire. Everyone should have a personal savings account that they can put money into for purchases that they will want to save money for. If one of your goals is to put a down payment on a new car then you can use this savings account to do this. It has been said many times before and even I have said that you need to have a nest egg of three times your monthly income but with the way the economy has gone it has taught me a lesson and now I believe that you need at least a six to nine months saved up.

What should I purchase first with the money I saved?

What you should purchase is up to you but if you really want to purchase nice things then you will need to start living frugally like I have said before. There are a few things that many people don't understand that they should save for and this all has to do with where you work. If you have to commute to work then you will probably need a car and it doesn't have to be a new one. Once you save up the money to get a car you will also need to save another emergency fund for if and when that car happens to break down. After you have your emergency car fund, you will want to work towards paying that car off with the money that you saved and then work towards saving money for other things. Another thing that you might want to save money for is a home. Everyone needs a home and there isn't any point in paying rent for the rest of your life when you can own a home.

Have do start living frugally to get these things and to save money?

Living frugally means that you need to be a penny pincher or tight wad when it comes to your money. Living frugally doesn't mean that you can't have any fun but you must learn to only have fun when you have the money to do so and after you create a budget for yourself that includes the amount of money that you want to save. There are many tips on saving money on the internet and in your library. Cable shows and even the news are starting to put tips out there to help people save money.

You can't take your money with you

I have heard a lot of expressions in my day but "you can't take the money with you" are still my favorite. This might be true but this doesn't mean that you should become a splurge hog but you can spend a little bit here and there as long as you do it the right way. Everyone should have a little bit of fun around their life and this is why I think that people should do something for themselves once a month. When you decided what you want to do then you should only spend a certain amount. What I often do is pay my bill off and put money into my savings account for three weeks straight and leave one paycheck open for myself. During the three weeks I find as many things on living frugally as I can. If I have any money left over with my last paycheck then I add that extra money into my savings account.

Saving money and living frugally is all worth it in the end when you realize that all of your efforts will pay off and you can have a lot of nice things as long as you are money smart.