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My Saving Strategies

I have been asked by one of our readers to post about some of our saving strategies. My wife and I are fairly frugal, but not super frugal like some people I read about on the Internet. We take a common sense approach to spending where we try and divide our needs and wants. As I mentioned before, the strategy to “Pay Yourself First” has worked really well for us. We take a portion of our paychecks and put them away in savings. The rest of the money is used to pay bills and a small amount for discretionary spending.

Now, lets play a game and see how frugal you are compared to us:

Compare your answers with mine:

1. Do you NEED to go the theatres to watch the latest blockbuster? Or can you wait until it comes out on DVD to rent?

  • My wife really enjoys the cinemas but we have disciplined ourselves to only go once every few months (or longer). We rent movies most of the time.

2. Do you NEED to go out for supper at a fancy restaurant? Or can you cook your supper at home?

  • We go out to eat on special occasions [more often if someone else is paying ;)], however, most of the time we just cook at home. Cooking at home is cheaper (usually healthier too) than eating out at any restaurant, even Macdonalds.

3. Do you NEED to go out for lunch? Or can you brownbag your lunch?

  • We always pack our lunch for work. It’s “easier” to go out and pick up something quick but usually more costly.

4. Do you NEED to buy a coffee at a coffee shop? Or can you perk your own at home?

  • Say you buy $1.50 coffee every single day of the year (that’s not including the muffins!), that’s almost $550/year that you are spending on something that you don’t NEED! That money could be used towards your car payment, rent, or investing.

5. Do you NEED to smoke cigarettes? Or can you quit?

  • Here in Canada, cigarettes cost around $10/pack. The average smoker probably smokes approximately 1 pack/day which equates to $300/month. If you were to take the cigarette money and invest it annually in a tax free retirement account growing at 8%, you’d have $274 452 in 25 years. Wouldn’t that be a nice addition to your retirement funds.

6. Do you NEED to party every weekend? Or can you hang out with your friends and cut back on the booze?

  • Booze can be fun but it IS expensive. Cutting back on your booze intake is not only good for your liver but good for your wallet also.

7. Do you NEED a new car every 3 years? Or can you get by with a reliable used car (with cheaper insurance)?

  • This one is the kicker, no one NEEDS a new car every 3-4 years whether it’s leasing or buying. We made the mistake of buying a brand new car upon graduation which came with a big car loan. Never again. Did you know that new cars depreciate 15%-20% as soon as you drive it off the lot? If you NEED a car (some cities have poor public transportation), then buy a reliable used Honda or Toyota around 3-4 years old and drive it to the ground. That’s what we plan on doing with our cars.

8. Do you NEED the full digital cable package? Or can you get by with basic cable?

  • Although there are a lot of great channels in the digital cable package, we stick with the basic cable. It saves us around $40/month and all the TV programs that we care to watch.

There you have it. That’s just a few examples on how you can shave a few dollars off your monthly bills. Remember, $1 dollar saved is $1.50 dollars earned (after accounting for taxes)! If you have some more ideas, please feel free to add them to the comments.

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FrugalTrader About the author: FrugalTrader is the founder and editor of Million Dollar Journey (est. 2006). Through various financial strategies outlined on this site, he grew his net worth from $200,000 in 2006 to $1,000,000 by 2014. You can read more about him here.

{ 5 comments… add one }

  • Brian W March 23, 2012, 12:10 pm

    On the topic of cars: With 1.5 years to go until we paid off our car loan (which featured a 5.9% financing rate–ridiculous by today’s standards), we had some borrowing room left on our PC borrowing account (line of credit), which had a rate of 4.25%. So, we paid off the balance of our car loan with our line of credit account, and enjoyed a lower financing rate.

    In addition, this helped our credit because our car loan was now shown as “paid in full.”

  • Deny D. Ritz | Building Wealth Tips August 15, 2012, 10:42 pm

    Hi FrugalTrader,

    Thanks for the tips on real life money saving. I hope you and your wife are on your way to good wealth (if not already!).

    I agree about going out to the cinema. Another advantage when we cut back on going out to watch movies is that we can use the time to do something else more productive (like reading how to save money tips).

    Your tip about buying a used Honda or Toyota is great too, as I’ve been driving the same Toyota for more than 15 years now! It’s starting to show some age (and it has scratches all over the place), but my friends say it still runs smooth.

    As long as it still works, no NEED to change anything, right?

    Cheers!

  • Gary January 1, 2013, 5:18 pm

    Your saving strategies really hit home with alot of us. It’s amazing how much money we spend every day on things we really don’t need. I myself cancelled our $78/month cable and now use netflix for $8/month. I also got rid of my $80/month cell phone and went with tracphone for $200/year.

