In 2010-11 I paid almost $25,000 in basic bills – home, utilities, clothes, cell phone, etc. This year I am on track to pay almost $14,000 less – for the exact same type of bills.
I did this by slowly changing eight major things in my life over about three years.
I changed my spending habits by instead of continuing to do what I had mindless done previously and/or doing what others had done, are doing and many times would like me to do; I started to choose things that were important to me and for me.
As a reward I don’t have to cough up almost $14,000 that I had to years prior and am still living almost the exact same type and quality of life. I would not be my father’s child if I didn’t mention that saving $13,576 a year also means that I don’t have to earn $17,648 – the pre-tax equivalent of what I am saving. In short this means I could – and did – move from a full-time to a part-time job.
Here is how I did it:
1. Kicked the iCrack HabitIn 2011 I paid $120 a month for my Blackberry through AT&T. Today I pay $66/month ($50 for unlimited text, talk and 500 mb of data + $16 a month for two years for a Samsung Galaxy II) through T-Mobile. I save the data by using local WiFi networks when they are available and my home WiFi network when it is possible.
2010: Paid $1440/year
2013: Pay $792/year
2.The best gym on earth – is on earth
In 2010 I paid $33 a month for a gym membership.
I recently paid $70 for a State Parks Pass. This allows me to give money to something I believe in while I explore the area around me. (Kind of like how being on a treadmill does, right?) I have also used myyogaonline.com for $9.99 a month for unlimited yoga, pilates and meditation classes when it is too freaking cold to want to do anything but stay inside and wear yoga pants.
2010: Paid $396
2013: Paid $70
3. Sold my car lease
In 2011 I was paying $346/month for a lease payment, $140/month for car insurance and about $300 for my yearly registration. I called my financing company to find out how much I owed on the car. I then put the car on Craigslist for that exact amount – and sold it. Now I pay $60 a month in insurance for a car I paid $4ooo cash for.
2010: Paid $6132/year
2013: Will pay $790/year (This is estimating $70 for registration.)
5. Reviewed my credit card bill
Instead of blindly paying my credit card bill every month I started to look at it. (Genius, no?) I found the insurance I cancelled months prior was still being charged to my account. One phone call later, my account was credited $400.
2011: Paid $400 extra
2013: Pay $0 extra
6. Buy $200 jeans for $90 dollars.
You can buy $200 jeans used for $10 to $30 at the secondhand store. You can also buy brand new $200 jeans for $90 dollars on eBay. I started going to Neiman Marcus and Nordstroms, finding the exact jeans I wanted,then found and ordered the exact same jean on eBay for 50%+ cheaper.
2010: Paid $800
2013: Pay $360
7. Let someone else pay my mortgage
I own a house. I just don’t live in it. I first rented it after I accepted a job in Amsterdam. When I returned home I wanted to live less expensively so I let someone else pay the $1250 it costs to live there and found somewhere cheaper. The IRS looks at it as a business expense that I can depreciate over the years as I collect equity in it and allow someone else to eventually pay the entire thing off for me. Now I pay $750 a month in rent.
2011: Paid $15,000 to live
2013: Will pay $9000 to live (and collect equity, tax benefits, etc, etc)
8. Stopped paying for my utilities
I found a place to live that pays for my water (average $15/month) and gas (average $40 – $50 over the year/month). Now I just pay electric.
2010: Paid $660
2013: Will pay approx. $240
With the exception of dealing with the scoundrelous a-holes at cell phone companies, I have found this entire experience fulfilling. What I have found in interviewing others who have gone through similar processes is there an enormous amount of richness and joy in life to be found in thoughtful, pre-meditated spending. I would be surprised if you did not find the same in looking to save and spend money in ways that were meaningful and made sense to you.
I continue to save money by:
- Buying used books from local bookstores.
- Getting 95% of my furniture from friends who just wanted it out of their homes and/or from others who very generously gave it to me. If you were to come over you would see a pretty obvious hole in my living room where something *should* go. Eventually something inexpensive will find its way there. Eventually.
- Buying things such as snowboard boots (recent $200+ pair from Craigslist for $25) and other life necessities from second hand shops and from individuals where there is no reason to buy new – especially when I can get what I need at a 1/10 of the cost.
- Staying away from Groupon, the site a friend recently described as, “The place I go to save money on things that I would have never bought in the first place.”
- Selling everything I do not use which others would find useful on Craigslist.
- Not owning a TV
- Using my credit card (which I pay off every month) to earn points for free plane tickets around the world
- Cleaning our own house, making our own food and going out to dinner when it is going to be a good / special experience and not just because we are too lazy or dumb to think of anything to cook. But sometimes because we are too lazy and dumb to think of anything to cook and well – there is nothing wrong with that either.