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.If you would like to read more articles like this, you can sign up for my free weekly money tips newsletter below (we will never spam you).