Be aware of all your normal expenses. Check all bank- and credit card statements for amounts you pay, but the payments are for goods or services not needed anymore. Stop those autopilot payments and you will easily save up to a hundred dollars a month. You can also skip the lottery payments. There’s a higher chance that you will be struck by lightning then that you will win a huge prize in a lottery. There are better ways to spend the money you worked so hard for.
One day in my accounting and tax office Naomi walked in. She was living from social security and wanted to start her own business. We’ve set up a business plan that the social security officer couldn’t resist. Naomi has found all possible “free government money”. If you are living from social security there are a lot of people and agencies that are willing to help you. It may be in time and / or money. Basically she did so well, that she had covered all her normal expenses, including set-up costs for her business for the first six months.
Then I started to get to know her better. She had been living from social security for a period of twelve years. She had a fourteen year old daughter which she raised by herself. The father has left when the kid was two years old. She lived in a nice apartment and was always well dressed. You couldn’t tell that she’s lived from social security for such a long time. She really knew how to manage her money.
But it even got better. In one of our conversations, I asked her if she had a back-up plan if her business would fail. This is the amazing part. It appeared she had a small safe at home. Over the past twelve years she managed to save up to $ 6.000 which she kept in the safe. She also had $ 2.000 in her bank account which was allowed by social security. It’s amazing, all the things she did to lower her normal expenses so she was able to save that amount of money.
To me, Naomi is the living proof the you can adjust your “perception of normal” and that everyone should be able to save money. It’s not about the amount itself, it’s all about the mindset. If she can do it, you can do it as well. Like Benjamin Franklin said, beware of the little expenses, a small leak will sink a great ship. All small amounts are considered as normal expenses!