How can you save when you just barely live on what you earn? Saving is a two-step process.

STEP 1: RE-TRAIN YOUR BRAIN
Saving money is a state of mind. Before you can start, you have to renounce the spending. Stop believing you need all the stuff you’ve been spending money on. Just don’t spend. Sure you want it, but that’s no excuse for buying it. The next time you want to buy something, take the $50 or $100 out of your wallet, and stash it somewhere. See? That’s called saving. You don’t end up with stuff-  YOU end up with MONEY. Other tips for the brainwashing you’re about to do: 

Become a cheapskate and copy your frugal mum or aunt or sister. Note that they fix the shower curtain instead of buying a new one.

Seek inspiration: Get thee onto MSN Search and type in "living cheaply," "frugal living" and "voluntary simplicity." You’ll find a gazillion Web sites devoted to living on less including www.thefrugalshopper.com and www.simpleliving.net

Cry poverty - with style: Learn handy phrases like, "Lets eat somewhere cheap." And "Shopping? Let’s go for a walk instead or a bike ride." It’s less embarrassing than you’d think, because more people feel the same way -- and they’ll be grateful you spoke up.

STEP 2: NOW SAVE IT!
There are a thousand ways to live on less without making your life a misery. Here are some of the most painless ways you can economise without losing out on the quality of life.

Don’t even think about it:  Direct debit is a savers best friend because the money is whisked away directly into your Kiwi Saver or savings account -- and you don’t have to do a thing. Except talk to payroll / admin or go online or visit the bank and fill out the forms. Today.

Go veggie: If you can do three meatless days a week (without substituting pricey fish) you could save $25 a week which equals $100 a month which equals $1,200 a year! Beans: Ya gotta love em.

Never spend a windfall: Take your income-tax refund, that holiday money from your folks, the $16.35 overpayment check from the telephone company and any other extras and save them.

Haggle: You’ll be amazed at who will drop their prices, fees and interest rates: airlines, hotels, credit card companies, computer/appliance/rug salespeople. You only need ask; if they say no you lose nothing;  BUT if they say  yes then that’s money you saved.

Re-evaluate: That dinner out costs more than you spend on groceries in a week. That new pair of shoes is worth half a bus pass. Learn what your money is worth then you won’t be so quick to dispose of it. Analyse your spending -compute how much work you need to do for the item you want to buy.  Say $50 for a new cardi means working 3.5 hours to pay for it.  That will keep you thinking – do you really NEED it?  Chances are you WANT it more than you need it.

Raise your insurance excess: Reassess the excess you pay for various kinds of insurance. If you can raise them, your premiums drop.  Talk to your insurance company and ask lots of questions.

Toss out the catalogues: This is the worst form of temptation known to man or woman. Chuck them straight in the trash.

Don’t pay unnecessary fees:  Like the late fees for returning videos. I know a woman who paid $60 in late fees to a video store. Or for returning library books which were overdue a month ago. They charge $1 on overdue fees – and that’s per book per day!  You can re-borrow or extend the time if you are not yet finished with it – just go to the library and tell them.


Clean it yourself:  Do not go to the garage for a car wash - do it yourself.  You save money and get an exercise in one go!

Never pay a pro:  If you can fix the neighbours car and she can paint the bathroom: do it. Bank your raise  You may think that a 50c or $1 pay raise is small. So add that to your direct deposit and live on your previous salary.

Pay less for toll calls: Look at your phone bill and see how much you're paying per minute. Phone companies have great deals for frequently called places (one without a surcharge per call) Did you know that Telecom offers a flat rate of $25 per month for toll calls to frequently called places?  You could talk for 2hours per call every day - anytime! You will save heaps on toll calls and can get in touch with friends and rellies as often as you like. 

Never pay full price: If you must shop visit the local Op Shops or the Salvation Army.  They have great clothes for less the price.  Or discover the online world of discount Web sites. Trademe is an excellent source of "used" goods - everything from books, toys, antiques, clothes, jewellery to office furniture -- to the entire first season of Grey’s Anatomy  or Desperate Housewives on DVD.

I could go on an on, but lets stop here. If you follow even a few of these tips (as I have) you’ll end up with a substantial chunk of extra cash every month. Just stay in the “savings” mode until you make it a habit.  And don’t blow your hard-earned cash on weekend sales, OK?

*Refrence: http://moneycentral.msn.com/content/Savinganddebt/Savemoney/