You know the old saying: “it takes money to make money”? If you are dead set on reaching your goal of financial independence, you are probably always looking for new ways to save every penny you can to go towards your next investment. But how dedicated are you?
When you live and breathe to attain financial freedom, it takes more than making your morning latte at home instead of stopping at your favorite coffee joint to reach your goal. This lifestyle change may not be for everybody, but if your ultimate ambition is to do what you want instead of slaving away to your 9-to-5 job, keep reading.
This post is about real budgeting techniques that myself and other successful real estate entrepreneurs used to save enough money to jumpstart their career. Not all of them may be the right fit for you, but if you are deeply committed, I recommend that you at least give them a try.
Here is how to start saving for the life you want!
Save on your housing expenses with rent hacking
Before you are in a position to house hack, you can still save big on your living expenses by rent hacking. To do so, you will need to rent a large property in full directly from the landlord, and sublease (or AirBnB) each bedroom so that the rent you perceive covers what you owe your landlord.
Let’s say you find a fabulous three-bedroom apartment for $1,200 a month. You pay $1,200 to the landlord and find subletters for the two other bedrooms for $600 each. This way, the rent you collect from your roommates allows you to live for free. Of course, the more rooms are available to rent, the more money you will likely bring in!
Please note that your landlord must be aware of your plans. Some may be hesitant to get on board with it, but if you can convince the right person, you could easily save hundreds of dollars every month.
Cars are expensive: between monthly payments, gas, parking, and insurance, the costs add up quickly. If you live close enough to work that you can commute by bike or walking, you can save your health, the environment, but also your hard-earned cash.
If walking or biking to work isn’t an option, you can turn your car from a “liability” into an “asset” by renting it on Turo (think AirBnB for cars) when you are not using it. Instead of sitting in your driveway, your vehicle can bring money in faster than you think.
Save on food expenses
Everybody must eat, and food is not something you can eliminate out of your budget entirely. However, it is also an expense that can quickly get out of hand without a little planning and discipline.
It goes without saying that take out and restaurants will easily triple your food budget. So, forget about convenience, and spend a little more time in grocery stores. However, it is not a free pass to blow your paycheck on tempting goodies. Instead, set up (and stick to) a list by planning your meals by using an app like Mealime. A little foresight can save you a lot of time and money by eliminating the guessing and impulse buys.
Buy in bulk
Buying non-perishable items in bulk at a membership store like Costco could save you thousands of dollars in the long run. You can also take your saving journey the extra mile by eating the same meals over and over (I am the living proof that it is doable) and purchasing produce and meat in bulk.
Give vegetarian food a try
Not only is plant-based food good for you, but it is also significantly cheaper than meat. Even going vegetarian for a meal per day will reduce your grocery bill by 15 to 20 per week.
Check if your store gives a discount on damaged goods.
Food has the same nutritional value, whether it could win a beauty contest or not. Many stores have a “dented can” area where you can purchase damaged cans and boxes for a fraction of the original price. Your pantry may not look Instagram-ready, but your wallet will thank you!
As I mentioned above, ditch your car and walk or bike to work instead. It is the best way to turn your morning and evening commute into a workout without setting foot in the gym. Besides, you can also work out in your own time by using programs like Convict Conditioning.
Conceived by former convict Paul Wade, this bodyweight exercise program is designed to help inmates (and anyone who cares to) transform their bodies with minimal space and equipment. No matter how small your apartment is, it is likely bigger than a jail cell.
You can check out his free videos on YouTube.
Extreme budgeting tips for the deeply committed
The tips above should help you save a significant amount of money every month. However, here are some out-of-the-box ideas you can apply every day and save on your utility bills!
Only run the water when necessary
Give the planet and your wallet a break by turning off the water when you are using it. Whether you are taking a shower or brushing your teeth, don’t forget to turn off the faucet unless you need it to get yourself wet or rinse off.
DIY a water-saving toilet tank
All you need to reduce your toilet tank water usage is a one or two-liter bottle. If you want to reduce the volume of water required to fill up the toilet tank – and flush your cash down the drain – fill up the bottle with some rocks and water before putting it down the tank.
Forget about your dryer
Clothes dryers use a massive amount of energy. Hang your clothes to dry instead. Not only will you save money, but your clothes will also last longer. On a beautiful day, your clothes will be dry within a couple of hours.
Unplug your electronics
Only plug in your electric devices when in use. Even in “sleeping” mode, your TV, appliances, etc. still use a significant amount of energy when plugged in. You could significantly reduce your electricity bill with this simple reflex.
Two for one
You could make things last twice as long by merely dividing them. Take sponges, for example. By cutting them in half, you can double your usage. What else can you make last?
Dilute where needed
Now that you know how to make the most out of your sponges, you can also spare some money on soap! Dilute it with water and keep it in a small bowl (along with your little sponges!) by the sink.
Here you go! These fourteen tips on how to save money in small and big ways are easily applicable. By keeping at it and never losing sight of your goal, you could be on your way to purchase your next investment property in no time. What are some other ways you can save money every day?