What does it mean to save money? According to WordWeb, it has two meanings relating to money:
- Spend less; buy at a reduced price
- Accumulate money for future use
Note the subtle difference. While one definition is about spending, the other definition is about accumulating money. I ask this question:
Can you spend a dollar and save that same dollar at the same time?
Obviously, you cannot.
But … you can do the next best thing: stash the amount of money you saved away and save it for a rainy day fund or a special need down the road. Example:
You see an item you’ve had your eyes on but wouldn’t pay regular price of $500. It is on sale now at 25% off. Hence, it only costs $375 now and you buy it. You spent $125 less for the item by waiting until it was on sale.
What you do with the $125 you saved determines how frugal you really are. If the $125 you saved on the purchase remains available to be spent along with your other expenses, that is fine. You successfully delays buying the items until it was on sale. Congratulations!
However, you are only going to experience the benefit of spending less. (definition #1)
If you decide to put away your $125 savings for future use, you will be able to experience the benefit of accumulating cash for future use instead of relying on credit or doing without. (definition #2)
I use a glass jar for this purpose. The photo shown at the top is my “Savings Jar”. If I save $5.50 at the grocery due to discounts, I put that $5.50 into my savings jar. When the money amounts to more than $1,000 in my savings jar, I deposit $1,000 into my co-op savings account.
This is the only way I know to spend less and accumulate savings from purchases over the year.
I would like to hear how you find little additional ways to add to your accumulated savings. When it comes to saving and accumulating money; a little bit often adds up to a lot!