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FOOL SCHOOL
Budget Properly
Ideally you need to work out your essential monthly outgoings and then add a little extra to pay for the odd little treat like books, CDs, DVDs and going to the cinema (don't be too extravagant now!). Hopefully you live well within your means in which case you'll have some surplus money to stash away. Don't worry if you need to start small - even a tenner a month will build up eventually.
Look at your monthly expenses in detail - all of them. There is rarely one that can't be cut in some fashion with a little effort. See where you can prune so you can free up more money to add to your savings. And try to take care of the stuff you've already got. Servicing your car regularly means you won't have to get a newer one so soon, for example.
You should evaluate your budget at least once a year to make sure you're still on track because your goals and circumstances will change. Some short-term expenses may be paid off and new ones will be added so you'll want to know if you're still cutting back as well as you could.
Change your way of thinking
You do not have to keep up with the Joneses. The single greatest money-saving strategy you can learn is that whenever you run across something that you are certain you absolutely must have, just wait a little while. It's highly unlikely it's going to go away and if you take 24 hours or even a few days to think about whether you really want it, the desire to have it often subsides. Besides, the longer you wait the more chance you've got of it having come down in price while you've been thinking!
The most important thing is to have a clear goal about what you expect to achieve through your efforts. For some, it might be the vision of being able to go to Australia to see a relative they haven't seen for years. For others, it's the desire to make sure their children get the education they deserve. And for others, it's the security of knowing that they are not over extended and can respond to any emergency that may arise.
There are probably as many goals as there are ways to live below your means so you can save more money. But the best one is to never lose sight of the goal and the reason why you are striving to save money.
Pay yourself first
Generally, you should put away as much as possible with the goal being to save 10% of your annual income (total, not take-home). Depending on your obligations, you may be able to save more or less. The more you save, the more wealth you create - but anything is better than nothing. Remember, even a few quid saved now will be worth more than lots of them that might be saved later. So take advantage of Standing Orders and Direct Debits and use them to automatically transfer your money to some sort of savings vehicle. You'll be surprised how easy it is to live on a little less each month. You probably won't even notice the difference.
Be flexible about it. If you find yourself eating beans and rice every night for a month (and you don't like beans and rice), then maybe you're paying yourself too much. Perhaps you're not in a position to start paying yourself at all. But as soon as it's feasible, jump in.