Hitting Financial Independence takes more than just earning a lot of money, you need to save a lot too. For many of us, in order to save a lot, it means you need to adjust your lifestyle and look for deals everywhere to ensure you maximize every dollar.
This list (in no particular order) highlights some of the things I have found that helps to save me money and ensure a frugal lifestyle.
If you have found something that is not mentioned, feel free to leave a comment.
Cheap Mobile Internet – and a tax write-off!
Anyone living off grid has likely encountered the problem of how to get reliable Internet.
- “Unlimited” cell phone plans are expensive, and often rate-limit you after a certain amount of usage
- Satellite Internet providers have a lot of latency, and dont “officially” support being mobile, and don’t work on a boat.
- True mobile satellite providers have extremely expensive equipment fees (25 grand for a boat friendly antenna) and can run thousands per month for mediocre speeds.
Enter “Calyx” – https://calyxinstitute.org/membership/internet
So how does this work?
Long story short, you can make a tax deductible donation to Calyx and get a hotspot which offers genuinely unlimited internet via 4g or 5g (if in service). I’ve been testing it over my work PC and have been able to consistently get 200-300 gigs of data with no rate-limiting.
There is an initial deposit which is a bit steep to get the hotspot but that includes equipment and service for a year, and afterwards you pay a maximum of $500 a year (about $40 a month) for their best 4g and 5g plan.
What I like about it:
- Affordable for genuinely mobile/wireless 4G/5G with no slow downs.
- Most of the donation (after the first year) is a tax write-off, meaning its even cheaper.
What I don’t like about it:
- The hotspot batteries are not the best – If you leave it plugged in all the time they go bad (swell up like a balloon) after a few months. I’ve found adding a mechanical plug-in timer that switches the power off every night for a few hours, forcing it to drain the batteries, helps extend them tremendously.
- This is minor, but the hotspot software is a little “wonky” and maybe once every week, or every other week I need to reload it to get it working correctly again (no service).
- Limited warranty and support. I’ve had an earlier model of their hotspot fail on me and trying to troubleshoot and get support was a bit limited. eventually, it was determined the unit was bad, and I was on the hook for buying a new one.
Overall, having tested it for a number of months now – I recommend it and will plan on making it my primary source of connectivity once I move aboard.
(not sponsored & no kickbacks, just a genuine endorsement)
Completely Avoid “Buy Now – Pay Later” – No Exceptions
Over 60% of individuals between 18 and 44 have used “Buy now, Pay later” in the past year, and sadly that stat is growing.
My advice: Completely avoid any “Buy now – Pay later” options. No exceptions. This is debt, and debt needs to be avoided.
I think a big part of this adoption is the result of mental gymnastics that go along with saving, and spending money. For example – why pay $100 now, and be $100 short for a couple weeks or months when you can just pay $25 a month for the next four months interest free?! Lets face it, anything can happen in the next couple of weeks where you might need that money, and its better to have it and not need it, vs. need it and not have it.
I suspect these are the top reasons in favor of it…
- The “ouch” that comes from $25 spent vs. $100 is smaller, so it doesn’t feel as bad, and spread across multiple weeks or months further softens the blow of what you are really spending.
- It gives the feeling you still have more money (at least for some time) which gives people more comfort.
- Its easy to use, and has a low barrier of entry (no credit checks, perceived interest, etc)
But there are some other things that should be setting off alarm bells. No company exists to lose money – otherwise they wont be a company for long. This means they must be making money in order to exist, and at the time of this writing BNPL is considered a $100,000,000,000 (one hundred billion dollar) industry.
The reality:
Part of the way they make money is via merchant fees. The merchant doesn’t want to lose money, so they just pass that to the consumer in the form of higher pricing – So you are paying more anyway.
Second, an estimated 40% of people have made at least one late payment. Even without counting late payment fees (since some dont necessarily charge them) only 43% of the loans are 0% interest. This means more than half of all loans charge interest, and at least 3 to 4 in 10 people are expected to have at least one late payment – Which combined translates to free money for the provider given they are essentially providing hard money loans with a few week to few month loan term.
Looking further into what actually gets purchased, I thought maybe it was things like food, utilities, shelter…the basic necessities of life all people need.
NOPE.
A survey by LendingTree shows 29% of users purchased Jewelry on BNPL. 27% got a loan for Tech-related items, and another 21% on “accessories”. It even goes all the way down to toys (13%) and Travel (8%). Highest on the list? at least 1 in 3 people purchased clothing (38%) or shoes (34%) using BNPL, and given the previous statistics I tend to think this is more frivolous spending, not need based.
Fact is – Life is easier when you don’t have payments. Its easier to save for an emergency fund or simply buy something outright knowing you wont need to deal with the math of saving vs. income later on. If you lose an income stream, you don’t need to worry about missed payments or needing to make even more money to pay off what you already spent. Don’t fall victim to the hype, its not in your best long term financial interest.
