Here are money saving ideas that I consider to be the best of the best. They're the biggest and best because they'll make a big dent in your spending. A frugal living principle of mine is "you can only save the most where you spend the most."
It’s true. You can’t expect to save much money at all unless you focus on areas where you spend a considerable sum. Focus on these “big chunks” and you’ll be in much better financial shape than you will be if you worry about nickels and dimes. Stay focused where you’ll be most effective in saving serious money.
The idea of saving money isn't just about spending less or spending it more wisely, it often focuses on making better decisions that include not spending money at all. If you find not spending money difficult to do, then perhaps you have some sort of spending addiction, and that needs to be addressed first and foremost.
As a good starting point, let's review the big money consumers in our lives. They are typically the following, in order of highest cost first:
Being frugal is a great idea, but some of us can only keep a few things on the "radar screen" at one time. If that's the case, then focus on the money saving ideas below, and you'll be in better financial shape much faster than you will with clipping coupons and the like.
After you've mastered some of these big chunk money saving ideas, then you can move on to implement all those hundreds of other frugal living tips you've heard about to save a dollar here and there. Use those hundred or so ideas to fine tune your approach to frugality.
Until then, let's look at the big money saving ideas that can help you keep much more money in your pocket, or better yet, in your bank account.
In no particular order of importance, consider the following as excellent ways to save money. I recognize these as the big chunks when it comes to personal finance.
Rent when interest rates are high. I remember 13% interest rates on mortgages. What a crock! That's a credit card rate, not a rate for interest on a mortgage.
I know that having a home is an investment, but when the interest payment on your investment starts to approach the cost of renting, then renting vs owning a home is one of the better money saving ideas. When interest rates drop, you can get back into the housing market.
Refinance when interest rates drop low enough. Careful on this one. Refinancing seems like one of the obvious money saving ideas, but remember that it makes money for others that are handling the refinancing, and someone has to pay for that. That someone would be you. So, be certain that you are getting good return on investment. You need to know when to refinance.
Move to a tax free state. Depending on your income, this might be the best of the money saving ideas. My move to Wyoming saved me about $8,000 each year over what I was paying California. Now, if you can save thousands each year, that savings can pay for a lot of necessities in life. Perhaps it's time to move to one of the states with no income tax.
Become the ultimate cheapskate by having a deliberate focus on frugal living. This type of minimalist lifestyle isn't for everyone, but it most certainly can be effective in keeping more of the money you make, instead of handing it out to others who are all too eager to take it. Living such a lifestyle really requires that you step ouside the norm and become a type of oddball in the community. So what? Who really cares what others think? As long as what you're doing is effective and isn't hurting others, then it's none of their business.
Focus on total cost of transportation, not miles per gallon. Don't get caught up in how many miles per gallon your car gets. Focus instead on what you are paying for transportation.
Sure, miles per gallon and the cost of fuel influence your transportation costs, but when you buy a new hybrid that gets fantastic fuel economy, you're also paying:
Do the math and you'll find that calculating your transportation cost is one of the great money saving ideas, especially if, like most Americans, your life centers around having and using a car.
Say NO to those asking for your money. Aren't you just about tired of seemingly everyone asking for your money? You don't ask for their money, so why should they as for yours? It's time to tell these people to take a hike. You worked hard for your money, and you shouldn't have to put up with others who believe begging for it is a satisfactory substitute for earning it.
As cold hearted as it might seem, try resisting the urge to grab your wallet when someone tells you they're in need. Instead, offer them things they really need, like a job, a meal, a place to sleep, or an opportunity to clean up for a job interview. Then, watch their receptiveness closely.
The measure of their receptiveness is likely be a good measure of their interest in bettering their own situation through initiative. Most often, but not always, that's also a good measure of their worthiness. Here's a great money saving idea that will help you be better at helping others...give to those who are needy and worthy, not just the needy.
If you're going to be successful with money saving ideas, you need to start turning your back on emotionally charged events and circumstances that deplete your money, and sometimes that means turning your back on people whose only interest is to be carried on your back. The world isn't a perfect place, but it also isn't your obligation to fix things that you didn't foul up. Take care of yourself first and foremost, and you'll be in a better position to help others if you so desire (and can afford to do so).
Move to a low cost of living area. This is another of the good money saving ideas because it can greatly affect your cost of commuting, housing, and goods and services. Do some research and figure out where the general cost of living is lower. It might be time to relocate.
As an example, real estate is a big part of our cost of living. You might be curious to know that real estate prices are much lower outside of major cities, no matter what state you live in, so relocation doesn't necessarily mean you have to move far away, just far enough.
