Savings or " Not Spendings"

We hear all the time about how much money we can save. We see it in shops - save $15, save 30% or we read about people cutting $25 a week off their groceries.

But are these really savings ? and if they are where does the money go ? I am quickly realising that most so called ' savings' should really be called ' not spending', in that unless you were actually intending to spend, for example, $100 on an item and you only had to spend $80 and invested the $20 - then that is a true 'saving'.

Lets look at it this way.

When doing our budgets we go through and 'reduce' our outgoings - $5 a month here, $2 a month there etc etc. - adding up to $400 saving a month and a whopping $5000 saving a year. But do we actually invest that saving and earn interest off it and add to it and make it grow ? Or is it simply money that we could have spent but didn't!

I am going to make sure that I 'scoop off' all the little 'savings' I find. For example, when I budget $150 for the weekly groceries but only spend $125 I will put some aside for weeks when I need to spend more to stock up and I will scoop off some and put in my 'never to be touched' savings account. I think in this category a 50/50 split with the leftovers will be good.

Are you frugal, do you work hard to save money .... do you channel that money into savings or into debt reduction ? Post your ideas here.

1 comment:

Michelle said...

When I revamped my budget at the beginning of the year I moved things around, cut back and cut out as much as possible. The result was a spending reduction of about $97 per week.
I rounded that up to $100 and set up an automatic transfer to my ING savings account. If it's not in my living expenses account I won't be tempted to spend it and so far have not noticed it missing.

I remember a few years ago my friends dh telling me that he had got a great set of speakers for his stereo for only $400, reduced from $680 and was thrilled with his 'saving' of $280. I pointed out to him that if he hadn't bought them at all he would have saved $400!! Complete waste of money as he didn't need them!!
Needless to say he was not impressed with my observation :)