Saving is the key to wealth accumulation.  It is the seed that gets you going.  Saving can be broken into two different areas.  There is being “FRUGAL” and actually “PUTTING CASH AWAY”.  Both of these are equally important.  If you do both you actually double your result.

Being FRUGAL means not spending any more money than you have too.  Do you really need a “DESIGNER” shirt?  Or will one from Walmart do?  With the almost irresistible pressure from modern advertising, the DESIGNER shirt is the only way to go.  You need to dress to impress.  Bullshit!!!  You need to BE impressive.  Rich people are impressive.  You need to look neat, clean, and dressed appropriately.  I would recommend that you read the book the Millionaire Next Door.   It is a much more realistic description of what REAL millionaires, do, wear, and drive than common knowledge.

Let me give you an example.  I lived in Vegas for 3 years, and as a sales person, I often was asked, by visiting sales people, to take them to a gentlemen’s club.  One of the Girls was talking to me one day, and said she felt she was not making as much money as some of the other girls, and did not know why.  Her physical assets were definitely not a problem.  So, I asked her how she chose her clients. 

She would try and see what kind of car they arrived in, who made their suit, and how expensive the shoes were.  If they arrived in an expensive car, and wore an expensive suit, and shoes, they must have money. I had to laugh.  I recommended she read the book the Millionaire Next Door.  She actually did read the book.  About a month later I saw her again.  She immediately came up to me and thanked me for tripling her income.

I asked her what had changed?  She told me that  she now looks for the guys that arrive in an old pickup truck, and are dressed like cowboys.  As she put it, “They, still have money, because they did not waste it on leasing expensive cars, and buying (on credit) expensive clothes”.  They still have cash to spend on me.  The book also taught me that I am just as attractive in tight jeans and a T shirt from Walmart, as I am if I bought them on Rodeo Drive.

She really learned that people who are Frugal, are more likely to have money than those who are not.  We all have a weak spot.  Mine is new tools.  I see a new table saw, and I am drawn like a moth to a light.  It would be nice, but if I actually use it, the new saw will look just as dusty, and dirty, as the one I have.

Being Frugal also helps with the second part of saving.  Actually putting DOLLARS away.  If you spend less dollars, then there are more of them left to save.

I have found, most people use the “I’ll save what is left at the end of the month” savings plan.  Since most people will spend money until they don’t have any; this plan never accumulates any actual dollars.

There must be a better plan.  As a matter of fact, there are several. If you are like me, you have been told since you were little, that you HAVE to pay your bills first.  It is good advice.  So, if you are into this habit, why not make your Savings a BILL you need to pay each month. 

If you’re not saving anything right now, why not make your savings a $20.00 a month bill.  Each time you get paid, pay part of your savings bill.  If you get paid every week, pay $5.00 a pay.  If you get paid every two weeks, or twice monthly pay $10.00.  This small shift in how you look at saving, has worked for many people.  Don’t have the will power to do that yourself, then let your bank or Credit Union lend a hand.  They will be very happy to help you set up an automatic Savings plan.  They love Savings Accounts.

One of the plans that seems (according to students) work the best, is a “ROUNDING” Plan.  This works with your debit card.  It is fantastic for saving money.  You can usually round up to the next $1.00, $2.00, or $5.00.  Everyone I have spoken to, has used the $1.00 system.  It is the least painful.  It works like this.  You go and buy a coffee that costs $2.50.  You pay with your debit card, and the final total is $3.00 even.  What happens is,  your bank or Credit Union, pays the $2.50 for the coffee, and puts $0.50 (50 cents) into your savings account.  In effect, every time you buy that coffee, your savings account goes up by 50 cents.  Ask yourself, how many coffees do I buy a week?  All of this happens with no actual effort on your part.

Another way that works well, especially here in Canada, because of Toonies and Loonies ($2.00 and $1.00 coins), is to take your coins every day and put them in a jar.  Every week take the jar to the bank or Credit Union and deposit it into your Savings Account.  That one actually requires some work on your part.

I often hear the excuse that if all I save is $20.00 a month, that is not very much money.  I always give the same answer.  Is what you do save, no matter how small, MORE than your saving now?  $20.00 a month is $240.00 a year.  That is more than enough to put into a GIC. 

Unless you win a lottery, BUILDING WEALTH TAKES TIME.  Unfortunately, it also takes effort.  It also takes knowledge.  The effort is up to you.  The knowledge is available in a lot of places.  Here is one of them.  It was Kevin O’Leary who told me, that even if you give away financial literacy knowledge for FREE, the people who really need it, won’t come.  He told me that about 5 years ago.  I did not believe him then, but I do now.  If you don’t like being broke, FIX IT!