The Eight Steps to TRUE Savings

If you want to save money, and I mean really SAVE money, then you are going to have to stop buying things. You have to reduce the amount you consume. This is the system I have been using for the last fifteen years to reduce my spending and to make sure I don't get tricked out of my hard earned cash.

Step 1 - Stop yourself!

Step 1- Guard your wallet

Before you reach for your cash, before you grab your credit card, before you pick the item up off the sales rack, pause for just a minute. Stop yourself and start your brain thinking about whether or not you are about to make a good or a bad decision. A marketer or salesperson's job is to make you think you need something that five minutes earlier you didn't even know existed. Find a way to trigger your internal alarm bell, so you can STOP and move on to Step 2.

Step 2 - Are you hungry?

If your belly is empty, then your decision making is impaired. Our bodies get confused between the desire for food and inedible objects. So if you are hungry, go away eat something, then wait for fifteen minutes before moving on to Step 3.

Step 3 - Is there something else?

There are so many other things you could buy. Is this item really the one you want to spend your hard-earned money on? There are so many other things you could achieve with this money. Will you be limiting yourself by making this purchase? If you have decided that this is the only thing you want, go to Step 4.

Step 4 - Is it worth the effort?

Every time you reach for your cash, ask yourself if it is really worth the effort. Every $15 you spend is an hour you are going to have to work. Is it really worth the bother? Just leave your money in your wallet - it's so much easier than having to earn extra money! Now, if you have decided the purchase is really is worth the bother, move on to Step 5.

Step 5 - What will you gain?

Now, work out what you or your family will gain by buying the item. What are the long-term consequences? Will it improve your health and happiness or genuinely give you more free time? How? If you cannot answer these questions positively, then leave your money in your wallet. It is important that you are really skeptical. Now move on to Step 6.

Step 6 - What will you lose?

Step 5 - What will you loss?

Every time you buy an item, you both gain something and lose something. If you are lucky, the only thing you lose is cash, and the time it took you to earn that money. But this is not always the case. A great example of this is a computer game. You gain entertainment, but you lose quality time with your family. Once you are certain you have worked out everything you will lose, move on to Step 7.

Step 7 - Is there a better way?

Step 5 - Is there a better way?

Now it is time to shop around for the best value and work out the smartest way to buy it. How can you get the most value for your dollar in the minimum time possible? Occasionally, working it out for yourself will take more time than you save, but you will get satisfaction in knowing that you have NOT been tricked and are doing the best for your family. Once you have researched your purchase and found the best way to buy it, move on to Step 8.

Step 8 - Do you have the spare cash?

Most of the time, buying things on credit is stupid. So if you don't have the cash, remain free, walk away and live happily ever after. Nothing is worth burdening yourself with debt for. This means you should avoid credit cards, lay aways, interest free loans, mortgage refinancing facilities, etc. Only buy something if you have the spare cash - and if you don't, go home and save until you do.

If want to save yourself some money, write down the eight steps and put them in your wallet! Every penny you save, is one you don't have to earn!

This was written by Fiona Lippey author of best selling book, The $21 Challenge and founder of Australia's largest frugal website, SimpleSavings.net. Here is a link to more information about the new American version of her best selling book:-

http://www.21dollarchallenge.com