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:
- 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.
- 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.
- 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.
- 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.
- 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.
- 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