Articles like this one often come off seeming stupid to people who know how to save, or insincere to those who are having a tough time getting by financially. Personally, I like reading such articles as a reminder of what I already know but may have temporarily forgotten. Saving does take a great deal of discipline that no longer seems to be taught to people, if credit card debt is any indicator. So little reminders are very helpful every once in a while.

I’m not going to look down on you and say that it’s easy to find $100 a month to save somewhere. I’ve lived in both frames of mind: saver and spender. But the easiest way to motivate yourself, if you are saving- challenged, is to decide why you want to save, what you are going to do with it.

Me, I’m a gadgethead. It’s been a long time since I’ve had a good camera, the price of digital cameras have gone down considerably since I bought my last one - which is stuck somewhere in Atlanta, Georgia, for reasons I won’t get into. That one cost me $1500 in 2000. Something of far superior quality now goes for $600.

So I gave myself a goal of finding $60 per month, for ten months, to save for a new digital camera (not including extra lenses). Now for me, a 100% freelancer/ starving writer, that’s a lot of money. Sometimes I have it, sometimes I don’t. But I really want that camera, and I can justify the expense by the fact that I have enough photog skills to produce pics that I can sell to an online stock house. If I only had the equipment to produce a new portfolio.

On the other hand, new digital cameras with even higher quality are due out late this year. Sure, they’ll be a bit more expensive, but again, I can justify the expense, especially for higher quality pics, without going overboard. So I’ve changed my goal to save $100/m for 9 months. (This goal was set early this year.)

As part of my goal revision, I’ve decided I can live without the camera until next year, given how busy I am. Instead, I’m going to save the money in an online savings account or money market fund, then invest it in a few select mutual funds or possible one or two stocks. When I’ve generated $2000 in both savings and returns from my investments, I’ll buy myself a digital camera and a few lenses, and reinvest the remaining $900 or so.

Enough rambling. Now for the meat of my post. Where I have found this extra $100 to invest? The short answer is by changing the priority of some of my expenses. The long answer involves going through a series of steps:

1. Make a list of all your monthly expenses in three columns: necessary, desirable, and extraneous.
2. Now make a list of your monthly earnings, and their sources.
• Some of you will only have one source. That’s okay. It depends on how you look at things.
• All of my income right now comes from writing online, primarily for other people. But I made a list and found that I currently have about 9 sources of income: either website advertising programs or writing clients. Albeit the advertising revenue is still tiny, sometimes as small as $0.07/mth from some sources. However, it’s still source which may grow if I can put more effort in. Maybe you’ll be surprised where all your income comes from, or can come from.
3. List any sources of potential income that you may be able to add to your previous list.
• Not all of them require extra time or effort on your part.
• For example, I’ll be adding at least 4 more sources of income before the end of the year, including online savings accounts, money market mutual funds, and stock trading accounts, not to mention a few more clients for my writing. Next year, once I have my digital camera, I can likely add stock photography to my list.
• Making this list helps you to view saving as not a means of sacrifice but rather a way to earn even more money. That in turn should motivate you to find additional sources of income to increase your savings. In my experience, too few people think through a process like this, simply because it’s not something that is taught. I’ve been guilty of that in the past.
• Of the above potential sources of income, the ones requiring the least effort are money market funds and online savings accounts. Stock trading and writing both take effort, but the payoff is greater. It all depends on your situation, skills, and what you effort you’re able to/ want to put in.
4. Decide how much you would like to save each month, what are willing to give up now for savings later, and what you plan to do with the money.
• Besides the digital camera and wanting to move back to Toronto or Montreal (Canada), or possibly Atlanta, for a few years, I’ve had a long-term dream to walk around the world. Nine years ago, I was going to take ten years off to do that, but was unable to.
• So I’m giving it another attempt, as soon as my debts are paid, loose ends are tied up, and my websites are generating at least a little bit of money.
• Again, I can justify the expense of travelling, as I’ll write for magazines about my experiences in each country, possibly get some work teaching English, and if I’m lucky, score a “travel guide” Internet TV show/ podcast or some such.
• Your intended use of your savings may not be so grand. Maybe you want the money for stock trading, real estate, regular vacations, or something you haven’t thought of yet. Notice that I’m mentioning big ticket items. Because saving a little bit per month eventually gives you enough for a big item. (You always have to break any kind of big goal down, if you want to have any hope of achieving it.)
5. Now that you’ve gone through all the above effort, throw away all the lists. Just kidding.

Seriously, though, the really important lists are your potential sources of income and your extraneous expenses. The latter is exactly where you’ll find an extra $100, $200, or more per month to save and later invest. This is where you have some leeway, as the money spent represents disposable income. (Unless you have some addiction to buying things you don’t need. Hmm.)

Now by extraneous expenses, I mean stuff you really don’t need. Do you buy three large bags of potato chips each week when you can get buy one bag? Depending on where you live and shop, that might be between $1.50 and $4.25 per bag (including taxes). Two extra bags per week, four times per month, is costing you between $12.00-34.00. Imagine that. Can you find a cheaper alternative, but one that’s not unhealthy?

Or maybe you buy items in bulk, just because the per-unit price is cheaper. Studies show that people often actually eat more when there are bulk items at home. Your mind reasons that there’s lots, so you can eat a bit more. The result is that your grocery bill, and your waistline, is often bigger than it needs to be.

Then there’s the coffee and donut on the way to work. I’m not telling you to give them up. Rather, are you disciplined enough to make your own fresh coffee at home and take it with you to go? Throw in some homemade pastries made the night before, when you might already be using your oven, and you’ve probably saved a couple of dollars a day on weekdays, say for a savings of $40/m.

You can see where I’m going with this. Be honest when you are making up your “extraneous” list. What you want and what you need are rarely the same thing. I often convince myself that I “need” to buy such and such a grocery item on sale. Extraneous groceries and snacks are quite often the source of excess monthly expenditures.

Consciously realizing what you are doing may save you more than $100/m per month. I’ve written before that when I was still consulting in office settings, that I was sometimes spending $200-400/m on restaurant meals and $100-200 on groceries that sat in the fridge and spoiled. A shameful thing, but it’s not always easy to recognize what you are doing while you are doing it. Writing things down makes your expenditures firm in your mind. And since the old adage about spending less than you make still and always will apply, it’s the expenditures you don’t need that are your key to finding extra money to save and invest.