Money & Finance

7 Tips on How to Save Money and Gain Financial Well-being

I want to tell you the story of how I embraced honesty, started thinking abundantly, learned how to save money and totally changed my financial situation, going from debt and financial scarcity to financial wellness in a matter of months. It is a simple story, and one that I think is miraculous.

Financial Ignorance is (Not) Bliss

The shame of living paycheck to paycheck and inevitably, in debt.

Around August 2019, after experiencing a panic attack in late summer, I decided to go part-time at my job to make my health and well-being more of a priority in my life. Working 8+ hours a day in the office behind a computer wasn’t suiting my mental or physical health anymore. So I reduced my full-time work contract down to 30 hours per week.

A few months later, I realized I was in trouble; I was upwards of 1000€ in the hole (in minus in my bank account). I was 29 and had no savings, no investments. I was spending roughly the same amount of money each month as I had done when I worked full-time; forgetting that a significant chunk of my salary was no longer being deposited into my bank account each month.

I want to point out here I was living no differently than the vast majority of Americans; paycheck to paycheck with next to nothing invested or in savings. My consumerist home culture had taught me very much about consuming endlessly; and very little about how to save money or achieve actual financial wellness. I had no savings from my previous 14 years of working or inheritance to speak of.

(Not Really Living) with Shame & Unworthiness

Then one day I found myself sitting with friends in Greece, having a vegan breakfast with a view of the sea. (Of course I didn’t think about if I could afford the trip, I just booked it.) It was one of our last days together at Honesty Europe’s Honesty Gathering.

After five days of telling the truth, also about our financial realities, I remember sitting there with my friends, thinking of my bank account balance and feeling completely undeserving of the trip I was on. I imagined that they all had much more money than me and thus deserved to be sitting here, in simple luxury, enjoying a coffee and musli at the beach. I told myself I was unworthy of this experience, that I didn’t deserve to be enjoying life this much with so little money to my name.

On holiday in Greece; feeling unworthy of the simple pleasures in life.

Back home, the bitter sensations of not being able to enjoy what might have been one of the best moments of my life in Greece, stuck with me. Feeling immense shame at my negative net worth, I decided to do something about it.

In the following sections, I want to share with you how I took charge of my financial life, transforming my situation for the better, and how you can too.

1) Come to terms with your financial reality.

How facing the facts and calculating my 90-day number lead me to rethink my finances.

In addition to repeatedly telling people my net worth and income at the Radical Honesty workshops I had attended over the last two years, I also had the following experience in late 2019:

The shock of seeing my bank account balance so low (negative!) coincided with me spontaneously finding the book Men, Women, and Money on the shelf of my company’s library. I checked out the book by Kevin O’Leary and within the first few chapters, discovered a simple exercise which would change my life. It’s called the 90-Day Number, and it can be used to give you an excellent picture of your financial health at any given point in time.

The exercise instructed me to go back and compare my total income and spendings over the last 3 months. The sum of the input and output is your 90-day number. At that time, my 90-day number was -521.71€. What the book says is that basically, if your number is positive, good for you! You’re on the right track. If your number is just above zero – you’re getting by, but may need to take serious action to continue to improve your situation and ensure that that number doesn’t sink below zero. If you are already significantly below zero, he writes, ‘disaster is already here‘.

And while I am not a fan of this kind of alarmist, fear-inducing language, I do think a wake up call was what I needed to take a good clear look at my financial situation and begin learning to get my financial life on track. In facing my negative 90-day number, I came face-to-face with my financial reality. I was honest with myself, and could use this newfound knowledge as power. From that day on, I decided that I would no longer be ignorant about my own financial situation.

2) Know your financial situation, at any time.

Now that I knew my 90-day number, I was ready to move forward with a more intentional awareness and acceptance of my financial situation. I made a commitment to myself to check my bank account balance at least once every month. This might not sound like a lot, but when you are living paycheck-to-paycheck, it can be a stress-inducing act to simply confront your current bank account balance (or credit card statement, etc.) at any time.

I now regularly check my current balance, careful to make sure that I am living within my means: not going into minus, but instead having a little something left over at the end of each month. The 90-day number had taught me the importance of maintaining this delicate balance in the long run for financial health; in the long run, it would produce results, and get me out of my own money-hell. With this, I developed the motivation to stay informed and up-to-date about my financial situation at any time.

3) Get out of debt first.

Another essential tip I learned from O’Leary’s book: get out of debt first and foremost. At the time that I was in debt in my checking account, I also had a meager saving account. I had strived to save something over the last few years – I had been working full time after all – but I was always unsuccessful. I would save a mere 50€ one month and then take it out of my savings to pay for something I deemed ‘essential’ the next. And I seriously considered keeping some money in my savings, even when I was in debt. Now I realize how ludicrous that was. Having 150€ in savings meant nothing if I was 800€ in debt, not to mention spending beyond my means.

Having debt of the kind I had only served to make me poorer; the bank was profiting off my unfortunate circumstances by charging me interest and fees on my nonexistent money. Yikes! So I recommend to do yourself a favor, and get rid of your debt as soon as possible.

