From time to time, I’ve been accused by my friends of being…well, let’s say “frugal” (you can guess what they really call me by the title). As you may have noticed in my perceived value blog post, I don’t like to spend money unnecessarily. I’m sure everyone has heard of the obvious ways to cut spending: buy used, quit your addictions, only buy what you need, etc… But over the years, I’ve come across some not-so-obvious ways of saving that have really helped me earn my nickname!
1. ASSIGN VALUE TO YOUR TIME – This is, by far, my biggest trick. I give my time a finite value. I figure out how much (after taxes) I make per hour and think about all the work I do in that hour. Then, before I buy something, I think about how many hours of work it’s costing me to pay for it and whether it’s worth it or not. More times than not, it isn’t. I’ve actually said things to myself like: “that shirt costs at least 3 spreadsheets!” (Not out loud – I’m not crazy). I’ve picked up so many things at a store just to put them down a couple minutes later after I’ve had time to think about it.
2. BUY IN BULK…WHEN IT’S WORTH IT – If you use a ton of ketchup, then buy the ketchup that is cheapest PER OUNCE (it’s on the tag at the grocery store). If you don’t use much ketchup, then buy the CHEAPEST bottle overall. Doing the opposite of either costs you money in the long run.
3. BUY QUALITY…WHEN IT’S WORTH IT – I used to do construction, so I have a lot of tools. The nice ones are the tools I use all the time, and the cheap ones are the tools that I rarely need. I’m not going to buy a top-of-the-line table saw when I’ll only use it twice a year. I don’t care how spectacular it is, I won’t get my money’s worth out of it!
4. MAKE SACRIFICES – Want to buy something? Sell something. I think I’ve had around 34 guitars in my life, but I only have 8 right now. I’ve almost never bought one without selling one. It’s a simple concept, but it really pays off (eBay and Craigslist are your friends). Plus, I’m pretty sure I’ve made money on guitars while I was at it.
5. USE CAUTION WITH CREDIT CARDS – For the love of God, be careful here! I make my credit cards work for me, and I’m sure the card companies hate me because of it. I found the best rewards card I could, put every bill and expense on it I could while still being able to pay it off every month, and I end up making about $400 a year in rewards. **PLEASE NOTE** This doesn’t work if you carry a balance. Please don’t try it and then blame me if it doesn’t work well for you!
6. BEWARE OF EXTENDED WARRANTIES – Paying extra for extended warranties is almost never worth it (unless it’s just for peace of mind, which is priced subjectively). If you don’t buy the plan, then there’s at least the OPTION of not paying for possible repairs. Otherwise, you’re paying for repairs that may or not ever happen. And think about it: not everything you buy will break, so you’ll more than likely come out ahead in the end if you just save the costs up front.
So there you have it. I’ve let go of all my frugal secrets. Now you can be a cheap bastard or a cheapskate, too!
How do you cut costs or reduce spending (besides ordering your promo items from Quality Logo Products)?