Making more money is fun. But have you experienced the high you get when you remain with more money without necessarily having to change jobs or work longer hours?
Well. If you haven’t, I can tell you it is very comforting. Cutting costs to save more money is a great way to build financial discipline while gearing you up to embrace a financially independent lifestyle. If you can cut costs, you will be well off even when you start earning more.
I am constantly exploring new ways to cut costs and earn more money to fuel my dream of retiring by 40. Here are some unique ways that people rarely talk about yet I found them very effective and easy to implement.
Identifying and Getting Rid of Unnecessary Finance Charges
Go through your bank statements and pay attention to the transaction charges you accrue over the months. You’ll be surprised to find how much it is especially if you make many cashless transactions.
The figures escalate if you withdraw at off-brand ATMs, and use credit cards or other convenient online payment processing platforms.
Moreover, some bank accounts have operational costs that pile up every month. Take time to review your financial expenses and find ways to either get rid of them or consolidate them. Some ideas include:
- Limit the number of current accounts with a monthly ledger or operational fees
- Finding cheap transaction cost accounts for your cashless transactions
- Paying more of your bills in cash
- Closing any financial interactions that have punitive ledger or maintenance fees
Haggling Whenever Possible
Many people don’t understand the haggling concept. They expect the seller to give them the deal of a lifetime and will be surprised to realize that you can almost always talk someone down on the price – especially if you are buying from a local business or an individual.
Trying to talk the price down might make you sound cheap but it is a good way to save some dollars especially if you are buying something used and there really isn’t a sure way to determine the price.
As long as you remain amicable and considerate of the seller, you can end up getting amazing deals on different things. Be a nice person, friendly, and do your research before buying to know how low you can deal without turning oppressive.
Stopping Automatically Renewing Subscriptions & Premiums
Do you have an ever-running annual subscription that you rarely use or think of? Well. That used to be me. I had a couple of annual subscriptions for cloud storage, video streaming, some online software, and web hosting.
After close scrutiny, I realized:
- I constantly renew my hosting on a platform that charges more for equal resources to another popular hosting
- I mostly use YouTube and Netflix even though I have Amazon Prime (I don’t shop online at Amazon anymore) and Hulu
- I don’t use most of my online software subscriptions full time hence a full-year subscription is ultimately a waste of money
- I keep choosing what goes into my Google Drive since it is already full of photos. I am constantly paying but not happy
With these three points in mind, I went through my subscriptions and:
- Changed my hosting provider to a cheaper and equally efficient platform
- Got rid of Amazon Prime and Hulu. Switched Netflix to a monthly subscription and set aside binge-watching months to consolidate subscriptions instead of taking a full-year subscription
- Resorted to a monthly subscription to online software to only pay on the few months that I actually use different platforms
- Set up a local file server to host most of my photos from the past and downgraded to the free Google Drive tier
These changes might be drastic to you but I found them very practical bearing in mind my lifestyle can wrap around them. The bottom line is:
- Don’t auto-renew without shopping for cheaper options
- Don’t auto-renew without assessing whether you can do without or could do with one or two months of subscription instead of a whole year
Constantly Shopping for Better Utility Costs or Rates
Even though utilities are inevitable, they’re not set in stone. Look for any wiggle room in your utilities and use them to the fullest.
For instance, if you can change your electricity or gas company, make the change and find someone with better tariffs or rates.
If you can’t, move into a neighborhood with better offers. This is a good move especially if you are renting.
This will work hand in hand with saving energy, water and using the most strategic resource at a given time.
For instance, heat with gas if it is cheaper than electricity. Better still, use a pellet stove if your house can accommodate it and it is cheaper than gas and electricity.
Replacing High-Interest Debts With Cheaper Debt
Debt consolidation, renegotiation, or transfer is a great way to get rid of crippling interest rates. However, before doing any consolidation, take time to go through the terms and conditions and identify any hidden costs.
There are many debt consolidation services, some of which will help if your credit score is good but others will seem to help with a lower interest rate but have other hidden costs that cancel out the benefits.
The basic example of consolidation is taking a better interest load to pay off a high-interest cart title loan from a loan shark or an old high-interest-rate education loan.
It takes time and needs proper research. But if you are keen and do your math right, you will stop paying tons of crippling interest rates.
Specifying Extra Debt Repayments to Go Toward the Premium
Paying loans fast is a good way to save on interest rates. This is a lesson we’ve learned for a long and even implement religiously.
However, I learned that paying extra premiums on your loan doesn’t necessarily work to your advantage.
Most financial institutions will keep a constant ratio of interest repayments and premium repayment. They will still take your extra payments to settle their interest figures, a move that will have no impact on reducing your loan premiums.
When paying off a loan in amounts higher than agreed-on minimum premiums:
- Talk to your provider to ensure that the extra payment goes straight to your premiums
- If there is a minimum overpay figure before the extra can go to premiums, save the extra money until you achieve the threshold and fill in the necessary forms to ensure your extra money whittles down your premium
The reason I am keen on premiums is loan interests are a percentage of the premium. Lowering it means that you will inevitably have to pay lower interest on the loan in the long run.
Avoid Overeating and Overindulging
This last trick is very personal. It came into its element when I was trying to stay in shape without working out as much. In 2020, I realized that keeping up with my workout and jogs was tough due to the lockdowns.
I resorted to a controlled meal plan to reduce how many calories I consume, shifting from eating multiple meals, snacks, and huge meal potions.
Previously, I could eat and sweat it out in the park at the gym. A few weeks of controlling my portions and meal types made me realize:
- I didn’t have to eat two burgers at a go for lunch
- Quenching my thirst with mountain dew was unnecessary
- I didn’t need four cans of beer to make it through a game of football
- Eating a whole roasted chicken in one sitting was unnecessary
While the big goal was reducing my calorie intake, I soon realized my food budget sink down considerably.
See, even though I cook my own food, cutting my portions in half considerably reduces the ingredients I use to cook. The end result is tangible savings in my shopping budget.
Yes. You might not be a heavy feeder like I was. But if you are, considering toning down your food and drinks could be a double-ended sword. Remember, sticking to a glass of wine a week instead of three bottles is still dealing with overindulgence.