Five Ways to Save Money Today!
So you made the decision that you need to get your finances in line; congratulations! Looking for money saving tips to help you expedite your journey? You came to the right place!
Whether or not we are trying to get out of debt, or increase our savings potential, there are only two ways to be left with more cash at the end of our bills: spend less, or make more.
The path to making more money is perhaps the most desired however, do not expect there to be any tips to “get rich quick” here. In fact, if you ever find yourself reading an article with the promise of quick money, turn the other way, you are about to pay someone for a bag of lies.
The way you earn more money is by providing a greater quality of service than which you are currently providing. This could be by doubling down at your current job with the goal of seeking a promotion, or it could be the taking on of a second job to supplement your primary income. Either way, you will be putting in significant effort.
Money comes from work, plain and simple!
The only issue with the quest to increase income comes in the believe that your new increase in pay will somehow enable you to out-earn your stupidity. If you increase your income and do not change your spending habits, you will always find yourself dancing on the line of financial irresponsibility.
While both ways are viable options, the decision to spend less is a very accessible option for most. It is a quick decision that you can put in place today and witness measurable changes in a very short period of time.
Here are five quick ways that you can cut spending today!
Cut the cable
Look, I get it, I love watching House Hunters just as much as the next person. There is nothing like hearing how the husband, who is a part time gopher herder, and the wife, who tunes harmonicas on Mondays and Thursdays, have a budget of $1.3 million for their second vacation home!
Today, the average American spends $103/month on their cable bill. That is up 39% from 2011, more than eight times the rate of inflation!
Cutting $103 out of your monthly budget sure adds up quick, somewhere to the effect of $1,236/year to be precise. Just to put that into context, if you were to invest $103/month for 20 years, and earn average rates of return, it would compound into $99,743!
The reason I put cable first is because it’s a two for one. You not only reap the financial benefit from cutting cable but by turning off the TV you will prevent yourself from filling your valuable time with irrelevant distractions. Time that could be much better spent on learning a new skill, or reading a book about a different point of view, or heaven forbid, spending time and interacting with actual people!
Still want the connectivity without the huge price? Try alternative streaming services such as:
These services offer you more catered service at a fraction of the price!
Become your own barista
I love coffee. I can certainly manage my day without it but why bring that kind of negativity into my life, and into the life of others for that matter! Here’s the thing, that daily trip to your favorite coffee shop is burning a hole right through your pocket.
The average consumer, who makes a daily visits to Starbuck’s, spends $4.75/day, five days a week. That’s $102.92/month or $1,235/year, on coffee!
How much cheaper is it to brew your own cup-o-joe? Well on average, those who chose to brew in home spend approximately $0.18/cup, or $4.57 less than those who purchase from the ever popular coffee shop on the corner, and the next corner, and the next corner and so on…
“But Gunny, I get my coffee at McDonald’s, or Dunkin or {insert your bargain coffee house name here} and I only spend $1.50/cup.” You’re right, you can get cheaper coffee at those places, but I assure you, that inexpensive coffee serves but one purpose, to lure you into impulse purchase other items. Not true you say? If you can tell me the last time you got a McDonald’s coffee without getting at least one item off the breakfast menu I will be dumbfounded. I can’t even drive past a McDonald’s at breakfast time without the enticing smell of hash browns luring me in!
Oh yea, had you invested that $4.57/day difference over 20 years, you would be looking at $95,870!
Dining out
Eating at your favorite restaurant can be a real treat; the food, the atmosphere, the knowing that someone else will prepare your meal for you and then clean everything up as well, sublime!
There is nothing wrong with dining out, however it seems that, for the average American, dining out is becoming the norm rather than the luxury that it is.
Americans spend, on average, $257/month on food prepared outside of the home, while they spend approximately $300/month (per person) on groceries.
While the convenience of dining out is acknowledged, it is hitting your pockets to the tune of $3,084/year. That’s $248,874 for that 20 year investment example from before!
In reality, the actual cost of eating out is much greater when you figure in the types of food we are eating when we chose to dine out. Eating home cooked meals is not only the more cost effective choice but it can be significantly more healthy for you… which again influences cost as your healthy lifestyle will likely lead to less frequent unexpected trips to the doctor’s office and lower health insurance premiums!
Don’t give a drunk a drink!
We can all agree that it would be rather foolish for a person who is looking to quit drinking to hang out at the local liquor store, perusing through the shelves for good deals; even the strongest willed would be tempted to make a purchase. Then why would a person who is trying to get out of debt chose to spend their free time window shopping at the local mall?
“But I’m just going to walk through and kill time, I’m not actually going to buy anything!”
I have a pair of friends named Psychology and Statistics who strongly disagree with you!
