Design your life to include more money, health and happiness with less stuff, space and energy.

Design your life to include more money, health and happiness with less stuff, space and energy.

6 Ways to Spend Less and Have More

Life can be expensive. But as we’ve seen before, our fortunes are not merely the function of income and market rates. How and what we spend our money on can alternately build or erode our personal fortunes. Oftentimes, little changes can yield high returns with virtually no hit to the quality of our lives.

Here are a few easy ways to save a ton while maintaining–and sometimes improving–quality of life:

  1. Health insurance. We realize this is a bit of a firebrand issue, but paying for health insurance can swallow up a significant part of our incomes. Even with the ACA marketplace, monthly premiums can easily exceed $300/month. If you’re relatively healthy, consider a high-deductible health plan (HDHP), which typically runs between $100-200/month. If a health crisis occurs, you will be covered. Keep a prudent reserve in your savings account and pay out-of-pocket for routine visits. If you make three visits per year that average $300 each (factoring in some money for drugs, blood-work, etc), and you’re saving $200-300 per month with your HDHP, the yearly savings can be $1200 plus. Take a look at Mr Money Mustache for some more guidance on this matter. If you need an HMO or more comprehensive care, check to see if there are state-subsidized programs that provide discounts.
  2. Transportation. The average American spends around $300 in auto-related expenses per month. Consider moving to a more walkable area, closer to your work and amenities to save money. Even if properties are more expensive–and they usually are–that can be offset by reducing or eliminating automobile-related expenditures. Even if it’s a wash, still consider the walkable home; studies have shown that people who live in more walkable areas are healthier, happier and more community minded than their long-commuting brethren.
  3. Credit card interest. The average person carrying credit card debt carries $15K worth of interest bearing debt. With credit card interests rates hovering around 13-15%, you could be spending in excess of $2K a month in interest alone. If you have any credit card debt, make it your life’s mission to get rid of it: transfer debt to lower interest loan like a home equity line of credit or flip to another card with promotional rates so you can chip away at the principle without insidious rates. Talk to a financial professional. Do whatever you can to stop bleeding money on this senseless expenditure.
  4. Restaurants. The average American spends $181 on about 12-15 restaurant meals per month, or $12/meal. Compare that to the $281 spent monthly on other food. 30 meals per month (i.e. 3 meals per day multiplied by 30 days minus 15 restaurant meals) divided by $281 is $3.75/meal. That’s a 70% savings! Making your meals tends to be much healthier as well. Also, consider an eating out allowance. Eating out can lose its appeal when done too much. Putting a cap on the expense and frequency of eating out can make it feel like an occasion again.
  5. Coffee. A few facts: Coffee is an $18B industry in the US. The average espresso drink costs $2.45. The average American worker spends $1100 on coffee annually. We won’t even suggest that you stop drinking coffee, but making it yourself can save a ton of dough. To illustrate, a premium pound of beans is about $15/lb. A nice thermal mug is $20. Supposing you go through a pound a week, that’s a $300 annual savings factoring in the mug. If you get less expensive beans, all the cheaper. Cut back on coffee consumption, cheaper still.
  6. Bottled water. The average American will consume and dispose of 167 plastic bottles in a year, of which 23% will be recycled. The water inside costs, on average, $7.50/gallon–2000 times more than tap! There’s little way around it: bottled water simply makes horrible environmental and economic sense. Invest in a nice canteen and water filtration system and BYOW. Your pocket book and planet will thank you.

Where do you save money? Let us know tips and strategies in our comments section.

Open Treasure Chest image via Shutterstock

Facts via Statistic Brain

  • Dom

    I appreciate the idea above, but I think the math is a bit off for #s 4 and 5.

    4 – $281 for non-restaurant food divided by 75 meals (3 meals/day x 30 days – 15 restaurant meals) = $3.75/meal for non-restaurant food, an even better deal than you portray.

    5 – A pound of coffee a week is a lot go through. A pound should yield 16 16oz cups of coffee, or 20ish double espressos. This also makes it an even better deal than you portray.

    • David Friedlander

      math corrected. holding tight on coffee stat though. average coffee drinker consumes about 27 oz / day. your 16 x 16 oz stat yields 36 oz / day. factor in a few social coffees and you’re at that number easily. thanks!

  • Elaine Axten

    I don’t know if this translates over the pond, but the taste of tapwater in London UK is foul. This is largely because of added chlorine. There’s a really easy workaround on this, which is to use a jug and keep it topped up. Over a short time the chlorine evaporates and the taste from the jug is good. This saves money and the planet.

    • David Friedlander

      poor tap water occurred to me. i’d say the bulk of our readers have water that’s good enough that, if filtered, would be of comparable quality to bottled water.

      • Elaine Axten

        I don’t bother to filter. The cleanliness of our water is absolutely fine, just the taste straight out of the tap.

        • Paul Stanley

          Filters (such as ones made by Brita) filter the chlorine and chalk from the water (in fact thats all they really do). So they are ideal for people that live in London.

          • Steado

            There is a bit of a debate in Australia at the moment about tap water and addition of fluoride … some local councils have stopped adding after it was put to a vote with constituents / impact has been that kids in particular have had material increases in tooth decay and in some areas the practice has been reverse … so picking up the point of your article drinking tap water with fluoride will reduce your dentist bills as well.

  • Brad

    Housing is of course a big potential area for savings: the big bucks savings come from buying less than you can afford, buying energy-efficient appliances, and using energy frugally. Cars are next: we live in a walkable city with good public tranport, so our costs are usually below the $300/month you cite above, but our car is getting old now (8 years) and the repairs are getting expensive. Last year I spent $4,000 on the car including registration, fuel, insurance, repairs and maintenance, and new snow tires. I looked at what we would have paid if we’d gotten rid of our car and used a car-share service (similar to Zipcar) instead for all the miles we drove, and it came out to a little over $400. That’s a tenfold difference. The other thing is that as I get closer to retirement, I look at the price of a new or a 2-3-year-old used car and it basically represents a year’s worth of retirement for me. if I buy a new car, I’ll have to delay my retirement for a year.

    As for other ideas, a big one is finding hobbies and entertainment options that don’t cost money. We’ve been living in our city for 11 years now and have gone out to the movies three times, seen four concerts, one opera, and one play at the theatre. But we’re never bored, and we lead very rich and full busy lives. We make our own music, cook our own meals, take bicycling vacations, go for long walks, look at the night sky, watch birds and work in our garden.

  • Paul Stanley

    “The average person carrying credit card debt carries $15K worth of
    interest bearing debt. With credit card interests rates hovering around
    13-15%, you could be spending in excess of $2K a month in interest

    Err is this really true in the US? Think your maths might be out on this one as well. Cos usually interest rates are quoted for the year not the month! 😉

    • KB

      I think they meant 2k per year

  • barbarainwyoming

    I LOVE Mr Money Mustache! More links to him, please!

  • Where do I save? I live alone in a warm climate (Honolulu) and don’t work at home. I turn off my hot water heater when I don’t need hot water. With twenty minutes lead time, I have hot water. If the water is still hot when I turn off the heater, i still have hot water 24 hours later. Cut my electric bill >>>30%<<<.

  • CHP

    PS: only tap water for me! It’ serially good in Switzerland, so I am lucky