Everyone’s always looking for some simple ways to save money, and there are plenty of ways to do it. The fact of the matter is, saving money - by its very nature - is simple. You don’t have to explain some deep concept to someone, then whip out a powerpoint presentation to visually illustrate how saving money works. You don’t need to get a formal education to understand the vast depths of the saving-money concept. Nope, you just have to do something. And that is why it’s hard.

I ran across some simple ways to save money in an article in Fortune Magazine today. I thought I would share the basic thrust of the article.

The first thing the article mentions is the U.S. “dismal savings rate” - which stands at less than one percent. We can’t save beans. We are consumers. And we’re going to consume ourselves right into retirement poverty if we don’t give ourselves a swift kick in the pants - now.

Fortune outlined four problems and their respective solutions, regarding saving money. I will - logically - begin with the first.

PROBLEM: If you see money in your checking account, you spend it.
SOLUTION: Pay yourself first.

Here Fortune pushes the idea of automatic savings plans that can be implemented by pretty much any bank or investment institution. Basically, you tell them, “On the 5th of every month, take $100 out of XXXX account, and transfer it to my XXXX mutual fund.” And it happens. Fortune relates the story of a doctor who “regularly outspent his $200,000 salary” - but once he got on an automatic deduction plan of 5%, he said he didn’t even notice the difference.

I wouldn’t be able to sleep tonight if I also didn’t mention the power that comes from living on a budget that you have made before the month begins - where you tell the money what to do. Then once you (and your spouse if applicable) have committed to the budget, it tells you what to do.

Alright, back on track. Fortune’s idea can work for the guy making 40k also. A simple way to save money? Have it auto-deducted. THEN DON’T TOUCH IT. Just wanted to make sure that was clarified!

PROBLEM: You spend “windfall” money whenever you get it.
SOLUTION: Treat all money the same.

Now here I thought Fortune had a great idea when it came to this little problem. Let’s say you get a tax refund of $1000. You see the money as something “extra” that you normally don’t count on. So you immediately think that you can just blow the money somewhere. Now, I agree that sometimes it’s healthy and smart to blow a bit of windfall money - but with a savings rate of 1%? I just can’t justify it.

If you’re trying to get out of debt, you can’t afford to think of any extra money as windfall money. It’s debt money. It’s part of the key to your financial freedom. Fortune suggests:

Put the “found money” into a savings account for just one month and consider how to spend it later. By the time the month is up…the dough will likely feel more like savings… and you’ll be less likely to use it on a shopping spree.

Now that seems like a pretty simple way to save money. Elegantly simple. I love it.

PROBLEM: You throw good money after bad.
SOLUTION: Don’t let past decisions dictate future ones.

Fortune used the example of a couple that bought a $250,000 yacht and had three years of maintenance on the sucker before they finally decided to sell the money pit. Maybe we can scale that example back about - oh, $249,000 - What if you invest in some stupid multi-level marketing gimmick and burn $1,000 buying super guava juice made by the rain people in the deepest parts of the African Congo? (It doesn’t taste good, but man is it good for you!) You have sunk one grand into the project. Not wanting to admit your stupidity, you continue pouring your time, and even some extra money, into distributing fliers, building a website, etc. It still doesn’t produce. You should cut your losses and walk away. So another simple way to save money is to walk away from a bad deal - even after you’ve invested time or money into it. (This is not to imply that you give up trying to earn money. Notice that I said you walk away from a bad deal.)

PROBLEM: Saving money feels like depriving yourself.
SOLUTION: Visualize something concrete your savings will buy.

This is another elegantly simple way to save money. If you find you’re lacking the motivation to really sock away the requisite amount for retirement and security, practice visualizing what that savings will earn for you later in life. Can you imagine getting a check from your mutual fund holder every month for several thousand dollars? And all you did that month was visit grandkids, play golf, and volunteer at your church?

The sheer idea that my savings could work for me all the time is motivation enough to want to save. But find whatever you need to visualize that your savings will buy for you - then use that visualization to motivate yourself to save, save, save! If you need to, start small, then work up to a necessary amount of consistent savings.

Remember, how much you save and what kind of life you will live ultimately depends on you. Take the necessary steps to attain the financial security you desire.