It’s a dilemma.
You want to live a rich and juicy life right now, but you also want to put money aside so you can create assets and watch your garden of investments grow.
How do you save money without lowering your quality of life?
First of all, you have to realize what is important to you.
If avocado sandwiches and lattes make you happy, those are not the items to dispense with – no matter what financial experts say and what calculations they come up with.
You have to find a way to cut where it doesn’t hurt.
Here are seven examples of things I have cut from my own life that I hope will inspire you.
1. Insurances and Extended Warranties
Nope, don’t go without essential insurances, but look at your policies and make sure you are not over-insured. A lot of people have double coverages.
I always avoid the extended warranties that clever salesmen try to sell you when you buy any kind of electronics or gadgets.
These kind of product specific insurances feed on the fear that your new and shiny object will break the moment you walk out of the shop. It’s not likely to happen, and the warranty is often overpriced.
Have you checked if there are any warranties connected to your credit card? You might pay a lot of money for double coverage.
If you are happy with a specific insurance, you might still be able to save some money.
Have you tried checking the competitors’ prices or calling up your current insurance company to see if you can renegotiate the deal?
2. Impulse Purchase
Whether it’s online or offline, avoid buying something right away.
Let yourself sleep on it. You often find that you don’t need it anyway.
When you go shopping for groceries, have a specific list before you enter the shop, so you don’t get distracted by all the other things on offer.
3. Cable TV
Does anyone watch TV the old-fashioned way anymore?
I admit that I still have a box on the wall, but it’s mostly used for a movie or a show here and there for the kids.
If you are still paying for cable TV, maybe it’s time to consider if you still need it?
There are plenty of streaming services that are cheaper (like Sling tv, Hulu, Youtube Tv). And of course, if you mainly want series and movies, you have Netflix, HBO and Disney Channel.
I don’t have any of the streaming services – I just don’t want to have the temptation of getting sucked into a series or a show – but I rent or buy movies for my kids.
Now that you are at it, look through your internet and phone deals and check the competitors’ prices to make sure you are not paying too much for too little.
4. Lazy Take-Aways, Cocktails and Dining out
A friend of mine became financially independent within a few years once he decided to stop drinking alcohol and invest the money instead.
I really enjoy dining out, but it’s something I do on special occasions. I make plans with friends, book a table and I dress up for it.
I avoid doing it out of convenience. My own food is quicker, better and cheaper than the everyday take-away solutions.
5. Lottery Tickets
If you play the lottery, you have a tiny chance of winning.
If you don’t play and invest the money instead, you are certain to win in the long run.
A few years ago, Warren Buffett opened the annual meeting of Berkshire Hathaway with illustrating how 10,000 in the stock market (placed in an index) in 1942 would have grown to 51 million today.
That’s a pretty nice win, isn’t it?
6. Status Symbol
Always ask yourself if you are buying something because you need it and really want that model (be it car, phone or handbag) or if there is some other motive behind your purchase.
Quality is good and can often last longer, but show off-purchases will keep you broke.
Ask yourself if the phone, the car or the bag is the best option for you and your life. Ask yourself if you are secretly buying it because of what you hope people will think of you when they see you with it?
Is it about you and your life or is it more about what other people will think about you?
It takes a bit of self scrutiny, but this is a big one that can save you a lot of money.
7. Household Brands
When you walk around a store, there will often be many products which are identical, but priced very differently.
It’s a retail secret that some of the private labels – the stores’ own brands – are actually produced by the same factories that make the products for some of the brands.
I’m mainly thinking about some of the more boring everyday items like soap, detergent and wet wipes.
Look at what’s in the product and where it’s produced. You might discover that it’s the exact same thing. Choosing the cheaper private label can save you a lot of money in the long run.
How are you going to invest all that money that you will save with these seven tips? If you want to learn about investing, you are welcome to download my free e-book here.