You cannot get rich if you are not willing to dramatically lower your spending. If you are able to lower your spending dramatically, then you will have far more money to save and invest.
Stop Using Brand Names
When you buy a branded product or item, you are paying for the brand name and the advertising behind it. The product may be good, but there are always products that are better. For example, with washing powder, you need to try many different types and start using the one that works the best for the cheapest price. There are so many brands of jeans, so why are you picking the most expensive? They do the same job as the cheap ones you get from market stalls.
Live In A Cheaper Area
This is a big factor when it comes to saving money and building wealth. If you live in a cheaper area, you will save a massive amount on rent or mortgage payments. You will also be less inclined to keep up with your neighbors. You will not feel compelled to buy the most expensive cars and keep the best lawn. Live in a cheaper area, and the house may not take as much maintenance.
You Can Live Without A Car
You are hemorrhaging money by owning a car. The cost of running a car is more than you realize and it is costing you a fortune. You can live without a car. You can walk, you can take the bus, you can carpool with people, and you can ride a bike. If you were to get rid of your car, you would save more than enough to help you invest in the long term.
Buy Things In Bulk
Buying in bulk is not just for shops, you can do it too to save money in the long term. You can go to wholesalers, or you can try online auction websites to find bulk-buy items. Supermarkets also run offers all the time on things that you can store, such as toilet roll and rabbit food. If you shop around and happen to find a great price, then take full advantage. It will cost you money in the short term, but you will save money in the long term.
Plan Ahead For Gifts And Events
You should be shopping for Christmas and birthdays all year round. Not only does this allow you to buy more thoughtful gifts, it also helps you save your hard-earned cash. Think about why shops run so many offers and such near Christmas, it is because they are trying to get you through their doors so they can negotiate with you on their own terms. Shop all year round for gifts and events, and you set your own rules where you can save money.
Stop Trying To Keep Up Appearances
You do not need the best clothes, you do not need the newest car, the sexiest gardeners, or the best hairstyles. People are influenced by appearance, which is why you do not see lawyers in their office in overalls. However, you can cut your “Keeping Up Appearances” budget and maintain the same overall effect. Better still, you can look and act like a regular person while knowing that you are building wealth in secret.
Stop Trying To Impress People By Paying
Some people seem to insist on paying because they think it impresses people, but people are rarely that impressed by people that pay. It may feel good, and for a moment you may feel powerful, but hang around a person that does it for a while. Soon, you will start expecting that person to pay for you. Ironically, you will find yourself disliking that person when that person “doesn’t” pay.
Insulate Your House And Save Money On Home Expenses
You’ve heard and read these sorts of tips on plenty of other websites. As a matter of fact, take a look around our website and other websites to find good ways of saving money on things such as household expenses. You already know that it is a good idea to invest in more expensive and energy efficient electrical goods because you save money in the long run.
Second Hand Furniture And Items Are Just As Good
Stop insisting that you live with items that are new. There is no need for a new table, sofa, or bed frame. The only items you need to buy new are toilet seats and mattresses. Everything else can be bought second hand for dramatically less than what you would have paid new. There are people that buy the newest games consoles for their full price when they come out, only to sell them for one third of their price within a year.
You Don’t “Need” The Best Phone On The Market
The current trend for buying the best and most expensive phones is obscene. This is coming from a person that has seen behind the scenes in the industry. People are actually buying phones because one offers more mega pixels on its phone than another, or because one has eight cores instead of four. Many of the phones are assembled abroad for a fraction of what you are paying.
Not to name names, but a certain Smartphone 3 by a fruit related company was building units at a cost of $17 each. That included parts, labor and finishing, and they were selling those units for several hundred dollars in North America. So many companies have jumped on the bandwagon with Smartphones because the profits are higher than if they were selling drugs on the street. You are not paying for the technology, and only a portion of your money goes towards product research, what you are paying for is mostly gross profit. Stop buying the best phones. Get a Pay As You Go phone that is reasonably priced and/or a modern one that is second hand.
Don’t Use Direct Debits Unless You Save Money Using Them
If you feel that you are not in control of your money enough. If you feel that you do not pay your finances enough attention, then you have to force the issue. Do it by abandoning the idea of direct debits in all cases excepting where you get a discount for paying by direct debit.
Make it so that every payment and every bill you pay requires you to go online and do it manually, either via the company’s website or via Internet banking. It forces you to keep a budget, it forces you to keep checking your balance, and it forces you to think about your money and your expenses. It forces the issue, which may help stop you spending indiscriminately.
How Much Insurance Do You Really Need?
If you are buying $3000 TV sets instead of $300 TV sets, then you are going to need more insurance. How much insurance do you really need when you look at what you own? If you do not have a new or luxury car, then why not simply have liability insurance and save up money every month for if you need to repair your car.
Do you really need to insure your carpets or your smaller electrical items in your home? Do you really need to buy life insurance if you already have savings in the bank and/or a good investment plan?
Avoid Insurance By Spending Less And/Or Self Insuring
Self insuring is suitable in some circumstances were not having insurance is legal. For example, do not avoid getting liability insurance on your car, or public liability for your business. Here is an example of self insuring the contents of your home.
Go online and find a few quotes for home contents insurance. Try to find a few cheap quotes and take the advice shown in the previous section of this article about what you should and shouldn’t insure. Once you have a few quotes, pick the smallest.
Let’s say that the lowest insurance premium is $40 per month. Instead of buying that insurance, have $40 direct debited out of your account every month and placed into a savings account. Over time, you will save a lump sum. The idea is that if something happens where you would have made a claim with the insurance company, instead you use the money that you have saved in your savings account. You should not touch the money unless you come across a situation where you would have made a claim if you had bought insurance.
Over just the space of a year, you will have $480 in your savings account, which is money you would have given away to an insurance company. In just five years, you would have $2400, and that is all money you would have otherwise given to an insurance company. Let us not forget that most people rarely put in a claim with their home-contents insurance company, which means there is an equally high chance that you will not touch your insurance savings either. Plus, even if your savings account only pays 3% interest yearly, your $2400 turns into $2,635.