The amount of time and money that organizations spend on the mass gathering of consumer habits, and the in depth study and statistical analysis of consumer behavior is truly remarkable; they quite literally know you better than you know yourself.
You want an example? Well how about this - A few years after Nelli and I had been married we had just began the pre-discussions of “do you think we are ready to have a kid?” We likely hopped on the internet and searched for the things that every new parent would search for; the how tos, the products and so on.
Within a very short period of time, Target had sent us an enormous catalogue of coupons for our “little one on the way.” It came with a welcome note and a plethora of information for “the new parents!’ Later that week Nelli and I ventured out and timidly purchased a pregnancy test; it was positive.
Based upon our shopping habits, Target had quite literally figured out that we were pregnant before we had known!
The construct of a shopping center is quite simple, get the consumer inside. Once they get you inside, their mastery of understanding human psychology and behavior will take over! From the specific colors used in the lighting, to the placement of display shelves, to the centralized location of the food court that ensures you must walk by as many stores as possible before getting there, as well as ensuring even distribution of the mouth watering smells across the mall’s interior, all of this is done with one thing in mind; keeping you comfortable and inside as long as possible to maximize the amount you will spend.
Oh and by the way, on average, every time a shopper walks into a mall they spend $105.11 whether they anticipated on spending anything or just wandering around. That’s how good the design of these places are! The average American spends $3,910/year on purchase at malls and shopping centers ($315,693 for our 20 year investment example!)
This example is applicable with more than just window shopping at your brick an mortar stores, online window shopping is just as bad if not worse. Often times we are forced to set up an account with the company “to make our check out process more convenient!” As if shopping with a piece of plastic wasn’t dangerous enough, just think about how painless it is to spend money when all it takes is the click of a button!
30 Day Rule
More than 90% of consumers have admitted to making an impulse purchase on an item that they had absolutely no intention to purchase before they left their home, or hoped on the computer.
There are complicated statistical equations that show how the amount one is willing to spend on an impulse is tied to that person’s perception of discretionary money however these same statistics show that on average, American’s spend more than $110,000 on impulse expenses throughout their life.
Heck, Nelli a I impulse purchased a Camaro back when we were normal! (Click here to catch up with our Being Normal Series!)
In a recent survey conducted by Invesp, more than 54% of people admitted to making impulse purchases totaling more than $100, while just over 20% admitted to making impulse purchases over the $1,000 mark!
The 30 day rule is amazingly simple in theory however, it is the ultimate exercise in patience. For any non essential purchase, anything you can live without, wait 30 days from the time you decide to make the purchase until the time you actually make the purchase.
I know, I know, in this society where we crave instant gratification this may be a hard pill to swallow, but trust me, this one is worth it.
By doing this you will benefit in two separate ways. As you wait over the next 30 days you will really begin to ask yourself the question you should have asked before you were about to impulse buy it in the first place, “do I really need this?” I want you to spend 30 days to think about it. Why do you need it? Why do you want it? How was it that you were able to live without this for all this time? How will this purchase change the way you do XYZ… and most importantly, if you’re married, talk it over with your spouse!
Secondly, during your 30 day cool down period, do as much research as you can on the product. I want your home office to look like you’re some sort of genius savant, with comparative analysis’ plastered to the walls, with strings connecting multiple ideas to one another!
Do as much research as you can! How does it stack up against other makes, models? Is the current price a good price or does this item go on sale? Is there perhaps a slightly more expensive version of this particular model who’s increased price comes with a significantly better build quality that translates into a longer lasting product? Realistically you should become so familiar with this item that you could be the next spokesperson for the company!
Now do I mean you should do this for every purchase, no, certainly not. If you are out of debt, have your emergency funds in place, and are already investing towards retirement there is nothing wrong with building in discretionary money into your budget. You do however
need to determine, with your spouse if you’re married, a set monetary value that if you are about to exceed, goes through this 30 day cool-down period. It could be $500, could be $100, it could even be $50, but whatever you, and your spouse agree upon becomes gospel!
Conclusion
Look, the whole purpose of this is to be intentional with your money. We all have a limited amount of resources at our disposal, some more than others, and every time we walk out the door, or pick up that i-Device, some company is reaching out to grab our attention with the hopes that it will lead to our spending money.
We are all at different points on our financial journey however, the tips listed here are ones that are applicable at any stage. Millionaires did not become rich by spending like crazy after they made their first $500k, they became rich because they consistently lived within their means for a prolonged period of time.
Each and every one of you can become very, very wealthy if you do the unthinkable; pay yourself vice pad the pockets of someone else!
Once you find your “why” all it takes is for you to make a series of incremental changes and over time they will compound into huge levels of success! Click here to read my article on The Power of Finding YOUR Why!
This is what Nelli and I did, I assure you that you can too!
