21 Money Savings Tips
Dan Loose, MBA, CFP®
Improving your cash flow is the first step to becoming financially independent. Here are 21 money savings tips you can implement right away:
- Dream big in a meeting with a Certified Financial Planner® who works by the hour. This may seem like an odd way to save but spending a couple hundred dollars with a financial expert who is an unbiased third party with no commissionable product to sell you may be the best spent money of your life. Share those big, audacious, out-of-this-world, dreamy goals with someone who can quantify what you would need to do to make it come to fruition. And do it now. Life is actually very short and goals, like all good plans, require time to execute.
- Before even asking you to build a budget, simply track your expenses for a month. Based upon that information, you will begin to see areas where you could slow the outflow of money. Over time you will need to create and begin following a personal budget to reach those audacious goals set in tip one above. See our previous post, Why Financial Planning Requires a Level of Sacrifice
- Dump debt. Eliminate all interest to the bank by paying off all non-mortgage debt using the debt snowball.
- Eliminate credit card debt and vow to never use credit cards again. Studies show you can save 15% to 20% immediately by buying with cash.
- Refinance your home while we have these historically low rates.
- Dump Whole Life Insurance. Get quotes for Term Life Insurance instead. Once insured, dump the Whole Life Insurance and invest the premium savings.
- Stop eating/drinking out. Take a lunch. Take a reusable coffee cup or drinking receptacle with your favorite beverage from home. Learn to drink normal tap water in place of sugar-filled soda.
- Build a monthly menu for home cooked meals and build a weekly shopping list from the menu.
- Only go shopping with a shopping List. Take a picture of the number on your scale or an unflattering picture of yourself and tape it to the top of your shopping list. Then, buy only those items on the list. If you get tempted to buy something else, look at the photo.
- Wait one day before buying anything more expensive than $100. Also get permission from your spouse/parent/financial accountability partner. For example, you see a tool for $200, wait two days before buying it and ask the wife if you should buy it. You see a great dress for $500, wait 5 days before buying it and ask the husband if you should buy it. For mega items, like a car, wait a month.
- Only buy quality, used cars, and only after getting a mechanical inspection by an independent garage. Never buy new. Let someone else pay for the massive depreciation vehicles have in the first couple of years. Be mindful that your general financial focus in life should be on acquiring appreciating assets, not depreciating assets.
- Find a couple of quality 2nd hand shops. My wife found a clothing second hand shop that she loves that carries nicer clothing than you can find in most department stores.
- Cancel subscriptions, starting with cable TV. Rent videos, check out books, read magazines, newspapers from the public library. Use it; you are paying taxes to fund it.
- Reduce your cell phone bill by eliminating additional subscribers from your plan and/or additional extras, insurance, warranties. Look into alternative providers. Never buy the newest phone on the market.
- Install a programmable thermostat in your home AND further reduce your energy by adding 3 degrees to the A/C set point and subtracting 3 degrees from the heating set point. Clean your furnace filter while you are at it.
- Unsubscribe from emails from your favorite stores that tempt you with “special sales.”
- Shop for automobile, home, boat, etc. insurance every two or three years.
- Try generic brands.
- Volunteer at the local Rescue Mission or Salvation Army. That’ll put your “poverty” into perspective.
- Declutter your life and make some money by selling that stuff in your garage/basement you haven’t used in a decade. Give it to charity. A giving hand is an open hand that is prepared to receive in other ways.
- Seriously consider how you can live in a more sustainable, environmentally-conscious, “planned” sort of way. Think about ways of giving back. Volunteer to help kids learn a skill you have in your local Boy Scout or Girl Scout Troop. Volunteer at your church or synagogue. Volunteer by reading to kids at the local elementary school. Visit the shut ins and lonely in the local care center or nursing home. Pound nails on a weekend with Habitat for Humanity. Attempt to lead a life that leaves the planet better of than when you arrived.