With Savings, Don’t Miss the Forest for the Trees

Posted on : 16-07-2010 | By : Joshua Parker | In : Credit Cards Articles

Tags: Savings, Savings Don’t

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A lot of advice on savings focuses on little, day-to-day things: Making your own coffee instead of buying Starbucks; buying generic instead of brand-name; eating out less; and occasionally biking instead of taking the car.

That’s fine, and it can help trim the fat from your budget. But for real savings, it’s often necessary to step back, look at your life holistically and ask yourself some painful questions.

Books like Jeff Yeager’s The Ultimate Cheapskate’s Road Map to True Riches and Thomas Stanley’s classic The Millionaire Next Door point out that it’s big decisions that save big money.

Instead of trading down to a cheaper car, what would happen if you sold your car and took the train or biked?

Rather than moving into $2,000 studio apartment in Manhattan, what if you lived with family or rented from relatives for a few months, investing all your earnings?

What if you skipped vacations for a few years and put that money into a downpayment for a house?

None of these sound that appealing, until you think about having $50,000 or $100,000 extra in the bank some years down the road. Savings and cost-cutting are like any other type of investment – your returns scale with a greater initial commitment.