Grow your own vegetables. Most of us eat vegetables, so growing our own can be one of the best money saving ideas since it costs very little to do it, and the potential payoff is rather large. There is work involved, but quite often the payback is much greater than the modest amount of work required. After all, the vegetables largely grow on their own. The key is to select varieties that produce lots of food for the growing time, space consumed, and effort required to tend them. Get into vegetable gardening and start saving money.
Below is just a single day of harvest from only six plants in one of my greenhouses. And, this type of harvesting can go on all year long, even in the winter...without adding heat. Growing and raising your own food saves you money every day, all year long.
Avoid discretionary spending. This means buy what you need and not simply what you want. Americans buy lots of things that we don't need. We are fully engrossed in consumerism. No other country on the planet even comes close to the range of things we buy and how much we buy. Becoming more selective as a spender can make a huge difference in how far your money goes.
Stay out of debt - stop debt before it starts. Debt is a form of enslavement to another. It's alright for some things like a home mortgage, but better off left alone when it comes to other things. They say: "If you find yourself in a hole, the first thing to do is stop digging." I hope this is one of the money saving ideas that's easy to understand...don't start digging in the first place. Staying out of debt can be difficult, but it's essential if you're really interested in saving money and not being a financial slave to others.
When you see a sign like the one above, it simply advertises another opportunity for you to get yourself obligated to pay yet another person. As Dione Warwick sang, "Just walk on by...." Remember, owing someone money is a form of servitude, when it becomes a long-term obligation with no end in sight, then that's financial enslavement.
Pay off the mortgage. Okay, here is one of the real big money saving ideas. When you pay off your mortgage, you save tons of money over what you would have paid over the entire term of the loan. Many of us could do this if we really tried. For just a decent house, you might be surprised to learn that the savings could easily be in the hundreds of thousands of dollars. Much of this depends on the interest rate, the term of the loan, and how quickly you pay it off, but even at modest interest rates and paying off the loan at about mid-term, the savings are considerable.
Now, clearly we're talking about something that's worthwhile doing. Consider an early mortgage payoff as one of the most important of all money saving ideas, especially if you like where you live and you're not thinking of pulling up stakes anytime soon.
When you pay off the mortgage early, it's a lot like legally robbing a bank. You get to deprive them of money that you would have otherwise had to pay to live in your own house.
Now, how much fun is that! Safe and legal bank robbery! Yippee!
Have a bank account. This almost seems unnecessary to mention, but it's amazing how many don't have a bank account. In Cheyenne, a town of about 60,000 people, it is estimated that about 10,000 adults don't have a bank account. That's hard to believe. Instead, many of these people go to check cashing services and pay a portion of their check to cash it.
To my way of thinking, it's so unnecessary that it borders on insanity, yet for many people this is a way of life. Just open a bank account and you'll be much better off. It's one of the great money saving ideas because a bank is a safe place to keep your money, and there are ways for you to have access to it that cost little or nothing...not so with a check cashing service.
Disassociate yourself with human tar babies. I'm going to take some heat for this, but it is among the most important of the money saving ideas, so I'll take my chances. Merriam Webster's Unabridged Dictionary defines a tar baby as "something from which it is nearly impossible to extricate oneself." The expression comes from the tale of Brer Rabbit in an Uncle Remus story who gets hopelessly stuck when he is tricked into making physical contact with an artificial baby made of soft tar sitting in the hot sun. This story is part of folk tales published by Joel Chandler Harris in the late 1800s.
Tar is a useful substance when applied to solve a problem, but it's a pain in the ass if it gets on you or your clothes, and worse yet if it gets on the bottom of your shoes. You can guess what happens when you have your arms wrapped around a bunch of it.
If you have someone in your life that is high maintenance, regularly puts you in the financial "hurt locker" or otherwise constitutes a financial drain on you, and you can't seem to change the nature of the parasitic relationship, it might be that you're dealing with a type of financial tar baby. It's probably time to revisit that relationship in some detail. It will likely be painful for all concerned, but it could very well be the best money saving idea you ever implement. Be strong, be deliberate, and get the "money monkey" off your back.
It could be a family member, an associate, an acquaintance, a friend or a neighbor. It doesn't matter, any tar baby in your life can pull you down into deep and swift financial waters, just like a drowning man. It may be time to let them drown on their own and keep yourself afloat.
So, there you have it. A big list of big money saving ideas that can save you a considerable amount of dough if you implement them wisely. Consider adding these to the core part of your approach to frugal living. May the force be with you, and remember that you'll save the most generally where you spend the most.