Do you manage your money well? I really have been thinking lately about what we spend our money on… and where we want to be when John retires.

Although I consider myself somewhat anal about money, I am a person who likes luxury. I do not like to deny myself. I was addicted to credit cards for many years. I just didn’t really grasp the concept of money. I logically understood what credit card debt does to you, but I couldn’t see it. And I felt like I would always have it so I just kept charging. We accumulated at one time in our marriage over 60K in credit card debt. I know what drowning in debt feels like. And it sucks. We now have none.

It was very hard for me to break out of the “I’m entitled” mindset. I just didn’t want to delay my gratification. It wasn’t until I had a child, that I realized that I had better do SOMETHING. That being with HER was where real wealth lies. And I didn’t want to work forever.

I think to get past the entitlement mind trap, you have to really understand the value of your money. Money is really a currency for time. Time is really what is valuable.

As an exercise take how much you make, subtract out your deductions, taxes etc. Deduct your driving time, your dry cleaning bill, anything you have to pay for to keep your job. Maybe it’s lunches out, maybe it’s more expensive insurance because of your commute.. Deduct it all. Then divide it all by how many hours you really put in per week. Include your commuting time. Let’s say you come to $15 an hour. This becomes the real number in which you should compare every purchase.

Next time you want to buy a new shirt that costs $30 bucks, think about if it’s worth working 2 hours for. Literally start paying yourself when you deny yourself things. Take that $30 and put it in an envelope. Do it for a month and you will be SURPRISED how much you accumulate. If you don’t make saving fun, you wont do it. And seriously, if you commit to doing this for a short time, you’ll be amazed how you start thinking differently about money and how much fun savings becomes.

Some folks say keep a journal where your money is going… and that is good too… but it won’t help you turn the corner to become a “saver”. This will.

I don’t work now, but I can still make a million before my husband retires. I view my job now is saving this family money. Assuming he retires at age 67 (We hope it will be way before then but for this exercise lets assume 26 years from now) Let’s assume the stock market on average returns 10% a year and we’ll compound interest monthly. If I can save approx $676 per month, I can make it a million in 26 years.

Here’s how I do it without TOO much effort:

Weekly Savings:
Have “breakfast” supper once a week. $10
Switch to Powdered Laundry Detergent: $3
No name brand cereal: $5
No frozen food meals for lunches: $10
Create menus using “SALES” vs. buying what I want. Go to different stores to buy what is on sale: $30
Buying gas at less convenient but cheaper place. $6
Buying Milk at the cheapest store in town (half price!) 6.
Cutting down the diet soda consumption or switching to off brand: $10
Weekly savings: $80 computes to a monthly savings of: $320

Monthly Savings
Dropping 1 Cell Phone: $50
Buying gas at less convenient but cheaper place. $6
Dropping eating out once a week ($50 per pop): $200
No impulse magazine buying throughout the month: $10
Buy cheaper shampoo and conditioner: $5
Buying no name brand pull-ups for nighttime wear for multiple kids: $16
Monthly savings of : $287

Total monthly savings of: $607

Which makes me short $70 a month.

Oh sure, I could cut the lawn service. I could cut the latte I get occasionally. I could cut when I treat my kids to slurpees, or the chocolate I buy at the grocery store. But I still want to live.

And that is what savings is about really. It’s not about denying yourself. It’s an excercise in prioritizing.

These are things I feel I can easily give up. What things can YOU easily give up? Maybe you’ll give me some ideas and I can squeak out that additional $70 per month!

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