A lot of people are asking me to share how I am able to save more than 50% of my paycheck each month and still live a good life. I will try to answer this question below and tell you how you to can save a lot of money to.
The first thing to consider is that I earn a rather good income. I earn about $6000 a month (pre-tax). This makes it easier to save a large percentage of my paycheck. But I have not always had a good income and I was able to save 30% of my income back when I earned about half of what I am earning now. The bottom line is that it is almost always possible to reduce your expenses and save a part of your pay check.
Before we look at how I save money I want to stress how important it is to not only look at how you can reduce your expenses. You should always be looking for ways to increase your wage as well. Is there any class or certification you can take to make you worth more to your employer. Is there any side hustle that you can use to earn extra money on the side.
We all grew up in a society where we are thought that you need to have certain things. Things that you can not live without. Things that every working person should own. But do you really enjoy having these things. I personally find that a lot of these things are not worth the price they cost. That to me they are not essentials but rather unnecessary expenses. You should therefore consider all your expenses and see if they are really necessary.
Which things you have been thought that you cant live without might vary depending in where you grew up. If you are raised in certain parts of the country then you might have been thought that you can’t live without a car, the news paper or Sunday dinner at a restaurant. In other parts of the country the essentials might have been a phone line, cable tv and magazine subscriptions. The truth is that none of these things are really necessary to all. If you really ask yourself what you need and what you might be bale to give up without negative effects on your life then you might be surprised over how much you can live without. I know I was and I was able to eliminate a number of monthly bills.
It does not matter what other thinks. Do not pay for anything that does not bring you a better life.
Sometimes it can be better to switch to a more expensive alternative than the one you are currently uses if that brings you more fulfillment per dollar spent. Your goal should not be to minimize your expenses. That might give you a boring life. Your goal should be to maximize what you get from your money.
Things I no longer spend money on
Below you can see some examples of the things I no longer spend any money on. Things that you might also be able to stop paying for.
- Cable TV: I no longer pay for TV. I know I am far from the only one who have chose to take this step. You can find all the entertainment you need online and you can save a lot of money each year by cutting your cable.
- Netflix: I no longer use Netflix either. I find that TV tends to steal too much time since I watch things I do not really like. I therefor try to see the films I really like in the movie theater and buy the shows I want to see on DVD. This does not cost me any more than TV used to do and I end up watching only the things I really want to see.
- Magazines: I used to subscribe to a number of different magazines that I hardly ever read anymore. I realized that I was able to read everything I want to read online and cancel almost all subscriptions. I still get one magazine that I read religiously.
- Newspaper: I no longer get any news paper. Not even a local one. There is no need to. Local blogs tends to report better than local papers on local matters. National and international news are easily available online.
- Landline: I do not need a phone line in my house when I got my cell phone.
- New cellphones: I do not buy new cellphones before me old one breaks. The new functions you get with a new phone is not worth the often very high price.
- Coffee in coffee shops: I do not go to star bucks or other coffee shops any more. The coffee in these shops are not as good as the coffee you can brew yourself with a quality roast. Going out to start bucks regularly is very expensive. It is very easy to spend $100 a month at star bucks without thinking about since each coffee only cost a couple of bucks. I was surprised what a large difference this made.
- Lunch: I no longer eat lunch in restaurants. Instead I prepare and bring my own lunch to work. This allows me to eat healthier, cheaper and better tasting food every day. A number of my colleges have started doing the same thing and we are now able to eat without stress during our lunch hour since we no longer have to rush out.
- Snacks: I no longer eat snacks, candy or chips very often. This have allowed me to save a lot of money. A small candy bar each day quickly adds up to a lot of money. I also realized that I used to eat a lot of snacks that I didn’t really like. I was just eating them out of habit. Once I realized that it was easy to break the habitat. Now I make sure to only eat snacks I really like when I do eat chips.
- Alcohol: I used to get way too drunk when I went out. I drank a lot of alcohol and cared more about getting drunk than I did about what I was drinking. I have come to realize that I can have a lot more fun while saving money by drinking less. I still drink, but I do not get completely hammered. An added benefit of drinking less is that you can choose to treat yourself to drinks you really like even if they are a little more expensive. I have completely stopped drinking when I am at home. I only drink at social gatherings where alcohol is prevalent.
- Credit cards and consumer credit: I no longer use these types of credits. I never buy anything I can not afford.
Things I spend less on
Below you read a little about things I spend less on.
- Insurance: Most people can save a lot of money by looking over their insurance and finding a cheaper provider. You need to make sure that you do not pay more than you need for the protection you need and that you do not pay for more protection then you need. I recommend that you look over your insurance once a year to make sure that it is always suited for your current situation.
- Internet and cellphone service: There is a lot of money to be saved by regularly reviewing and renegotiating your cellphone and internet service. I always set a calendar alert for when my contract is up. I then move my business to where ever i get the best deal. Make sure you do not get tricked into paying for a service that is more than you need. Most people do. Paying for more than you need is a waste of money.