Saving and Spending

If you want to have a successful savings plan, I think that the first thing that you have to figure out is what type of spender and what type of saver you are. That is, what do you have to spend money on to make you happy and what can you save money on, because you can be happy without it.

In my mind, what you should save and splurge on depends a lot upon the person. I think that there are a lot of articles on saving out there that tell everyone to save $4 on a morning latte at Starbucks. Maybe that's not a bad idea for a lot of people. But for some, maybe that latte is what get's them out of bed and going to work in the morning. Another idea I hear is to limit eating out. Again this might be good for some people, but I'm not sure it's for me. Eating out is really a great socializing time and a lot more important to me than buying stuff or gadgets. But, if you decide to keep the latte and the dinners out, you have to find somewhere else to save. Maybe a new car isn't that important to you or maybe you can get by on a smaller apartment. Of course, some people may be the exact opposite. They can get by without the latte and the dinners out, but derive a lot of happiness from a new car or nice house or apartment.

The point is, decide what are the most important splurges to you. Once you identify what is the most important, you can start finding ways to save on the rest.