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How to Save Money: Changing your Mindset

Updated on May 25, 2011

Change your frame of Mind

For many people even thinking about how to save money is about as welcome and as much fun as a root canal. It’s not that most of us don’t know different ways to save money or reduce expenses; it’s just that for many of us it feels like we are maybe missing out on something by cutting back on spending. It's not our fault advertisers have been try to convince us that our lives must be miserable if we don’t purchase certain products or services.

We can change our mindset by changing the focus of what we think is important. We can change our money saving frame of mind by focusing on where we’re going. One thing we can do to learn how to save money is come up with our own good money savers personal manifesto . We can make a list of all the things we think great savers do and then take pride in doing those things ourselves. I will try to list a few here but a lot of this is personal and depends on what each of us considers a keeper on our list of needs and preferences. The psychology of saving means directing our minds towards being a great saver. We need to pay attention to where we want to go. We no longer need to feel like we are somehow missing out by not spending.

Good Money Savers Manifesto

This is my own money savers manifesto. It's a work in progress. Feel free to add your own ideas and make a manifesto yourself.

1. Good money savers prioritize their needs realistically.

We all need food shelter and clothing. If we tell ourselves we need high priced food brands, a house we can barely afford and clothing we believe will impress our friends (are they really impressed?), then we likely won’t have much success in learning how to save money. The way we can change our mindset is by learning to take pride in saving money. Sure we can have a few guilty pleasures but overall we need to make saving something that we almost want to boast about (don’t though, no one likes a braggart). Trying to keep up with the Jones’ is a futile enterprise so why not step out of the race and take pride in what a great saver we have become. Bottom line, we need to spend less than we earn if we want to know how to save money.

2. Good money savers know saving money is good math.

One thing I have learned is that a penny saved is actually more than a penny earned. The reason is simple. Every penny we earn is taxed. If we are taxed at say 30%, then we really only earn .7 cents. So right off the bad we have made a profit of roughly 42.8 % when we save a penny (.7 +42.8%=1). Further, if we were to spend a penny on an item that requires sales tax, and the sales tax is for arguments sake 8%, then for every penny we spend we actually need to spend 1.08 cents. If we instead save that penny, we are saving an additional .08 cents because we didn’t pay any sales tax. No matter how we slice it, a penny save is much more than a penny earned and know this helps us learn how to save money.

3. Good money savers buy what they need.

Another thing I have learned about great savers is they know sales only save them money if they are buying something they really need. Impulse buying is a good saver’s kryptonite. For example, if I know I need shoes then I will maybe look at local circulars and see where there might be sales or maybe I know of a good outlet store that always has good bargains. What I won’t do if I am a good saver is buy things when I don’t need them just because they are on sale. As good savers, learning how to save money means only buying what we need when we need it.

4. Good money savers look at spending in terms of real dollars.

I often hear people say things like I saved $30 on this shirt. The truth is they really didn’t save anything. The shirt was an expense because they had to pay for it. They may have gotten a high priced shirt for lower than the suggested retail price but either way the buyer still forked over their real money for the shirt. Besides, the mark up on brand name clothing is often in the 200% range, so buyers are usually paying way above the actual cost of the item. A good saver who knows how to save money realizes that a $30 shirt still costs less than a $100 shirt that is 50% off. The difference in real dollars is still $20 and the good saver spends less by buying the first shirt. And the good saver takes pride in that!

5. Good money savers know there is a hard and a soft budget

What does that mean? It means some fixed expenses need to be paid ever month no matter what, like rent or a mortgage, a phone bill, or school costs. Other expenses are more flexible and we good savers learn to save by finding ways to be spending less in these areas. Entertainment, food to some extent, and personal care products are examples of soft budget items. If we give ourselves a fixed budget for these items we will usually end up reaching the ceiling of our budget because we believe we have that much to spend. It’s important that if we do that we try to give ourselves less than we think we will need in our budget. Good savers learn how to save money by making reaching a low budget threshold a challenge.

6. Good money savers plan for seasonal expenses.

Good savers not only take pride in how little they spend, they take pride in the ways they manage seasonal expenses. Good savers need to be proud of how they budget for those times of year that usually cost a little more. There are lots of creative ways to plan ahead and save money for special holidays. This is one time that we can buy things on sale when we don’t need them right away. I once worked with a woman who was on a very very tight budget. She bought sale items throughout the year so that she would be able to give her children a good Christmas. Because she spread it out over the year and only bought sale items, she was able to keep from spending too much during the holidays when prices tend to be higher. Good savers know how to save money by preparing ahead of time for the holidays.

7. Good money savers work to save.

Good savers enjoy working hard and earning a living so that they can purchase what they need and also so that they can add to their savings. They don’t see work as a way to just get money to spend. They also see it as a way to get money to save. Good savers know how to save money because they not enjoy the process of earning money to save; they also like the challenge of seeing how much they can put aside.

