Stop Spending SO Much! Idiot! (Part One)
People love to blow all their money! I recently found out that when gas prices drop, Many people run out and buy bigger cars like trucks and such, So the price of everything else goes down.
WHAT?
Why not enjoy that extra money you are saving on gas and put it into savings?
I guess it's none of my business what you do with your money, But for those of you looking to grow your savings, I have some awesome tips.
I recently read that people spend the most money on three things in their lives.
- A place to live
- Food
- Transportation.
There are so many ways to cut these things back!
The most expensive, Also the least flexible is probably your home. That can be hard to save money on.
Here are some things you can do
- Rent out your apartment or home, While you're away, Or if you have extra rooms.
- Consider having a part time job with your renter. Sometimes they'll waive your rent or reduce it.
Going out to eat!
While it's fun, And delicious going out to eat costs a lot of money over time.
Reducing how much you eat, And what you eat, Can dramatically improve your spending.
Try buying those meal containers, Cook ahead and freeze food for later use.
Only buy what you'll eat. And reduce the amount of going out to eat you do. This will help!
Avoid Alcohol!
I used to love to drink After I turned 21. I wanted to take advantage of my new power...
The fact I could buy my alcohol. I started seeing how expensive it was! Then I went to the bar one day, Had a few drinks with my meal, And was horrified by the prices.
Now I see why many people who frequent the bars on weekends are often broke. Even a couple drinks can add up super quickly. Not only that but you waste time being "hung over" when you could be more productive. Having the occasional beer once in a while, Won't break the bank. But if you do it often, It may be time to pick up a better hobby.
Avoid Interest
Some people baffle me. They run out and get a mortgage, and they continue to pay the bare minimum WHAT!?
You do realize they are charging interest on you!?
They do the same thing with student loans and other credit card debt.
When I got my first card at 18, I started laughing when they told me I only had to pay "35.00" a month. What?? I immediately paid the whole thing off on my next check. I borrowed 4,000 in student loans... I paid 0.01 in interest Because I was throwing my every paycheck at the balance. Eating cheap meals to avoid spending.
Many people don't realize how much interest adds up. Banks have a lot of money for a reason. If you can't control yourself, It might be best to avoid loans completely.
If you have to take out a loan, Do the math and figure out what is most cost effective. Then try and get am emergency savings account for next time.
Continued On the next post....
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Very good article. And I hear you. I made a number of these mistakes in the past. Credit cards, car loans, and high interest rates should all be avoided. (In addition to centralized banks)
Many years ago, I couldn't understand how bankers expected people to have a big percentage of someone's income to be disposable income. So, if 100% of your income went for housing, auto payments / insurance, food and necessities, not even eating out or hitting bars.
Basically, paycheck to paycheck and being responsible to pay expenses and debts. On top of being responsible, the banks want 20% to 25% to go to savings. As a young 20-something, who had that much extra money. I did not then.
Now, I understand the bankers position. Having 20% disposable cash gives very good cash flow, extra payments to pay down debt rather than minimum payments. Now, when I read your posts, I know that you are passing on the wisdom that took me a long time to gain.
Your messages are great.
Yeah drinking is expensive. Would go to wild wings with friend in college and watch them wrack up $100 tabs in shots, car bombs, and beer. My jaw dropped every time.
I am guilty as charged! I love eating out and i spend too much money for that! But there is so many yummy restaurants out there :O But i never drink alcohol though, Only once in a while :)
@kaylinart great piece! there seem to be a lot of trade-offs these days. i like the suggestion about trading rent for a part-time job. i believe there is a start-up that does this exact thing!
Thank you ! There is! Wait really? A Start up? wow.
@kaylinart, yup its called nesterly out of mit
https://www.citylab.com/life/2017/07/nesterly-boomer-millennial-roommates-college-towns/531687/
Very good tips. I know the eating out for me is a big one. I've done a better job of that over the past year as I switched my diet and cooked more at home but it's still a big wasted expense. Cutting your expenses is probably the fastest and easiest way to increase your paycheck. Thank you for the article.
Wow I'm glad you have made changes. It's crazy how even when you cut back, Any spending adds up fast.
Ok, If i wouldn't take a loan, where can I get 500k for buying a house?
Save! Or buy something smaller!
I understand this may be something that many people end up doing. But if you can, Try and pay extra each month on your mortgage to save money in the long run on the interest costs.
Save: I need to live somewhere now. Rental apartment costs 1800-2000 in my city. Every month payment for a home including percents cost 1600-1800.
Looking on this numbers I always consider paying home payments is CHEAPER than to rent something.
Did you ever buy a home? I'm just curious if you ever looked on mortgage and rental payments before suggesting others do not take a mortgage loan?
I would suggest to pay extra every month for a home loan ONLY if mortgage contract doesn't have any penalty for AND if you would buy a home on a low market.
For current estate market - when it's too high - I would never suggest to pay any extra cents, because if market gows down (actually not "if" but "when"), so, when a market goes down it would not have any sense to buy/pay a bank 600k plus percents for a home which costs now 300k. If this situation a smart home buyer should make a short sale (or return his bank his property) and buy another home better and much cheaper on a market buttom. If you would pay extra for a home which was bought on a high market you would just gift your loan bank some extra money for nothing.
Also, the truth is no one lives in the same home for 30 years (loan time life) so everyone should consider market fluctuations and his possible life events like new kids/works/divorces/marriages for that time period BEFORE buying a house
Until interest rates rise. Or you have to fix the roof.
have you ever signed any mortgage documents? from where did you get an idea about raised percents for mortgage AFTER signing a document with says 3.25% for 30 years?
For a roof specifically, I have a roof insurance which cost 250$ for 2 years. and they fix any problems roof free. beside to roof insurance, there is a usual home insurance which covers a roof too.
and on top of this: buying a home on a market's bottom and then selling with higher price could bring you a lot of money. Why don't you consider this fact?
You might consider moving to a cheaper neighborhood.
I don't understand how it would help - if I have 0 money, how buying a home in a cheaper place could keep me from a loan?
I loved the part 2 so much I had to check out part one :)
Love what you say about food. Cooking at home from scratch and you will save more than you can imagine. Buying certain staples (dried goods n such) in bulk is a great savings also. When I have an extra couple hundred dollars I will buy bulk rice, quinoa, spices and such this way all i need daily/weekly is fresh stuff. Of course you need to know how to cook lol. I just bought groceries for the first time in 3-4 weeks and only spent $35. I won't need to go back for another few weeks. My son and I do juicing and smoothies a lot also. We don't skimp when it comes to eating.
The nice thing is, if I want to visit a nice restaurant I will usually have the money to do so since I save so much regularly.
You are so right about the alchohol also. Expensive and seriously eats up your productivity. All around it's a real liability if you want to get ahead.
People say to live within your means. If you really want to get ahead you should live below your means. As far below as you are comfortable with. To onlookers you may look poor but it will allow you to really focus your finances in a way that will put you so far ahead in future years they will be left in the dust.
College loans have royally screwed me. I was too young to know any better.
I hear what your saying about avoiding alcohol. seems like everytime I drink, I wake up with ahngover and all my money is gone. And the part about food is very true too. Why waste so much money on food that you dont really need anyhow. We overeat (especially as Americans) and then wonder why we are fat, lazy, dont have money, and can't find a girlfriend or boyfriend. And good point about over spending on rent. Why not just live in an efficiency and use your computer to make money online with steemit and crypto trading?