Track Your Spending! (For real)
Read this through before you skip, because I know every finance blog you read has the dreaded word: Budget
I too, ignored their advice for years and simply followed my plan of “if I have enough in my account, I can buy it” and sort of lazily tried to keep a general idea of where my money was going.
It sounds silly, and admittedly is a bit painful at first, but I have since become a firm believer of actually writing down and tracking your income, expenses, savings, and basically anything else you can when it comes to money. Graph it out, make a chart, or simply have the actual numbers somewhere so you can figure out whats going on.
The reason I believe in this so strongly is because of how surprised I was to discover how drastic my spending was when it was ‘in my head’ vs. ‘reality’.
You can use a free version of excel under the openoffice software suite to open files like a CSV (comma separated value) of your bank or credit card transactions to quickly sort through everything and start classifying it.
As you start to sort through things the major categories you use should become apparent. For me it was Amazon, Groceries, and utilities, in the top 3 after my mortgage. As time goes on you can split it further based on your spending. For instance how much really goes to restaurants or the local shopping center vs. back into your brokerage account.
Honestly, if you have never done it before, I guarantee you will find the process enlightening and hopefully motivating to change your behaviors for the better.
Some goals I recommend you keep based on my own experience:
- Expenses only mapped in a Pie chart (and possibly a linear graph)
- Net Worth (and outstanding liabilities, aka: debt)
- Goal Overlays on each for targeted cutting or savings
Starting with just your expenses helped me to visualize where my money was going (and often wasted) and helped start the motivation to keep track of it better. A pie chart is a great way to visualize this, but I also think if you are creative enough to get a line chart in there over time you can more easily see if you are trending up or down in any one category, which can greatly help motivation.
The net worth tracker for me provides a once a month “win” and just enough of a dopamine hit to keep the long struggle going. Once a month on the first of the month I sit down and add up the value of all my assets on that day (for stocks, where they closed at the end of the day).
FIRE is about maintaining momentum in the face of seemingly nothing changing, and seeing once a month my numbers creep ever higher provides me enough of a push to keep things going for a little while longer. Having little celebrations for milestones like 100k, 250k, 500K, etc. are great ways to keep up the momentum as well.
Finally, the overlays of goals, either to reduce spending or hit a certain number are also useful for providing the what and the why behind maintaining the lifestyle. Financial Independence is a marathon, and not a sprint, so you need everything you can to help keep you motivated and accountable for the long term.
Search “Open Source” for anything involving software
Modern conveniences today almost always require some sort of software.
Have a computer? You need an operating system.
Want to work on spreadsheets? You need some software.
Want to edit photos, video, or audio? yet again, you need some more software.
Traditionally, many companies have come to our “rescue” for a nominal fee. Microsoft is known for providing our operating systems and office related software, and others like Adobe Photoshop have a complex, and very expensive software suite that has since gone to subscriptions to maximize even more revenue for them.
Next time you think you need one of these, do a search with “…open source” appended to your query.
Some of the more common ones include:
- Openoffice for replacing the MS office suite (like excel, powerpoint, word, etc)
- Gimp for replacing Adobe Photoshop
- Mozilla Thunderbird for replacing MS Outlook as an email client
You can also see whats out there by checking out sites like sourceforge.net.
Avoid Subscriptions
It has gotten ridiculous, nearly everything has a subscription and its quite easy for them to get out of hand.
The myriad of commercials I’ve seen recently desperately trying to pull you in look something like this
– Don’t want to shop for groceries but don’t want to eat out? Subscribe to food!
– Don’t want to try new wines? Subscribe to them!
– Spend a lot of time sitting on the couch with nothing to do? Subscribe to multiple streaming services to pass the time
…and its only getting worse.
As things become more expensive I suspect even bigger ticket items like Cars and boats will become subscription services.
Fact is – Nobody running these businesses is losing money, they make it, and make a lot more of it over you just buying the service outright. Subscription-creep is real and when you make a budget, pay close attention to what subscriptions you have, and make them earn their place. Otherwise, if its not something you rely on and cannot truly live without, cut it.
Simply put – Avoid them, and make sure they are only absolutely necessary.
Cheaper (Almost expired) Groceries
This one is specific to meats and sometimes cheeses (things that tend to expire relatively fast) Aside from clipping coupons (which I still do where possible) another tip I picked up was going to the grocery store on the weekend and looking at when the bulk of the meat items expired. In my case the local Harris Teeter often had many meat products expiring on the following Tuesday or Wednesday.
Knowing this, I would frequently stop in after work on a Tuesday evening and try and find the yellow stickers indicating a one-time mark down from previous prices. Everything from trays of giant chicken wings to seafood and crab cakes, to whole chickens or pork products. I’d fill my cart with nearly everything I could and freeze what I couldn’t eat when I got home.
Immediately before freezing it would also be great to do a meal-prep for the next few weeks if I had a lot being frozen. I could grind up pork and spices to make sausage, make multiple cuts off a chicken breaded and ready for frying or just break things into smaller portions for consuming during the week. In a time when grocery prices are out of control, I found this to be a very useful option to control some of the more expensive items like meat.
