I was reminded of the story of a fellow blogger whose car passenger wanted her to stop by the store so she could buy a lottery ticket. When the driver asked her how much she wanted to buy, the rider said $5. The driver said hand it to me and as she did, the driver threw the $5 out the window. “Hey, why did you do that?” The response was simple, “I felt if you were going to throw your money away, I might as well do it for you and give you a better story.”
Yes, I am aware some folks win the lottery. But, I am also aware, hundreds of millions of folks do not. My strong advice is get a strong box and every time you feel the urge to play the lottery, throw the $5, $10 or $20 into the box and lock it up. At the end of the month, put it into a savings (or investment) account and do not touch it. Better yet, set up automatic deposits with each paycheck into a 401(k) plan or savings or investment plan. $10 a week will amount to $520 a year without investment earnings.
I touched on investments, but investing money need not be hard. One of the safer (but not 100% safe), higher dividend paying investments is in your electric or gas company. They usually have customer stock purchase plans that are easily accessible. Often, information can be found on the billing statement, but go online and check it out. These companies are quasi-governmental because of their community purpose, so they tend to be safer (but not totally safe) investments than other stocks. Yet, you can also google high dividend paying stocks online as these stronger companies tend to have stock purchase plans. One key suggestion is to automatically reinvest the dividends to buy more stock.
But, where you should start is your company savings 401(k) plans. This is especially true when the company matches your contributions. If they match 25%, that is an automatic 25% return if you immediately sold the stock. Plus, you are dollar averaging as you invest, so the vagaries of the stock market will be less impactful if you invest the same amount with each paycheck. When you leave that employer, you can leave a large balance in the plan, roll it into an IRA or just cash it out. Some plans will automatically cash out small balances.
Finally, the best way to save money is not to spend it. I have written several blogs on this subject, but avoid buying so many name brands and plastic water bottles. If you live in an apartment, the water is usually included in the rent. So, get a filtered pitcher and save money and the environment. And, don’t throw so much food away. Based on the product, those dates are “best by” dates not expiration dates. A key thing to remember is leftovers are our friends – three meals out of one dish can go a long way to saving money.
Too many folks are looking for panaceas to make a ton of money quickly. Yet, most people make money by not spending it and investing it. If you are young, you have a huge advantage over an older person – you have more years for your investment to grow.
Note: Please do not construe the above as investment advice. These are savings suggestions. I am not an investment professional, so check with people who are for advice. Stock values do go up and down based on company and market performance. And, the stock value is based on the solvency of the company, so do some research or invest in mutual funds that hold many stocks.