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It is very important to have a budget for your income. I used to be of the mind that people that had a lot of money would have an accountant spend their money and pay their bills. And they simply, got an allowance of the money that they can spend. I always thought it was impossible to save money without having a very large surplus to stick in a savings account.

What I didn’t figure out until recently is that people need to establish a budget, and a savings plan long before they can afford a slimy accountant to handle their money. You should be budgeting to save money. Now I know the question in your mind is: how in the world can I save money if I’m barely squeezing out my electricity bill every month?

You’re not alone. Research says that no one is saving any money. In fact, research says that people are saving less now than they ever have. Research also says that people have 10% of their income that goes towards nothing tangible. Chances are you have 10% of your income that could be going straight to savings.

So let’s put this into perspective

If you drink a $3 coffee every weekday morning in year, you’ve spent over $780 on that coffee every year. If you reduce your coffee intake to 3 times a week, you’d save $312 a year. Take that Starbucks!

If you buy lunch at McDonalds every weekday, assuming you spend about $5 every day, you’re spending $1300 a year on your lunch. How about packing your lunch?

Let’s say you are a DVDaholic and buy a DVD a week. You spend about $1000 a year on DVDs averaging $19. How many of those movies do you rewatch everyday? Could you limit it to 2 DVDs month? And save $500?

Keep track of everything you spend in a month, find your 10% and put it in a savings account. Are you spending more than 10% of your money on fast food, coffee, and DVDs? If you put it in an interest bearing savings account, that money will work for you, instead of you working for it.