There are two ways we can all grow our bank accounts. The first way is to make more money, the second is to spend less. One of these options is arguably more difficult than the other, whereas the other we can all start practicing right now.
You’re only as rich as the money you have in the bank. Big houses and fancy cars may make someone seem wealthy but remember in the end they just amount to debt. Even investments can evaporate if the stock market tanks. It seems to me that over time certain money saving methods have been developed by people who are smart about money. These habits allow them to spend less, save more, and hopefully live a richer life.
1. Buy Used Clothing
Not only is this a way to save a ton of money it’s also one of the best things you can do for the environment. All my adult life and most of my teenage years I have shopped at thrift stores and most of the new clothing I own was given to me as a gift. I think thrift stores have a reputation of being dirty but if you can get over the stereotype you can save a ton of money. Any time I’m at the mall and I check the price of a tee shirt and it says $10 I’m appalled. I never spend more than $5 for a shirt and about $10 for a pair of pants. There are plenty of thrift stores that have dressing rooms as well so you simply have no excuse.
2. Pay Attention to Sales
When most people hear sale they think of going to a department store or the mall. For the most part going out shopping when theres a sign that says “BIG SALE” is a bad idea. You buy things you don’t really need because they’re a good deal. What I’m referring to in this section is food sales. If you clip the right coupons and pay attention to the times of the year certain items will be sold at the lowest price you can save tons of money. For a few years now I’ve used coupons and paid for my own groceries. You can use websites like TheKrazyCouponLady.com to help you find sale items to match coupons up with. Sometimes you can even get items for free that started at a regular retail price. I will say that this is probably a more elusive way to try to save money because it takes some doing. You have to buy the newspaper or print out coupons from online but if you’re willing to do the planning it pays off.
3. Buy Older Technology
I haven’t heard this talked about much around the financial advice community. Buying older technology is one of the best ways I save money. Every year they release the new iPhone to excited Apple worshipers. They aren’t necessarily releasing a new phone because it’s better, they’re doing it because they always release a new one each year. It keeps consumers buying their products. I must impress on you that it does not make financial sense to buy a new phone every year. Even if you buy one when your two year contract is up you’ll pay hundreds. My advice is to buy a phone one generation older each time they come out with the new iPhone. You can almost always get your new phone for free.
What about things besides phones? I feel the same way about computers and even cars for that matter. The latest and greatest laptop, desktop, tablet or smart watch is going to command a higher price just for the simple fact that it’s new. I usually buy computers refurbished and two years old or so. The newer computer might make you look cool but you’ll be happier to pay half the price.
4. Find Hidden Fees
Finding hidden fees can go for things we all have to pay for, such as health insurance, or luxuries like monthly memberships. Most frugal people are very good at finding those extra expenses hidden in things they have to pay for. For example, one of my friends who I regard as very money smart had asked me if my car insurance covers rental cars. I wasn’t sure about that in fact I had never thought of that. I’m too young to rent a car so having an expense like that which is normally tacked on to car insurance costs me an extra $30 a month. Frugal people aren’t as likely to get caught up in paying monthly for services they don’t use as well. How about that gym membership you thought was a good idea after your New Year’s Resolution? Probably should cancel that if you’re not using it. Maybe you signed up for the Hulu free one month subscription and six months later Hulu is still charging you and you haven’t really noticed. Frugal people are more financially aware, when excessive charges happen they usually notice.
5. Have a Budget/Write Down Expenditures
This factor is the reason most frugal people notice when they’re being nickled and dimed by subscriptions. I think people underestimate how important it is to check your credit card statements and write down everything you spend. I’ve found for myself that just the act of having to write expenses down makes me more accountable for what I spend. I personally use an app called GoodBudget that allows me to record expenses and categorize my budget into envelopes. If i want to know how much I spent on gas last month or even all of last year I can pull up the numbers and the app will show me a chart of my spending. It’ll also tell me if I’m over my allotted spending and what my savings should be based on what I make. If you don’t like inputting things manually I’ve heard good things about an app called Mint. In any case, simply writing down the framework of a budget puts you back in financial reality. As Suze Orman says it you are standing in your financial truth.