ALBANY, CA - MAY 15: Customers shop at a Target store May 15, 2006 in Albany, California. Target announced a 12 percent rise in profit in its quarterly earnings report, falling short of market expectations. Target stock closed at $50.02, down $2.19. (Photo by Justin Sullivan/Getty Images)

Money is nothing more than a tool. It can be used against you, or it can be used to better your life. As a former, “Will Work for Food” sign holder in Southern California I learned that money might not always be there, and it was up to me to do something to make sure it always was there.

Not Homeless But…

I guess I couldn’t consider myself homeless since I was living on the street in my car. I did odd jobs and panhandled to get enough gas money to go on job interviews. Not having a phone or physical address was a small problem so I had to park near a phone booth (they had those all over in the 80s). I just told people that I had just moved and the phone hadn’t been installed yet. I would get a time to call them back.

How to Start Saving Money

After finding a job I knew that I was going to need some emergency money in addition to my new paycheck. I was going to need a first and last deposit if I expected to rent an apartment at some point. I was currently living with drug dealers and hookers in a $5.00 a night flophouse hotel with no lock on the door.

I began by opening a bank and savings account and put 1% of my barely more than minimum wage in that savings account. Over time I increased it to 3%. My goal was to save at least 10 percent, but no matter what, I had to put at least 1 percent of every paycheck in savings.

Daily Savings

As I drive around Bozeman I see lines of cars at coffee kiosks and the restaurants are usually full around lunchtime. Even people making a decent salary can’t save much spending $3-$5.00 a day on coffee and $8-$10 with tip for a lunch. I can save $35 dollars a week ($1,820/yr.) by brown bagging it and bringing my own home brewed coffee. That’s a one month mortgage payment for many people.

Saving At Work

Take advantage of your 401(k) or retirement plan at work. You can direct a certain percentage of your pay to go to the retirement plan and your company will usually match that amount. That’s a 100% return on your money. I don’t know of anywhere else you can get a deal like that.

The other great benefit is, you don’t pay taxes on that money until you take it out of the plan at age 59 ½. This is just one example where money is a tool. Put it to work for you.

Other Savings

The average car payment in the US today is over $500.00 a month. That’s ridiculous. Buy the most reliable used car you can afford and invest that $500 a month anywhere you can get 1 percent or more on the money.

Five hundred dollars a month is $6,000 a year. If you are under 65 you can invest $5,000 of that money in a Roth IRA and the money plus the interest it generates comes out tax-free. If you’re over 65 you can invest $6,000 each per year for both you and your wife in two separate Roth IRA’s.

Some Final Thoughts

What’s your behavior when gas prices go up? You consolidate trips or drive less to save money. You adjust your lifestyle; not destroy it by wasting gas.

What if there was a place that would give you $20 for each dollar you gave them? Would you want to know where it is? That’s what investing is designed to do.

Every credit card, bill, car payment, etc. that you can retire is the same as getting a raise in pay. If you spend $100 on groceries could you spend $90 without being deprived? I think most of us could.

Saving is sacrifice but it’s not forever. If you will be disciplined enough to live for a short period of time like most people won’t; you can live the rest of your life like most people can’t. Start today, what’s one percent of your paycheck?