  • Scott October 29, 2014, 12:43 pm

    I know this post is super old, but regarding cable: If you have internet (who doesn’t?) check out broadcasters websites!
    watch.ctv.ca
    cbc.ca/video
    watch.discoverychannel.ca
    http://www.citytv.com/video
    and many others! (even Space and Spike have some content)
    That covers 90%+ of my favorite shows, is legal, is free (if you have internet and a computer already), and is more than enough TV.

    As a backup, buy or build an antenna (many guides online) and get free HDTV for ctv, cbc, global, city, and a few more depending on your region.

  • Stev December 17, 2014, 2:49 pm

    Save $3000 / year by doing this….easy!

    I live in GTA and believe our country needs to focus not on THE ECONOMY, but financial independence. Here are my lessons learned as a frugal citizen who lives a very comfortable, debt free life, mainly by not buying into overconsumption and wasteful attitudes.

    Here are my top tips that will save you at least $3000 next year:

    a) CUT CABLE: I live near Hamilton and bought $50 HDTV antenna ( +amp), put in attic and get 25 HI DEF Channels FREE!!! Savings: $700/yr ( which can pay for a new HDTV and DVR BTW)
    Bonus Tip: Buy a Channelmaster DVR+ and you can record your hd TV and skip commercials. Best purchase I’ve made in a while.

    Story: I was watching a news story on a poor family that could barely put food on the table, but they were paying for Cable TV. Amazed to see lack of priorities…especially since TV is Free with an antenna. $500 could help them!

    b) Cheaper Internet: Teksavvy, Electonic Box and others provide reseller DSL/CABLE internet cheaper. They still use the Bell/ Cable company network FYI Savings: $200/yr

    c) VOIP for home phone service. I bought $40 OBIHAI device ( one time purchase) and pay $30/YEAR for phone service and get 40 free features! ITS MY TOP RECOMMENDATION. Long distance is 2cents/min Savings vs Bell: $800/year

    d) Buy on Black Friday./Cyber Monday ONLINE for tech deals. US stores are best deals so pickup in Buffalo or send to friend in US if you can.

    Consider this: My thinking is its better for the Canadian Economy to buy SAME PRODUCT in US.
    REasoning is …a Computer here is $800, same one in US is $600 saving you $200 that you can spend in your local businesses. Same TV, but their execs don’t get your $200…your local store or charity does!

    e) Price Match is your friend. Get your flyers and bring with you when shopping ( even groceries). They will price match so you dont have to drive store to store.

    f) Electricity: Time savings SmartMeters is great in my opinion. Set your timers, do your laundry, wash dishes etc when power is cheapest. We cut our hydro bill doing this. Savings : $300

    g) Buying a house? Buy near the workplace of at least ONE OF THE ADULTS IN FAMILY. Not only saving you fuel, but time, able to get home in case of emergencies, prepare dinner etc. Less stress…priceless!

    h) Are you a daily commuter? BUY AN ELECTRIC CAR.
    Every two car family should have 1 EV in my opinion, as 99% of your driving is within range. A Hamilton to Toronto commuter can save $3000 in fuel ( ie. $5000 fuel originally…now $2000 electricity…but charge offpeak overnight and cheaper electricity!)

    $3000 / year savings x 10 years = $30,000 savings ( after tax…meaning you have to earn $40,000). Plus its better for environment, your health ( no exhaust fumes headaches), and it sets a good example to your kids you are being responsible with the environment.

    AGAIN… SAVINGS OF $30,000/10 years that can go to paying off mortgage.

    HMMM…Think about it…if you buy a $28,000 car/SUV, after owning a car for 10 years, you pay more in fuel than you did for the car itself. If buying old tech gas burning car…buy a smaller engine/car.

    i) DRIVING TIPS: face it…we are wasteful when we drive…
    Drive a smaller car vs SUV….save $1000+/yr avg fuel
    Drive with car safely: no jack rabbit starts etc(Saves you $100)
    Don’t idle engine more than 30 seconds ( saves you $300/year in gas) ( and is not wasteful form of pollution!)
    combine trips ( pickup groceries on way home from work) saves time and $
    etc.

    j) Buy a smaller home and live within means. Don’t be a show off and just buy what you need. A millionaire friend told me he doesn’t own many ‘things’ as everything you own needs time and attention. He has free time to enjoy life! ( and the $)

    k) Don’t argue about money. It will be blessing to your marriage.

    l) Investments: I had Mutual Funds for years but figured out the fund managers were the ones making 2%/year no matter what. I buy ETF’s, learned about finances and manage money myself. I am seeking a good FOR FEE financial coach as well…not a planner I Read, learn, be cautious as the only one that is thinking of your best interest is YOU!

    m) Give to others. I read that the more you give the more you get back. (Amazing but true.) Volunteer and give to a charity you are passionate about. You will feel good and are doing good.
    It’s our responsibility as a rich society to give back. My passion is climate change and environment as we need to be the pollution solution!

    n) Have a Merry Christmas everyone. If this helps a couple of you then this time was well spent.

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