You MUST Cut These 5 Expenses To Save More Money

BY COLLIN HARNESS

You build wealth by acquiring assets. So where do you get the money to purchase assets?

In order to purchased assets I dramatically increased my savings rate. In the beginning, I traded time for money working as an employee for a major corporation

These are the 5 expenses that I cut in order to save more money and begin my investing journey.

1. Travel

Traveling is important to me. It reminds me that there a big world out there with lots of different people. It is also a nice break from my day to day life.

But, traveling can be expensive. I have not done much traveling since the start of the pandemic, but plan to ramp back up once I am vaccinated. There are lots of places still on my list to visit. There are many things that I do to cut down on the costs of my vacations.

Put all of your purchases on travel rewards credit cards.

Right now I am focused on building up Chase points. Chase points have some of the highest redemption value for travel. You must be careful when you apply for Chase credit cards because the bank only allows you to have so many open credit cards before they will deny you any new cards. Check out the 5/24 rule.

My goal for the next 3 months to build up Marriott points to get free nights at global hotels. Marriott and Hilton are the 2 largest hotel brands so you can pretty much find one of those hotels in any major city.

If you are going to spending money you might as well be getting rewarded for doing so. The most valuable credit card points for me are the hotel and airline points.

Reduce the cost of your flight and your hotel and this will dramatically cut your travel expenses.

When I travel I do not usually sit on a beach. I stay active. It is so much fun exploring a new city and seeing different sites. The best value for going on excursions that I have found is GetYourGuide.com. I used this when I went to Barcelona and went did 3 different countries in one day. It was great. You can go on long excursions or just find someone to show you around a new city.

2. Clothing

My closet is full of clothes. I am strategic about how I buy clothes, because I want to buy quality, comfort and I want it all to look good. My wardrobe changes my mood. When I put on nicer clothes it makes feel better about work. When I am in shorts and a tank top I just want to relax and not do any work.

Be strategic about how you shop. Do not just browse online or through the mall. Be specific about what you need more of and what you do not need more of. I have a thousand pairs of nice, I do not need anymore nice socks, but I just have a few pairs of jeans. It is smarter for me to get more jeans.

Shop at discount department stores.

My favorite discount departments stores are Neiman’s Last Call, Nordstrom Rack and Dillards Discount Store.

The merchandise in these stores is already marked down. You will have dig through racks to find your right size and style and then try it on to make sure it fits, but there are tons of options. If you go on special sale days you will find items that are even more marked down than usual. Black Friday, Tax Free Day and Spring Sale. On those days they can take another 40-50 percent off making clothes a steal.

Focus on paying more for quality that other people can see. Socks and underwear need to be comfortable, but if you are wearing this everyday it does not need to flashy or expensive. Paying less for this can save you a bundle.

3. Food

Costco

Shopping at Costco. Shopping at this store has saved me a fortune. But not everything at Costco is a deal. There are many items they sell that are the same price as every other store in town.

Create a list of standard items you need. Bottled water, paper towels, coffee. Those items are generally really good prices at Costco. Fruit and veggies are not the best deal here. Those are found at a better price at your local grocery.

Grocery stores weekly ads

There are several grocery stores near my house:
– Walmart
– Kroger
– Aldi

Each store produces new ads each and every week with something that they have on sale. This is where I go to buy fruits and vegetables. These items are seasonal. These items are spoil quickly Like Strawberries. Every week I pick up the add and stock up on the fruit items that are on sale.

This saves me a ton of money. Good fruit can be expensive.

4. Transportation

A car to me is just transportation. It a machine to get me from point A to point B. Also, a car is a depreciating assets. The moment you buy it, it will start to lose value.

I have always driven nice, well maintained used cars. My first car was a Chevrolet Trail Blazer. I learned quickly that I never wanted to drive a red car again. It attracts a lot of unwanted attention. That car taught me a valuable lesson, that I do not need a nice car to be happy.

If anything, a really expensive would add stress to my life. I would obligated to take really good care of the care.

I would rather have my money working for me, than sitting in the driveway losing value.

Buy a nice used car in cash and forget about having a monthly payment.

5. Housing

Housing is the biggest expense you will have, besides children lol.

There are so many different housing options to choose from these days. Do your homework before selecting the place you put down roots.

I have done it all with housing:

  • Apartment with multiple roommates
  • Renting a room in a condo
  • Living with family
  • Rental home
  • And finally, home owner

The best way to save on housing is to split the cost. This can be done by you renting from someone or house hacking.

House hacking is the process of purchasing a property and renting a part of the property in order to pay for your portion of the rent. It is a great way to jumpstart your investment journey.

Today, I own my home. It was a long road to this point. For a long time I thought I would never own a home, because prices are so high and I was not making enough to save for a downpayment.

But if you decide that you want to be a homeowner then there are many ways to get there. You MUST run the numbers. In San Francisco it may not make sense to buy and it would be better to rent. But if you decide to buy, buy much less house than you can afford. Do not just buy the first thing that comes along. Look for the right place and the right price.

My house was purchased undervalue and then I determined that it would be better to make higher mortgage payments to pay off the home and have more money to invest later. You may decide to slow pay your mortgage debt and invest more of that money into the market.

Just try to keep your housing costs to the bare minimum, this will free up more cash for other things.

Cutting these 5 expenses to the bone will give you the capital needed to put toward purchasing assets such as: stocks, bonds, real estate.

The next step is finding the right assets to invest into to reach your financial goals. Stay tuned for that article.

Don’t forget to leave a comment, I read them all.

Published by Collin Harness

Obsessed with creating value and helping people achieve financial independence.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this: