I was talking with a friend recently about our thrifty natures. She was talking about how frugal her Dad was, even more than me, and how it had rubbed of on her. I grew up fairly poor and being thrifty was just a way of life. I never really got out of that practice even now that I make decent money. I’ve mostly avoided debt throughout my life with the exception of my current car, which I am trying to get paid off quickly, and I will never buy a new car again. Other than that I try to save a few pennies where I can. Not that I never spend money I just would rather choose what I spend it on. Lets get down to a few tips and tricks.
Using Pareto’s law
Pareto’s law or the 80/20 principle as it is more commonly known states that, for many events, roughly 80% of the effects come from 20% of the causes. Basically you can achieve a lot with minimal effort if that 20% effort is right thing. Applied to the field of being a cheap ass you can save a ton of money by appealing your efforts to the right things. For example people that go through their whole house replacing all their light bulbs with CFL’s to save money on their electric bill. When the CFL’s cost many more times that of incandescent bulbs. Also the difference on the monthly bill is very minimal. You could spend a lot of money up front on replacing bulbs and not see much of an impact on your bill. On the other hand by changing from the philosophy of heating an entire home and instead heat small areas and yourself you can make a huge impact. I cut my monthly electric bill from an average of $200 to an average of $50. Unlike the light bulbs using small space heaters and electric blankets pay for themselves the first month easily. Another big one for me is keeping my hot water heater off until I need it. I usually flip the breaker until an hour before I need to take a shower. The hot water heater makes a bigger difference than anything else.
I had been really itching to upgrade my phone for months. I wanted the newest fanciest one on the market even though my phone still worked fine. I just couldn’t justify the expense though so I made due and waited. One morning I saw on Facebook the my cell phone company was doing free upgrades for the phone I wanted. I went by after work and got my mostly free upgrade. It ended up being a rebate not free out the door. I had money I was saving for it anyway so I used that and a few weeks later got it right back. When you want something be patient about it and don’t just run out and grab it. I thought about that for a long time, I knew I didn’t really need it but I wanted it. I decided i wanted it enough to save up for it while still saving for other things knowing it would take a while to save for it. While being patient I was on the lookout for deals so that I could make sure I got the best deal on it as possible. Running out first thing would have cost me a lot of money and set me back pretty far in my savings goals.
Choose Free First
I occasionally like to play a video game. I grew up with them and enjoy kicking back with one to relax. Games and game systems are expensive though. I have been wanting to buy an XBox 360 recently and could not justify the expense. I’m not a big gamer and know I wont play it that often. I came into some extra money and knew I could get it and almost did. I decided that before spending all that money to scratch my gaming itch I would try something else. I dug out my old Sega Dreamcast system that I have not played in at least six years. Buying games for this system are super cheap on the second had market. Not that I’m recommending it but for information purposes only all the games ever made for it are online and can be burned on a regular CD and played. So instead of spending hundreds of dollars I spent nothing and I’m having fun. This was just one example of an endless number of free solutions to expensive problems.
Choose Second Hand
If you can’t find what you need free then find it as cheap as possible. Most anything you are looking to buy could be found in the second hand market much cheaper. It may take some time and patience but searching Ebay, Craigslist and the local thrift stores should turn up what you want. I have got espresso makers for free, a Wagner skillet for ten bucks, snow pants and wool clothing for a few bucks all second hand. Most times this is all in perfect shape. I almost exclusively buy all my clothes second hand at this point.
Cut Cut Cut
A few years ago when my roommate moved out I decided I needed to cut my bills to make up for his share. I cut like a mad man and even cut more than needed. I canceled cable TV and got an Apple TV and got Netflix and later Hulu Plus cutting an expensive cable bill to around $16 a month. This is when I switched from heating the whole apartment and used electric blankets. I started washing dishes by hand and started turning off the hot water heater. Later I called and hassled my car insurance company and eventually got them to drop the bill by almost $100. I cut so much and so hard I didn’t even notice the missing share of the rent. In fact the bills got so much cheaper I had to pay less myself. There is always a way to cut your expenses you just have to decide how tight you want to go. I choose the level I’m comfortable with. I’m not in my apartment freezing, usually. Having more money around to save and have fun with over going to needlessly high bills is great.
I’ve been called a cheap ass on more than one occasion and I wear it as a badge of honor. I’m proud of my thrifty lifestyle and the extra money it affords me. Spending my money as I choose it and not how the bills dictate it makes me happy.
How do you save money? What are some tips you have to save a buck? Let me know in the comments!
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