The Complete Beginner's Guide to Saving Money

A variety of personal and emotional hurdles can get in the way of making the best financial moves. As I discuss earlier in this blog, a lack of financial knowledge (which stems from a lack of personal financial education) can stand in the way of making good decisions.

But I've seen some people caught in the psychological trap of blaming something else for their financial problems. For example, some people believe that all adults' problems can be traced back to childhood and how they were raised. Behaviors ranging from substance abuse and credit card addiction to sexual infidelity are supposedly caused by their roots.

I don't want to disregard the negative impact particular backgrounds can have on some people's tendency to make the wrong choices during their lives. Exploring your personal history can certainly yield clues to what makes you tick. That said, adults make choices and engage in behaviors that affect themselves as well as others. They shouldn't blame their parents for their own inability to plan for their financial futures, live within their means, and make sound investments.

Some people also tend to blame their financial shortcomings on not earning more income. Such people believe that if only they earned more, their financial (and personal) problems would melt away.

My experience working and speaking with people from diverse economic backgrounds has taught me that achieving financial success - and more importantly, personal happiness - has virtually nothing to do with how much income a person makes but rather with what she makes of what she has. I know financially wealthy people who are emotionally poor even though they have all the material goods they want. Likewise. I know people who are quite happy, content, and emotionally wealthy even though they're struggling financially.

Americans - even those who have not had an "easy" life - should be able to come up with numerous things to be happy about and grateful for: a family who loves them; friends who laugh at their stupid jokes; the freedom to catch a movie or play or to read a good book; a great singing voice, sense of humor, or a full head of hair.

Tips to Make Wealth Building Enjoyable

Your investments and savings are ultimately a means to an end. The value of your portfolio rests in the enjoyment and security it provides for your family. This is often the reason normally rational individuals behave irrationally when it comes to their stock holdings; they secretly view each up and down tick as feast or famine.

You will never experience financial freedom until you have stepped off the consumption treadmill. Once you slip into the habit of borrowing tomorrow’s income to pay for today’s expenditures, you will begin to loathe money and possibly even your job or occupation. Instead of viewing it as an outlet for your talents, gifts and ambitions, it becomes a series of endless tasks you must complete if you hope to break even at the end of each month.

Many brokerage firms allow you to set up regular deposits by electronically transferring money from your checking or savings account each week, month or quarter. This is a very effective way to begin saving because you don’t actually see or miss the cash. On the same note, if your employer offers an automatic withdrawal option for your retirement account, you may want to consider joining.

There are hundreds of excellent finance, investing, economics, accounting, business and management books in the world. A few hours of well-directed reading each week can have a fattening effect on your pocketbook as well as give you something to talk about at your next cocktail party.

Clipping coupons and reducing household expenditures does not mean you have to live the life of a miser. Set financial goals and reward yourself when you reach those goals. Positive economic incentives can do marvels for productivity, and you may not find it nearly as difficult forgoing current consumption if you know a new pair of Allen Edmonds is in your future. Besides, when you associate a luxury good with an accomplishment, it has much more meaning and value.

Saving money, or the saving habit as Napoleon Hill put it so many years ago, is the foundation of all financial success, including investing. Having money saved is what provides the means for you to take advantage of situations, whether it's going back to college, starting a new business, or buying shares of stock when the market crashes. These saving money resources will provide a foundation and answer questions such as, "How much money should I be saving?" and "What is the difference between saving and investing?". You'll also learn the best places to save things like down payment money on a house.