I occasionally like to visit websites that encourage saving money.  In particular, I enjoy visiting ones that encourage ultra saving, perhaps on the verge of being compulsive.  Two such websites are as follows:

http://www.mrmoneymustache.com/

http://www.thepennyhoarder.com/

I find them fascinating, perhaps because I know it is not realistic for me.  It is not realistic for most people, especially those with a spouse and children.  You pretty much have to get the whole family on board or it isn’t going to work.  You will just end up getting frustrated.

Personally, I don’t really like compulsive saving, but I do occasionally get some good tips from these websites.  I strongly encourage people to save money and live below their means, but I also don’t think you should make yourself miserable in the process.

I know the $5 cup of coffee is often used as an example of cutting expenses, whether or not it is symbolic.  You can probably get a cup of coffee for cheaper, but that is beside the point.  If you really enjoy your $5 cup of coffee and it makes your day, then I don’t think you should cut it out of your life and deprive yourself, unless you are really in a tough situation financially.

Saving five dollars a day isn’t going to make you rich.  Even if you find four or five little things to cut out of your life, it probably isn’t going to make much of a difference.  You will probably get frustrated because you are depriving yourself of little life pleasures while not seeing much progress on the savings front.

In terms of saving money, you should really look at the big things.  This would include car payments, rent/ mortgage, and perhaps your biggest or most expensive pleasures.

If you really like boating, maybe you can find an alternative to owning a $30,000 boat.  Maybe you can join a boat club or share one with others.

There are people who will pay $600 per month for a car payment, yet they feel forced to pack a lunch every day.  It is fine if you like to pack a lunch and you really love your car.  But I find that this isn’t usually the case.

The other important point is that sometimes you just have to find a way to make more money.  If you are stressing over a $5 cup of coffee, you really need to either check your spending or your income or both.

If you are making six figures and you don’t live in a really expensive city, then you should be saving money.  It is more of a spending problem than an income problem.  But I find that many people feel locked in to their income and never explore other options.

If you are making $40,000 per year, you will probably never be rich.  You can try to save, but you aren’t going to get very far.  You may just have to look at finding ways of making more money.  This could include finding a better job, finding a second job, starting a side business, or doing some extra consulting work.

While I often write about investments and wealth protection, this advice isn’t going to do you much good if you don’t have much of anything to protect.  At some point, you have to make more money than you spend.  You may have to be creative and find ways to make more and spend less.  The key is to figure out which area you can get the biggest bang for your buck.