Saving on a Budget

Perhaps you are like me -- I wasn't much of a saver before marriage. I spent what I made and I wondered how people saved. Oh, I was good at paying off a debt, but saving? Forget it.

Then I met my wife, the professional saver. She always seemed to have a bit of money tucked away for any emergency. While we were dating, I asked her secret.

Her response? She always took her lunch.

No kidding. She always took her lunch! She rarely bought a lunch meal. And that saved her about $40 a week. Most of that, she tucked away in her savings account.

At a flat amount of $160 a month, she amassed almost $2000 a year, without ever feeling unduly deprived.

Now, I couldn't quite understand that at the time. While it seemed easy, wasn't it a pain in the butt to make sure that she had stuff to take for lunch all the time? No, she said. She had to shop anyway. She had to cook anyway. (Well, for me, that was debatable.) And the money it saved her meant that she always felt "in control" of her finances.

She's been a fine influence on me.

This is what has been called the "Latte factor". If you can find as little as the amount of money that you put daily into your favorite coffee beverage, you can save. Perhaps it means investing in a thermos and taking your coffee with you in the car, rather than stopping at the drive-thru. Perhaps it means not buying your lunch out. Maybe it means some other small revision in your life -- nothing too drastic -- that would put a bit of money into your hands. Then, the trick is to get that money into the bank, before it gets into your hands and spent.

And that, can make a big difference in your life and in your mortgage. What happens if you take even half of your savings, and dump it into your mortgage every year? You could shave years off the time you have to pay it off. You can save thousands in interest. It's all up to you.

Michael

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