How I Reduce Spending Every Month

I wrote a quick off the cuff comment on Quora which answered the question “Why are most people broke?” As of today, my answer has been viewed about 250,000 times. Since it’s received so much viewership, I decided to write a more expanded version of it.

There’s always been the two groups: “group save” vs. “group make more”. But today I want to focus on how we can get more efficient with our money and stretch it out a bit more. I’ve put together a quick list that I personally use to reduce my own expenses. Some of these may hit close to home for you and some may seem like an outlandish suggestion. Feel free to pick and choose:

Rent

This is the biggest expense item on everyone’s sheet. It’s also where you can save the biggest amount. Living in an affordable part of town, or outside of a gated community, or an expensive apartment means you can put back hundreds or even thousands of dollars back in your savings account. You can take the extra saved money and invest it, pay off debt or splurge on it.

Groceries

My shopping list predictably includes meat, nuts, coconut milk, veggies, milk, bread, eggs, sugar, cheese, coffee, and high quality ice cream. I have significantly reduced my bread, rice, sugar, and dessert intake. I rarely buy anything that is packaged so no $4 Kudos bars or $4 Tropicana Orange Juice. Buying raw food and non-packaged goods reduces my bill (also keeps my belly reduced too). I avoid high retail types of grocery stores like Safeway and Albertson and the ilk. They are there primarily to sell you pancake mix, sugary yogurts & cereals and granola bars. Thanks Safeway, but I’m on to you.

Cars

I’m a car guy. Over the last 15 years I’ve owned some nice machinery and have always paid for my cars on cash except for my latest which is financed. I’m not wasting money on cars for now. If I hit it big, I’ll be sure to park an Italian Stallion in my stable. But until then, no to fancy cars and cars that depreciate very quickly. Every time you go and sell your used fancy car you lose thousands of bucks. Also, I’m not buying a German car more than 5 years old and it’s also going to have an extended warranty. Stay safe and get a used Japanese car. Pay it in cash. 

Flying

I’ve been traveling international since I was 3 years old so it’s become a part of my identity to get on a plane and explore. Traveling is a splurge that I will never sacrifice. It’s what I live for. But there’s no way I would spend 3x or 5x the money flying business or first class. I would never use my credit card points on them either. I’d much rather spend the extra money at my destination. It’s way too much money for slightly more room and better food for a flight that lasts just a few hours. Economy class all day every day.

 

Hotels

Are you the Airbnb type or hotel type? There are pros and cons to both. But for a price conscious consumer like me, Airbnb is an option that has worked out more than a couple of times. Airbnb worked out for me in Austria, Italy and Switzerland. I got nice places at nice prices.  If I really want to live it up I go the hotel route. Airbnb gives you pretty good stuff in nice locations for not a lot of money. Try it.

Entertainment

I don’t go to live concerts (rarely), I don’t pay extra to watch movies in 3D or IMAX, unless they are truly amazing movies. And I definitely am not interested in purchasing to watch sports games at a stadium. And to add to that, you won’t see me paying $200 to watch an expensive play or a musical tour.  

Drink and Drugs

This is simple because I don’t indulge one bit in alcohol or any type of drug. They aren’t good for you and they drain your funds. More money in my bank please.

Clothing

As I get older I don’t want tons of clothes. I don’t need 9 pants, 20 dress shirts and 16 tshirts. What I do want is fewer clothes that are really higher in quality. For example, You can get a $9 tshirt from Old Navy. Or you can go to Banana Republic and get a $30 tshirt that has been made with a higher thread count of fabric. It will also last you thrice as long.

Owning fewer clothing means less confusion in the morning when running out the door. Branded clothing is more expensive and usually just a price gouge for no reason. I avoid brands and especially brands with massive logos. I actually hide clothing brands if I can. Buy less, but when you do, buy really high quality.

Toiletries

No fancy luxury cosmetic products for me that come in shiny beautiful packages. The point of soap is to break oil apart. Everything after that fact is a nice to have. I don’t buy fancy shampoos, fancy lotions, fancy hand soaps and no $25 hair pomade gels. The less products you douse your body with the better. A simple shampoo, body gel and basic conditioner are good for me. To be fair, I use a slightly upper scale shaving cream, because you know, Barbasol.

Credit

I never ever keep a revolving balance on my credit cards. I charge them and pay them off immediately. I do not carry credit card balances from month to month. Ever. When you do this you pay a toxic finance charge which is calculated using daily interest. You are better off taking cash, rolling it up, and torching it to warm your hands on a cold night. Complete waste. Say no to wasting money on interest.

Eating Out

This is a big one for everyone. I refuse to go to restaurants for the ambiance, or super upscale places. You won’t catch me dining at a place that is even $40/head. I skip appetizers and get the main course. I stick to simple places known for making excellent food at digestible prices. But I like my desserts so I’ll make a twice a month run to Cheese Cake Factory to try a new flavor.

Airplane Food

Being hungry on a plane is expensive. There was one time where I had to order food on a flight because I was feeling sick with hunger. Always eat beforehand. I personally have Priority Pass lounge access so I usually can eat at any airport in the world for free. In April 2017 I took a vacation to Iceland and Sweden. When we landed in Sweden, I found an amazing Priority Pass lounge and we went in. We must have eaten $100 worth of food before heading into the city, for free. Food in Sweden is slightly pricey, and food prices in Iceland are insanely pricely.

Gadgets

I don’t replace my phone frequently. Most smartphones purchased within the last 3 years are capable of doing everything that I need. 5G is coming out, and soon 6G, then 7G…it will never end. I’m using 4G today so I’m not going to refresh my phone for a 5G one. Forget it. Also say no to cheap gadgets that you play for a week and then throw away. Only buy the stuff that really really appeals to you.

 

1 thought on “How I Reduce Spending Every Month”

  1. if you want to save money, spend more time overseas in countries where people make on average the equivalent of around 200 to 300 dollars a month. places like that have places to rent that are affordable to people who make 200 to 300 dollars a month. the same idea applies to entertainment, transportation, etc. everything in those countries is catered to the budgets of people living there. that said, if they are happy with their lives making 200 to 300 dollars a month, somebody with ss of around 1000+ dollars a month will be just if not more happy. commonsense.

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