Slightly related – Another useful platitude I heard (but dont remember who to give credit to) was not to buy the in-season veggies you enjoy, but also to find a way to enjoy the in-season ones you normally would not. Essentially – Find a way to like it so when the opportunity comes, you can buy the in season stuff and still get a good meal out of it.
Before adopting this method I used to hate onions. I still dont like them raw, but would actively avoid them whenever possible. But after trying to cook them down and really caramelize them, cook out the water, and get them soft, I now find myself adding them to everything. I can go through 5 or 10 lbs between grocery store trips.
Alternatives to Paper Towels
This isn’t going to be a game changer on the saving money front, but if you are like me you may go through a lot of paper towels and have noticed the prices are climbing quite dramatically and you want to make every dollar count.
Ignoring the paper towel math of mega vs super vs regular rolls and how many of each there are (all of which make it harder to determine if you are getting your monies worth) which is an entire days rant in itself – the fact is paper towels are just so handy!
Most of my use with them is around cleaning, cooking and things that in theory, are not necessarily single use. Granted if I am changing the oil in my truck and want to clean up some drips and spills then this is a good candidate scenario for the trash. But most of their use cases are just because I need to wipe up something.
The solution? Get some cheap cloth towels and a small trash bin to keep the used ones in. The initial purchase is going to cost about the same as the 8-12 roll of paper towels ($20-$30). The dedicated trash bin is so you just wait until you have a bunch of dirty ones and then throw them in their own wash cycle. You can go extra on the bleach or detergent if so inclined but ultimately I have found them to be extremely useful for most of the cooking and cleaning related messes I make.
I still feel guilty “ruining” some for things like oil changes or dealing with anything that stains and wont clean up well, so I use the occasional paper towel instead, but I’d estimate I go through one small package of paper towels a year now were as before I was buying one every few months.
Bulk Discount Spices
As someone who cooks at home for nearly all of my meals, I’ve found my game is really “upped” with the over-use of common spices. Basically any time a recipe calls for X amount of something, I am likely do double or triple it for the spices I enjoy (see garlic and rosemary). Not to mention for nearly all of recorded history spices were a luxury reserved for the ultra rich – so why not enjoy something that thousands of your ancestors before you only dreamed about.
The problem I have found is that those little 2 oz jars at the supermarket add up quick when you are the type who likes to over-do it a bit on the common spices. When making my own bread I love to add rosemary and basil into the dough to help give it a nice spice and aroma, but it always felt wasteful to pour nearly the entire bottle into the dough ball I was mixing.
I’ve estimated hundreds of dollars have been saved by simply buying common spices in bulk either from Indian, Mexican, or Asian supermarkets, or if I cant find what I want simply getting it from amazon.
Things like granulated garlic are very cheap in 5 lb bags and can easily refill a standard 2oz shaker a hundred times over. Not to mention, you feel less guilty using it and are more willing to put in a bit extra.
Even if you like the mixes (hell, I do too) the 21oz containers still offer a world of savings and wont make you feel guilty over-indulging every now and then.
DIY Extra Insulation
This is one for homeowners who just bought a house, or are planning on living in their current one for a few more years. Ask yourself: What is your average heading/cooling bill? $150? $200? $300 or more?
I live in the south, which means for 4-5 months out of the year my AC units are getting a workout and during heat waves I can easily see $250-300 bills because I like things cold. I will get a month or two of nice “room temperature” weather in spring and fall before it goes the other direction and starts becoming too cold.
The first thing I did was walk around all the HVAC systems with a roll of metal tape and felt for leaks and areas where hot/cold air was leaking into the ceiling or garage and closed them off. Generally speaking it wont be much, but considering the roll of tape is only a few dollars and this is going to be a 10+ year return in many cases its worth it.
Next – One of the largest sources of temperature loss is through your ceiling. Yet if you look up there, how thick is the insulation? If you can see the wood that your ceiling below is attached to, there is a good chance adding insulation will increase your efficiency enough to matter, or at least be noticeable.
The gotcha here is that a lot of this depends on your physical address and climate, and how well insulated you already are. additional insulation does have diminishing returns so this one is a bit harder to quantify. Ideally, I try and keep at least 14-16″ of the blown fluffy stuff in my attic to help keep the best of both worlds.
At the time I purchased my home (and I believe this is still ongoing) you could buy several bundles/blocks of blown in insulation and get a free blower rental from places like Home Depot. The bundles are $15-20 each and for under $1,000 you could completely load a pickup truck to the brim. For the installation, Its best done with a friend, but in the matter of a few hours on a cool day as one person feeds and the other handles the hose, you can blow insulation into all the various nooks and crannies in your attic, and build everything up to a nice 15 or so inches.
Even if it knocks 10% off your bill (say $30 from 300 if you are like me) it’ll pay for itself in a few years, and over the course of 5-10 will end up saving you a few bucks.
Its a little harder to plan or install after the fact, but having tall trees to keep your house in the shade is a great natural way to lower your energy bills a bit more than normal.