4) Ask for what you want.

Around the same time that I faced my debt and unsustainable cash flow reality, I happened to be taking part in a 9-month course designed to train Radical Honesty trainers. Each month, we had a different module on a new topic presented by a Radical Honesty Trainer. That November, the topic was asking for what you want (one of the major themes of Radical Honesty). It was something I was slowly learning how to do in the first years of my practice of Radical Honesty.

So, I took this opportunity to ask for what I wanted, and started a Facebook birthday fundraiser for myself, asking friends, family, and acquaintances to help me get out of the little hole I’d dug for myself. The fundraiser was a success; within a few weeks I had received hundreds of Euros in donations and was able to get out of debt and back to black in my bank account.

You might be judging me negatively now for asking for help. However I look at the fundraiser as a win-win situation. I benefited from getting some financial help and out of debt; those who donated got the warm-fuzzy feelings associated with helping out a friend and doing something self-less. There was no harm in asking, no harm in those who decided not to donate doing so, and no harm in a few friends sharing a bit of their wealth with me. At least not that I know of.

In this, I silenced the voice inside me that said I need to do it ‘all on my own’. We don’t really do anything alone, nor is it natural to. Humans are social creatures, who depend on each other, on community, to survive and thrive. In my story, there is nothing wrong with asking for help when you need it.

To conclude; by asking for what I want, I was able to get back to about 0€ in my bank account; a healthy starting point. I was out of debt. It was now a simple formula I needed to follow to gain financial abundance.

5) Make more money than you spend.

Now that I was back to neutral, it was time to start tipping the scale in my favor. I recognized that I had to take the following steps, as soon as possible, to take charge of my financial health and get on my way towards financial abundance. If I wanted to start building wealth, my monthly income would need to exceed my monthly spendings. This money stuff is pretty simple after all, I thought!

To achieve this, I took on some odd jobs, like babysitting or English tutoring, in order to make a little extra every month and ensure I would not go into minus again while I was learning to curb my spending. When it comes to making more money, the sky is the limit; you are only limited by your imagination in terms of ways to do this. I would recommend to have fun exploring what kind of creative services you can offer, products you can create and sell, and other ways to offer yourself as you walk the road towards financial freedom.

6) Curb your spending by embracing the wealth you already have.

This was a big one for me. I grew up middle class in the United States, was well-educated, and now live comfortably in Austria. While I may not have large sums of money in my bank account or elsewhere, I have a roof over my head, health insurance, food in my fridge, loving friends and family, a job and stable income, clothes on my back, plus a plethora of other possessions and opportunities in my life that serve to make me feel rich.

So why did I feel like buying all the time? Why had I not learned how to save money? Throughout my life I’d gotten used to making impulse purchases, going out to eat on a whim, and generally not thinking much about spending a buck or two. I was addicted to spending, to the rush of excitement that came with buying something new. Yet inevitably, shortly after the purchase, the food would be gone, or the new possession would lose its spark that once brought me joy, and sit idly on the shelf. This left me with a lot of stuff to deal with, and a sinking bank account balance.

So instead of focusing on what I didn’t have and wanted, I started to place my focus on appreciating all that I already have. Recultivating joy in using old items I used to love and had since forgotten. I made, ‘I HAVE EVERYTHING I NEED’ my new mantra and hung it up on my wall as a daily reminder. I enjoyed the simplicity of making use of what I have, of appreciating the small and beautiful things in my life. For example, do I really need to go out to eat, when I have a grocery store right outside my house with everything I need to make homemade, delicious and nourishing meals? Do I really need a projector when I already have a laptop and Netflix? Do I really need new clothes, when I have seasons upon seasons of past wardrobes filling my closet to the brim? My answer is no!

By changing my mindset and recognizing how wealthy I actually already was, I was able to successfully and significantly reduce my monthly spending. I spent hundreds less on going out to eat every month and didn’t really miss it. I started to be more careful about ‘ghost money’ purchases – things like magazines, coffee, and alcohol – which we tend to buy often and mindlessly, not really realizing how much money we are wasting in the process. All that outgoing cash is an opportunity cost – it could have been invested and grown into a small fortune or perhaps the basis for a healthy nest egg someday. For me, it was a no brainer – expensive coffee drinks now are not worth more to me than being able to retire with peace of mind.

Want some more motivation to curb your spending? O’Leary discusses some simple ways to save money in the video below:

7) Save 10%, every month.

Speaking of nest egg – if you want to have one, then you need to start saving 10% – at the very least – now. This is the secret of the financially well-off and stable. Every month, put aside 10% of your earnings – consistently and without exception. Do not let yourself touch this savings. Set up automatic deposits from your checking account to your savings, at the beginning of each month or as soon as you get paid. You might forget about this after some time, and not even miss that 10% – but little by little, it will be adding up to your financial security. Once you have a more significant amount in savings, you can:

  • Put some money aside in a high-yield savings account, to earn better interest on your savings.
  • Establish a six-month (minimum) emergency fund, comprised of six month’s worth of expenses
  • Invest your money wisely

I acknowledge that I said that quite firmly – that’s because I truly believe that this tip for learning how to save money is some of the best financial advice I’ve taken so far and I want you to benefit from it too. If you’re already fantastically wealthy, good for you; I suppose you don’t need to heed my advice. But if you are reading this article, I suspect that might not be the case.

