I currently work from home, and in doing so, I've discovered several ways to make the most of the experience.
Saving money and cutting back on spending can be difficult, especially if you don't have a concrete plan. The four ideas listed below are great starting points when it comes to reducing unnecessary spending so you can put away a little money each month.
1. Create a Budget
Creating a budget might sound vague, but it’s actually the most important first step you can take to saving money. Everyone makes a simplified budget in their mind, but it takes actually recording every single transaction you make to truly understand where your money is going.
Only after seeing how much you’re actually spending and what you’re spending it on will you start to realize ways you can scale back and save. Create an Excel or Google Sheets page with different spending categories like “Eating Out,” and “Rent,” “Gas,” etc. Record every single purchase or debt payment you make in these categories.
The first month is the most difficult because you have to stick with it and wait until the end of the month to see the magic happen. Look over all your expenses and start to figure out where you can scale back. If you spent $96 last month on eating out, do you think you could eat out one time fewer and only spend $75 the next month?
I really recommend finding a YouTube tutorial that goes through how to organize a solid budget chart. Just search “how to create a budget” and pick any of the dozens you see to get started.
2. Cut Down on (or Eliminate) Subscription Services
After about a year or two of having subscriptions to Netflix, YouTube Premium, Spotify, Hulu, and HBO Go, it finally dawned on me that I don’t even watch enough shows or movies each month to make it worth having all of these subscriptions. In fact, I realized it would be much cheaper for me to just rent a movie from YouTube or another service for $3 or $4 once a month because that’s how little I watched TV.
Now, some people watch a lot of TV—I get it. But do you really need all those services? Are you binging on Hulu, Netflix, and HBO every weekend? I cut down to just one service: YouTube Premium. I enjoy YouTube Premium because I primarily just watch YouTube anyway, and I can also use it as my music service.
YouTube Premium comes with YouTube Music, which allows you to download music over wifi, thereby saving even more and allowing yourself to cut out your other music streaming service, like Spotify.
I’d even include Amazon Prime as a subscription service. I realized I just don’t order enough packages for the free shipping to be worth the $100 or so I spent on the Prime service. So, even though I order from Amazon frequently, the money I spend on shipping still doesn’t equal the amount I’d have to pay for Prime every year.
3. Make Coffee at Home
If you’re a coffee drinker, stop drinking Starbucks or any coffee outside of your home. The price is just not worth it. For years now, I’ve been buying the cheapest bulk coffee I can get at Walmart. I only wish I had had this foresight when I was in college and buying Starbucks nearly every day, spending $2 to $3 on just brewed coffee.
Let’s just say you buy brewed coffee at $2.45 two to three times a week. That’s $2.45 * 2.5 * 52 = $318.50 a year on coffee. You would spend $318.50 a year getting coffee, and that’s just brewed coffee, not an iced vanilla chai latte or another more expensive drink. If you don’t drink coffee but drink fruit teas or similar drinks, make them at home. You can also throw alcohol into this category, too.
4. Delay Gratification
This topic, like creating a budget, sounds vague, but it has helped me save significantly through the years. When I say delay gratification, I mean avoid instant gratification so that you can have a larger reward in the future. If you eat out every weekend, start making a sacrifice and eat out every other weekend or once a month.
Buy discounted or used clothes rather than new ones. I regret having the urge to buy a new car. While I paid it off quickly, I realized I could have gotten a used car for half the price and still have been reasonably satisfied. Put off living in a nice studio apartment in an apartment complex with a gym and a pool and settle for renting a room in a house with other roommates at a much lower price.
The hardest part about prolonging short-term, instant fun—like frequently going to the movies or hitting the bars—is that you might decrease your social circle or have to turn down friends' invitations to hang out. But, you should keep the end goal in mind, which is to save now so that you can achieve your long-term financial goals, whether that means paying off your student loans or purchasing your first home.
This article is accurate and true to the best of the author’s knowledge. Content is for informational or entertainment purposes only and does not substitute for personal counsel or professional advice in business, financial, legal, or technical matters.
© 2021 Thomas Wright