8. Good money savers share what they know

Good savers find ways to share information with other good saver friends or relatives. Good savers often know other good savers. When they do need a certain item they can often ask a friend where they can purchase the item and spend less. Some good savers are members of clubs or start their own newsletter for friends. They network with others who know how to save money. Good savers do whatever they can to reinforce the pride they take in not unnecessarily spending money.

9. Good money savers can have fun for free.

Good savers know how to save because they learn to enjoy the challenge of spending less. They often have fun finding ways to enjoy life without unnecessary expenses. They realize that many of the things in their lives that they thought were necessary expenses were actually just expensive distractions that they can live without. Good savers do truly learn to smell the roses and enjoy the simpler things in life. For some there is even a spiritual simplicity in not spending.

10. Good money savers know how to barter.

Good savers know how to save money by making creative deals for services and goods. They know how to save by offering to exchange services to neighbors or friends in exchange for their services. If they have hobbies or skills good savers will use them. I might teach my neighbors son to play guitar in exchange for my neighbor tutoring my daughter in math. Good savers will also ask for a discount when buying an item or paying for a service. They do not feel shame in telling others they are on a budget if it means they can get a service or product they need at a lower price.

11.Good money savers account for all of their shopping expenses.

Good savers plan their shopping outings because they know that repeated trips to the supermarket or department store involve other costs, namely the cost of transportation. Some of us know someone who will spend $10 in gas to drive across town to save $5 on one item. It makes no sense but they believe they are saving money. A good saver who knows how to save money realizes that all of the costs of purchasing an item need to be included, especially when comparing one item to another.

12. Good money savers supplement their income

Good savers often find ways to add to their income without spending much to get it. They take advantage of their own skills and passions and often find creative ways to supplement their income without needing elaborate or costly plans to do it. They often adhere to the adage keep it simple stupid. They don’t get sucked into get rich quick schemes and profitable plans that always ask for some form of cash outlay in advance. They know how to save money because they realize that if it is too good to be true it probably is. Doing something like writing hubs on hubpages is a good example. No cash outlay and you can write about whatever you’re passionate about.

13. Good money savers know when they are being fooled.

Good money savers realize that the reputation of name brand items and status merchandise is often over inflated. One example of this is the rise of designer vodkas over the past decade or so. Many so called vodka connoisseurs claim they prefer one expensive brand over others, yet blind taste tests have shown repeatedly that most so called vodka lovers cannot taste the difference. The taste tests proved that this odourless and mainly tasteless alcohol is being purchased at higher prices mainly for snob appeal as higher priced vodkas were rarely preferred over less costly ones in the taste tests. There are so many consumer items like this these days. When we know how to save money we don’t get fooled by designer labels.

14. Good money savers recycle.

Good savers learn to save money by using the resources they already have rather than always purchasing new. For example, that one year old cell phone might not be the latest and greatest but it works, and that means a savings of $$ by not buying a new one. They also don’t mind buying other peoples second hand items when they need them. Used lawn mowers and bicycles are everywhere. Do we always need new? Good savers learn how to save money by making these types of decisions and taking pride in them.

15.. Good savers have thick skin.

Good savers are unique individuals. They don’t worry about social convention and keeping up with the Joneses. I have noticed that some people who are good money savers bristle at being called cheap. Cheap implies low quality and most good money savers believe they live quality lives. They prefer terms like moneywise and thrifty. Still for a lot of good savers being called stingy or cheap is like water off a duck’s back. They know who they are and they are proud to not foolishly waste their money on unnecessary consumer goods and services.

16. Lastly good money savers enjoy keeping track of their expenditures.

They enjoy the challenge of seeing where they have found ways to spend less on the items they do need. They enjoy making month to month comparisons and seeing if they can find new ways to spend less. They are optimists and they spend less with good humor and a sense of pride. Good savers ultimately learn how to save money because they associate pain with unneeded expenses and associate pleasure with not spending their hard earned dollars foolishly or unnecessarily.

Making the change stick

These are some of the things I have on my good savers manifesto. Over the years I have been anything but a good saver. I started to slowly figure out that there is real value and pride in being a good saver. I learned by meeting some great savers. I am always amazed at how little they care about how others live their lives. If anything good money savers often pity the foolish spendthrifts around them. A good saver knows how to save money because they are a little dogmatic about it. That is why it’s called a manifesto and not a suggestion list or something less strident. It is possible to be a good saver and still have the odd guilty pleasure but good savers tend to see saving as their number one guilty pleasure.  I wish I would have figured this out when I was much younger but hey, it is possible to teach an old dog new tricks after all!


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      teena joseph 

      6 years ago

      nice post good work keep going..


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