Money. We all want it, we all need it, but sometimes it just seems like we just can’t get enough of it. The simple fact is, saving money is hard. But it is doable! Especially by implementing the following 5 tips and tricks.
So without further ado. Let’s save on!
Tip 1: Focus on the “Big Rocks”
Too often in personal finance, people focus on saving a mere $2 on a latte or $10 a week by depriving themselves of their scotch and cigar night without realizing that you don’t get ahead by saving pennies if you are bleeding dollars. Want to know how to save money? Focus on the big rocks! We aren’t talking saving a few hundred a year, but a few thousand!
You can save tens of thousands over the years by negotiating a lower interest rate on your mortgage (or better yet, according to James Altucher, don’t buy a house at all). You can save hundreds of thousands of dollars, and a lifetime of stress by working your way through college instead of accruing student loans.
Want to save real money? Pay cash for your car instead of getting loans to cover a $30,000 car that you don’t need. Stop focusing on small things and saying that you are being financially responsible. Real financial responsibility is saving $20,000 on your house by having good credit. Then you can enjoy all the coffee, expensive dinners, cigars, and booze that you want without having to feel guilty.
Tip 2: Be a Bargain Hunter
You can save tens of thousands over the years by negotiating a lower interest rate on your student loans, mortgage, or car note. You can save tens of thousands of dollars over the lifetime of these loans.
For example, in the U.S. you can save hundreds each month on groceries by shopping at Sam’s Club or Costco and paying a $55/year fee. You can save potentially hundreds more on products from Amazon by using Amazon’s $100/year prime service which offers free shipping and discounts on numerous items. Also, look for Amazon coupons at a coupon site like Coupon Sherpa.
And, if you have the patience for it, you can save tons by using services like VoucherBin UK, or other coupon and rewards programs. Also, be sure to keep an eye out for blowout and closing sales. You can get $200 electronics for less than $50 (and if you are smart and have a good eBay account, you can turn around and sell those same electronics and start turning a profit with a nifty side gig)
Tip 3: Beat the Credit Card Companies at Their Own Game
Credit cards are one of the sharpest double-edged swords in the finance world. If used properly, you can get free flights, product insurance, and epic prizes just for buying things you already need. However, if used irresponsibly, credit cards will send you into a downward financial spiral that can be hard to pull out of.
The key is to use credit cards for everything, but treat them like debit cards. Meaning that even though you use your Amex or Discover card to get points or miles on each purchase you NEVER spend money that you don’t have and always pay off your debt in full at the end of each month.
If you are unfamiliar with credit and credit cards or how to use them responsibly, be sure that you do your research and learn about credit scores and reports and how you can maximize yours. A great place to start is either Ramit Sethi’s “I Will Teach You to be Rich” or Tony Robbins “Money Master the Game“
Tip 4: Make Savings Automatic
If you have the option with your employer or bank, set up your accounts so that 10-50% (yes that’s right 50%) of your income goes directly into your savings account before you have the chance to touch it. Ideally, you want to ensure that your savings and checking accounts are through different banks so that it is difficult to transfer between them to use your hard saved cash.
If you don’t have a savings account, consider opening an online account with Charles Schwab or Capital One (we are not affiliated in any way, this is just what has worked for us) that has a high-interest yield each month and offers no fee, no minimum accounts.
Tip 5: Give More to Get More
While this might seem a little oxymoronic to talk about giving money away in the same breath as we talk about saving it, giving your money away to those less fortunate than you is actually one of the quickest ways to increase your income and savings.
Check out this podcast with Tony Robbins where he states that he has “Never met someone who gave away 10% of their income that was not financially wealthy within a decade”.
Giving away money reprograms your brain to believe that you have more than enough money and are financially in abundance. After all, if you are giving your money away, then how the hell could you be broke? Many of you may not like this piece of advice and will likely discard it.
But I would challenge you not to. I have been giving 10% of my income for years, and I have been financially blessed beyond what I could have imagined. It might sound woo-woo, but nearly every time I have sat down and filled out an online giving form thinking “Crap can I really afford to give that?” after I gave them money, I ALWAYS had an opportunity within the same day, week, or month to make it back often two or three-fold.
So there you have it. While these certainly shouldn’t be revolutionary tips, ask yourself “Am I actively putting this into practice?” If not then it’s time to start.
To your financial success!