Interesting discussion.
The most important thing to save money, is to track and limit your spending, and have this limit constant. What does it mean constant? Getting a raise or bonus doesn't mean that you can spend more.
In my household, we are doing home bookkeeping and track every single expense. On the end of every week we check our accounts and wallets to see if all the bookkeeping has no mistakes. That way, we have perfect track on where we spend our money, and how much.
GnuCash is a wonderful software for this purpose with well written documentation. Every month we review our spending and we try to identify places where too much money are going.
The other great thing that we implemented are limits, or budgets. We have set a monthly budget we can spend on food or items like detergents and so on. We call this budget "groceries". Another budget is "pocket money". This is a budget that I and my wife have for buying our own items. We have both our own budgets, and unused money from budget come for another month. We use those budgets to buy own stuff, like books, cinema tickets, and so on. Things like education or bills have no limits, but we track those expenses so nothing gets too big.
This methodology works wonders. Why? Because we have very predictable spending every month. Groceries and pocket money are constant every month. All the money that are left are being transferred to saving account. Just after a first few months we saved very significant amount of money. We are really happy with that system. Maybe we cannot get fun things that we want now, but seeing the growing amount of money on the savings accounts is much better feeling.
Another thing is the right mind set. During my childhood, pretty much until the time I left home, we were living pretty poor. Very often there was barely anything in our fridge, bailiff was threatening us that he will take our apartment, and a bunch of other not-nice things. That taught me a few things. After I got a great job and started living on my own, I had no troubles with those things. How awesome was the feeling that I can go to a supermarket and buy all the things I want. Getting big TV or newest PlayStation. Wow! In comparison to my previous life, that was a total luxury. My key in life is to make those things.... still being a luxury.
People still want more and more. This awesome car one buy now in 5 years can be "old crap". This awesome and big 60m² apartment can be a tiny prison after a few raises. My goal in life is never to think that way. I love my 60m² apartment. I love my 250€ bicycle. I love my 200€ tablet and 300€ laptop. Surely I could move to a bigger place, get professional bicycle or high-end electronic hardware. I can afford that. But I am happy with the things I have. When I bought those things, they were awesome. And I want to keep it that way.
And by the way... "young person's temptation to spend all the money you have". Use of "young" in this sentence is very right. Older people have temptation to spend *more* money than they have
My friend bought a luxury car a few months ago, with borrowed from bank money. The car looks much nicer than their small house. They do not have such money, but they bought the car anyway.
PS: Does this post gives me a chance to win the book, or do I have to create a new topic? I want this book
badly