Are you looking for ways to cut your spending? With the Covid shutdown, perhaps your income has shut down – or at least slowed down. Now is the time to evaluate your spending habits.
I don’t consider myself a penny-pincher, but the reality is EVERY DOLLAR COUNTS.
Not only that, but people have difficulty understanding saving and the power of compound interest.
By all means, if you can afford an <expensive car, nice house, personal airplane, cool golf cart, etc.> have at it. But for the majority of people in this world, we need to spend more consciously.
In this time of quarantine, I started to think of all the ways I continue to save money. Here are 7 things that I do that may give you some ideas:
Most of the bottled water that is really just glorified tap water. The phenomenon has taken over this country, and experts have argued that buying bottled water is 2000x expensive than drinking from the tap. On average, Americans spend more than $100 a year on bottled water. For the typical family that can easily get up towards a grand.
I won’t elaborate on the history of water, but I am hopeful that people use more reusable containers (for drink refill stations) and migrate to more home filters. Plastic containers not only harm the environment, but the idea of spending a reusable home filter for $50 a year sounds much more reasonable.
Cell phone upgrades
In 2016 my Sprint sales rep advised me regarding a new Galaxy S8, “You are better off renting – you are going to want a new one every two years just like everyone else.” I thought about that sales pitch, but didn’t want to fall into the “herd mentality”. When I returned to pick up my phone the next day, he was bummed to hear that I decided to purchase it instead. I was determined to make it last longer than the “breakeven” date (which was 28 months of owning it).
Here I am nearly 4 years with my Galaxy, and still holding strong. Not falling for the “you need to replace it every two years” pitch, I now enjoy not making the monthly rental payment. Essentially I paid it off in the first two years but no had payments for the last two years. Thus, I am saving $14 a month for the foreseeable future.
Not sure if this can work for women, because we all know their hair “process” might be much more detailed. For men, it should be easier. Just invest in an electric clipper for less than $50.
I have been cutting my own hair for…wait for it…34 years. My father cut my hair until I decided I wanted to take over as a teenager. My hair is admittedly never a perfect cut, but in the same breath…IT’S JUST HAIR. Nonetheless, I estimate I have saved at least $20 a month taking 15 minutes to do it myself.
Without a doubt, coffee plays an important role in our lives (including mine). According to the Specialty Coffee Association of America, one pound of coffee generates roughly 24 cups of a large 12-oz coffee. If the average price of a pound of coffee costs $10, then one large cup will cost you $.42. Or if you are like me and like two big cups, make it $.84 a day. So for $26 a month, I’ve got my coffee fix!
Compare this to the average American who spends anywhere from $100 to $167 a month on java. They are typically buying specialty coffees or frequenting coffee shops. Millennials spend more on coffee than other age groups, and studies show women spend more than men. If you like to treat yourself to that blended frap once a week for $5 from Starbucks, fine. Cut one or two of them out per month, and it will add up.
Eating out (or take-out) gets expensive. We all know that. I can’t think of many places I can go and spend under $10 for an average lunch. This is why saving/eating leftovers is a great way to keep more of what you earn.
For me, I realized that I don’t have to eat everything on my plate. I am full most of the time anyway. So I save some for the following day. Especially when cooking at home we always make a little extra. I love me some leftovers!
I get it: “You can’t win if you don’t play”. Buying a lottery ticket becomes this glimpse of hope into a world of no worries. And we get a rush just checking the numbers, thinking of the possibilities and dreams that might come true.
Truth is – it’s just an illusion. Chances are this will not bring you to the promised land. Even if you win a big jackpot, studies show that money does lead to greater happiness in life. Save the $5 a week (I hope it’s not more than that).
Clothing and apparel
Are you spending more than the average of $1,866 on clothing each year? That comes to $155/month, minimum. I think I spend closer to $155 a year on clothes than $155/month.
Regardless, I think the countless dollars spent on marketing “the latest trends” can be attributed to this. My personal rule is: just buy the essentials. And when I do, I’ll typically wear them until they are stained or ripped. Even then I might still use them – who at the gym cares if I have a permanent stain on my workout shirt?
Implementing some or all of the above ideas can save you hundreds of dollars a month. Think you can manage to carve out just $100 per month and save it? Cool – me too!
Taking it a step further, check out the power of investing those savings over time:
*assumes $1200 annual investing growing at 7% annually
If you have been a little sloppy with your spending habits, it’s not too late. Making a few minor changes now can result in major perks down the road. I implore you to give it a shot.