Make Money with Your Money

While a significant portion of the just-out-of-college population is overwhelmed by student loans, rent, and other miscellaneous expense, it is possible for any person at any stage of life to begin planning for the future by saving for it.

The key to saving money is to stop thoughtless spending. Sometimes, creating a strict budget can be useful. However, you would be surprised by how quickly the costs of unnecessary indulgences add up. For instance, buying a pop every day will likely cost you around $500 over the course of the year. That is $500 that could be invested and earn interest. Imagine adding that to other common indulgences, such as expensive lattes from the fancy coffee stores, or pricey salon highlights and touch ups.

Eating out can also cost more than it's worth. One large pizza from a pizzeria can cost $20-$25, whereas a freshly made pizza from a grocer's deli will only run you about $5-$6. So, if you were to have a pizza a week, you could save as much as $1050 a year by avoiding the pizzeria! This is a spectacular amount considering the minimal difference between the types of pizza.

Entertainment can be a huge expense. One movie, with the treats, can cost $15 for one person. Instead, opt for a rental, pop some popcorn at home and enjoy the savings. The least expensive rental method I've come across is the movie rental machines that are set up in some convenience or drug stores. The rental can be as cheap as $1.99, provided that you return the movie within a certain time span. So a couple can relax with a great new release and a bowl of popcorn for as little as $3, rather than spending almost $30 at a movie theatre. If you want to go to the theatre to catch a new flick, go to a matinee or Tuesday cheap night to save a few bucks. Avoiding the snack counter will also keep that cash in your pocket.

Another important tip is to pay off all debt and not incur more. And don't use credit cards to pay off debt. You want to earn interest, not pay it! Every month, allocate a certain amount from your paycheck to go towards your debt. If you have an extra $25 at the end of the month, put it towards your loans or credit cards, not towards the newest DVD release.

It may seem as though you are depriving yourself in the short-run, but you will be amazed at how much more quickly you will move into a comfortable, debt-free lifestyle! Treat yourself, but do it less often and think about what you're spending before you spend it and what the ramifications will be. Will going to the concert prevent you from making your loan payment this month? Can you afford both a new DVD and a new watch, or can you wait on both? Are you willing to save less for mindless indulgence?

And remember: it's not just about the money you are saving; it's about the interest you will be making off of the money you are saving. Be sure to invest your money, even if it's only in a low risk GIC. Not only will it earn you a higher amount in interest, but it will deter you from spending it. The more savings you have now, the more money you'll make off of it.