How to save your money

People are always using money to consume rather than to conserve.  There is a constantly growing amount of spending excess money for the latest in clothes, vehicles, cell phones, computers, and eating out rather than at home.  To the average American money is something to "spend" on something you want rather than what you need, and when you do truly need that extra $1000 to pay for medical bills you don't have it because you went and bought a Massive DLP television or a new computer that replaced you "old computer" that you bought a year or two ago.

First off there are three basic things you can do with money 1. spend money 2. lend money 3. own money.  Lets say you pay a monthly rent on an apartment that you shall out $550.00/month.  This makes you a "spender and makes your landowner who receives the $555.00/month the "owner".  Now lets say you NEED (not want)  a new vehicle, but don't have the money and need a loan from the bank.  In this case you are still the "spender" because you will be charged interest on the amount that is lent to you by the bank who is the "lender" from loaning you the x amount of dollars, and is also the "owner" because of the profit the bank is making off the interest you have to pay them.

So you now know that you either spend, lend, or own money, but how do I save it?  Well a good strategy is putting 80% of you income into a fund (savings account, CD, time share, mutual fund, Roth IRA, 401 (k), or other) and do not touch it unless absolutely necessary!  Try to live off the 20% that is left.  Lets say your income after Uncle Sam has taken part of your pay totals to $2500.00/month and you put 80% of which amounts to $2000.00/month into your savings and you use the 20% which is $500.00 for your other expenses.  Develop the mindset of thinking that savings can't be touched and that all you have to spend is that $500.00/month.  Now lets figure what the reward of saving that 80% would be given 2 years time.  If you had $2000.00/month for 2 years in an account that has 3% interest (usually a high yielding savings account, mutual fund, CD) would total to approximately a $1500.00 amount of interest.  This doesn't sound like much, but lets say you look at it from a 15 year perspective and instead have this account in a Roth IRA with an average interest of about 3.2% throughout that 15 years the interest would equal $11,520.00.

In conclusion there are many ways you can save your money you can invest the money in the stock market or with an IRA and 401 (k) retirement plan which I talk a little bit more in detail in General Investing-Stocks and Retirement Plans.  The main thing to keep in mind is that to have financial freedom you must first learn how to save your money and to do that you must learn how money is used, and also keep in mind that besides what advice is giving to you part of the success is from failing or making a mistake it is learning from that mistake that makes you all the wiser.