Creative Ways to Save

A penny saved is a penny earned as the old saying goes... The reality is it's actually more like 1.3 pennies earned because you can only spend what's left after Uncle Sam takes his share! Now a penny saved and then invested is a Dime earned in 30 years. Here's a few tactics and strategies to make sure you have those dimes adding up!

Although I don't subscribe to the idea that everyone needs to budget in order to have early FI. I do have tactics and strategies in place to minimize my expenses and maximize the impact my purchases have day to day for myself and my family.

The two primary ways I've used to keep my expenses as low as possible without following a strict budget have been with primer questions and my semi-annual cost reduction reviews. Here are the tactics behind both.

Primer Questions

Asking better questions can dramatically improve ones life and in the realm of FI here are the questions I pose to myself prior to purchasing random stuff. I've found this has been able to sharpen my view on if its something I just don't need or truly don't add value to my life and it's helped me pump the breaks when I'm really itching to supersize my lifestyle.

"Less is More, do I really need this?" - it's surprising how this can keep you spending less and yet be happier in so many ways.
"A month after purchasing this, will I still be as excited about it as I am now?" - This weeds out the items that aren't really important to you and keeps you from making impulse purchases.
"Is there a better, or cheaper way to accomplish the same goal? - If I'm going to get someone, be it for my shop or lifestyle, I really want the best. This keeps you from having to make the initial purchase and then a follow up down the road. If you need it, and you're going to use it all the time, get the best solution possible - don't settle.
"What problem does this really solve and are there better ways of solving it?" - Is the tattoo something you really want or are you just craving a way to have more self expression day to day. Do you need that Starbucks or are you just a little bored and want to get out of the house. I love this question because its not uncommon to have a head-fake on why you actual try to purchase something.
"What if I didn't buy this, how could my life be better right now?" - For the big ticket items I've found this one to be extremely useful. For years I considered buying and/or leasing a new F150 Lariat. I didn't have a true need for a $60k workhorse and this question helped me refocus on what really mattered in the moment. My alternative has been moving away from a much car travel as possible in Michigan. I try walking and biking to local stores and we now get our groceries shipped to the house weekly. During the pandemic I've even been able to shut off my car insurance because I simply don't drive the vehicle I do have.
"Does this get me closer to, or further from my major goals?" In some cases, the purchase is negligible but when you're really trying to push your percent FI Fund allocation up this can help you focus on what matters most.

Semi-Annual Cost Reduction Reviews

This one is pretty straight forwards. Simply mark you calendar for a 4 hour review of every major expense planned in the future and for all of your recurring monthly expenses. As you comb through items like car insurance, mortgage payments, cell phone bills, utility bills, and your subscriptions you need to check your assumption that you're getting the best price possible. In many cases, you won't have the most competitive prices, especially if this is your first foray into this type of review.

I've found that more often than not, your current monthly service providers will be willing to offer discounts just to keep your business, all you have to do is ask! Play hard ball and see just how motivated they get to keep you as a customer. This will more than likely be the most financially beneficial 4 hours of the year.

You Earned it, keep it around awhile!

It's always easier to spend your money than it is to make money. By approaching your spending with Primer questions and seeking semi-annual cost reductions its been able to help me filter the wheat from the chaff. On your path to FI, the dimes and dollars you need down the road are found in the pennies saved today.