Now back to savings: personally, my savings philosophy, most of my life had been: 1) buy want you want and need and 2) save anything left over. The problem with prioritizing my spending over my savings was that, by the end of each month, there was nothing left to save. Now, the 10% I put aside is my priority; and I’ve learned to live within my means with what is left (or make more money, if I want to spend more).

My Journey to Financial Freedom

As a result of taking the steps outlined above, just a few months into 2020, I now have over 1000€ in savings, and over 200€ invested. It might seem insignificant, but I consider my current financial standing a major milestone on the path towards financial wellness and abundance. Moreover, I have a clear plan for how I can continue to drive myself, sustainability, into a healthy financial future. After living with very little in the bank my whole life, having some money to my name feels refreshing and empowering.

What I Do and Don’t Have

I don’t have a car, gas or maintenance expenses, or any other type of automotive payments. Since COVID-19, I also cancelled my public transportation yearly pass. I don’t have a house or mortgage. I don’t have fancy things or a big screen TV. I don’t have designer clothes (unless they’re second hand). I don’t wear makeup or spend a lot on entertainment or other types of leisure activities. I don’t have piles of cash sitting around.

I do have a modest apartment in a city I love. I have flatmates who like to cook for me and be cooked for. I have family in the neighboring state and three adorable nieces. I have beautiful nature around me. I have local friends who will meet me spontaneously for a coffee and friends around the world who invite me to their places. I have my Radical Honesty workshops, friends, coaches and community. I have the ability to write, to sing, to read, to learn, to laugh, to play, to talk and to share. I have good nutritious food on my plate, most of the time. I have clean water to drink. I have plenty of clothes to keep me warm in the winter and cool in the summer. I have basic furniture and a peaceful place to call home. I have opportunities to travel, to develop myself, to meet new people. I have love bursting out of my heart for the strange and wonderful people, experiences, places and things that make up this extraordinary life. I have my spirituality, my inner peace, my self-love.

I know that I am rich, despite my bank account balance or net worth at any time.

Summary: How I Went from Financial Lack to Abundance

In conclusion, here’s how I used honesty and some common sense financial advice to rid myself of debt and shame, learn how to save money, and turn my financial situation from hopeless to hopeful:

  1. I confronted the reality of my financial situation by talking about it with others and calculating my 90-day number.
  2. I commited to check up on my current financial state of affairs at least once a month. I stopped avoiding checking my bank account balance.
  3. I got out of debt.
  4. I asked for what I wanted, which meant asking for help. In this case, monetary gifts (not loans) from friends who would be happy to support me and likely feel good about themselves for doing so. A win-win.
  5. I made sure to make more money than I spend.
  6. I curbed my spending by acknowledging the wealth I already have.
  7. I learned how to save money and put aside 10% every month.

What’s your financial journey been like? Comment your thoughts and experiences on this article and topic below or share this article with a friend who might be able to benefit from these ideas and stories.

Wishing you wellness, prosperity, and peace!


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9 comments

    1. Hey Su! Thanks for reading 🙂 So far I am still new to investing. I imagine that it’s important first to understand your investment goals. (Do you want to make a lot of money in the short term or are you more in it for the long term? How comfortable with risk are you? What are your ethical beliefs on the financial markets/what are you willing to and not willing to invest in?) Personally I chose to invest in digital currencies, because I imagine that’s going to be the future. And I am still quite young, so waiting a few decades for this to pay off is okay with me. I imagine there are lots of good investing resources on Youtube and elsewhere 😉

      Like

  1. Abundance is everywhere… I think not only money or materialistic things stands for abundance. Also friends, a cosy home, friends, fun, amazing nature, family and appreciate and feeling gratitude for all what I have…. I also think investing wisely is a good. I learned not always save up money is the best, also buy with ease.🌷✨🌷 Happy wealthyness to all. Thanks for your experiences Chelsea

    Liked by 1 person

  2. I just paid off my last credit card debt last week and I now refuse to buy anything if I don’t have money in my account. I’m newly in partnership and am enjoying giving her time and space to get her financial act together, insofar as she wishes to, and it seems as if she does … in the meantime I share my financial well-being with her … I sense that she’d do the same for me were that necessary … and we are now choosing to manifest an income doing things together in a way that is creative and fulfilling … and in the meantime I’m driving a big truck once to three times a week to ensure my bank balance remains positive … 😊 …

    Liked by 1 person

  3. Thank you Chelsea. I’ve no problem in speaking about money and all of my adventures with it. I sense that the more I enjoy the sense of living in abundance, to which I dedicated a workshop called “Letting Go” 30 years ago, I have indeed always had enough to do everything I’ve wanted … I’ll gladly share my story with anyone who wants to know it … best to you … Robin …

    Liked by 1 person

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