A question that my husband Thom and I get every now and then is: “Are you guys independently wealthy or did your parents leave you a bunch of money?” The answer to both of them is “No!” As I’ve written before, both of us grew up in blue-collar households and we’ve been self-employed our entire lives. We’ve never once received financial assistance, unemployment benefits or won the lottery. Regardless of whether it sometimes look like we live the life of leisure, let me assure you, we’ve earned everything we have. It wasn’t always easy, and we made a bunch of mistakes early on, but fortunately, that’s changed. Along the way, we picked up some SMART and frugal practices that helped us hang on to much of the money we make. Now we use our money to do things we enjoy, and support people and projects we believe are worthy. I’m convinced we all have the potential to do the same.
Here are ten ways to save money and enjoy peace of mind:
#1 Go debt-free.
Yes, it is possible. And according to Survey.com, up to 20% of U.S. adults are completely debt free. Being completely debt free means that you don’t have a balance on your credit card, a car loan, a student loan, or any other debt. Best of all is when you have no mortgage on your home.
I get that it’s not easy for everyone, but this step was the most important thing Thom and I have done to be financially secure. When we rightsized our lives, moved into a house and neighborhood that easily fit our finances, we found a freedom that the truly wealthy usually enjoy. Trust me, it is worth all the effort.
#2 Live Below Your Means
Thom and I didn’t always live below our means. Like most Baby-Boomers, we grew up thinking more was always better, and going bigger the solution to everything. Thankfully, after many years of debt and hand-to-mouth living, we began to realize that the weight of trying to keep up with a lifestyle that exceeded our income wasn’t worth the stress. When we tailored back on our needs and expectations, we discovered that most of the time we didn’t really want all that stuff anyway.
Gradually we learned to focus on the things in life that we really enjoyed most. Things like freedom, travel, spending time with each other and friends and more, didn’t really cost that much. Instead of buying things, we learned to embrace experiences that made us happy. We stopped trying to “buy” happiness and instead let it wash over us in the simple and everyday experiences in our lives.
#3 Make Choices From A Place Of Peace of Mind Rather Than Fear
Many people, ourselves included when we were younger, make choices from a place of fear. Of course, people don’t like to call it fear, but when you get right down to it, fear is guiding their decisions. What kind of fear am I talking about?
- Buying an overly expensive car because you are concerned about how other perceive your “image.”
- Insisting you have to live in a certain house or neighborhood regardless of whether you can afford it.
- Doing things for your kids or your family that hurt you financially because you fear those people will stop loving you if you do.
- Going to an expensive college for your degree with an enormous student loan because someone told you that that is the only way you’ll get a decent job after graduation.
While some of these choices might be beneficial, if you are doing them out of fear rather than conscious choice, you will likely find that the “price” is much higher than expected.
#4 Keep Your Eye On The Prize
Let’s face it, every single day we see dozens of beautiful, desirable and interesting things we can do and buy. If we lose site of our intention to be debt free and live with peace of mind (the REAL prize), we might find ourselves forgetting what is important and end up buying everything in front of us. Stay focused.
#5 Develop Habits That Help You Choose & Save
Learning to embrace habits that not only help you save but also help you avoid spending in the first place, will serve you for the rest of your life. According to the September 2016 issue of Money Magazine, “a full 78% of millionaires cite frugality as a reason for their success.” When we learn to carefully monitor our money, it becomes a habit that gets easier the longer we live.
#6 Plug Your Money Leaks
According to that same Money Magazine article, “two-thirds of would-be exercisers never use their gym membership.” In other words, don’t sign up for things you will likely never use. Go through all your bills and credit cards and locate things you signed up for and never use. Things like a $30/month credit monitoring service, movie channels you never watch, or fees for travel rewards can easily be eliminated and save you money.
#7 Never Hesitate To Renegotiate
Last year when it came time to renew our health insurance I found by shopping around that I could save $300 a month (Yes! That works out to $3,600/year!) just by switching insurance. I also saved $60/month on my cell phone bill. Sure, it takes time and is sometimes a hassle, but the money you save when you renegotiate or shop services can be significant.
#8 Stop Going Out To Eat Frequently
I know people who make far less income than Thom and me who go out to eat nearly every night of the week. When they say they can’t seem to save money, I don’t even know how to respond. Not only will you save a great deal of money by eating at home, in most cases it is far healthier for your waistline, your overall health, AND your finances.
#9 Learn To Do Things For Yourself
I realize that not all of us have skills and talents to do certain things around the home or in our lives. But I also recognize that many times people will still hire out some of the most basic services rather than do it themselves. And why not try to learn? Where I live in California nearly everyone has a gardener. We did too until we decided to put in low maintenance desert landscaping and do it ourselves.
#10 Stop Using Your Hard and Long Hours At Work to Treat Yourself To Things You Don’t Need
I have friends who work literally like slaves at jobs they barely like. But because they do, they use those jobs as excuses to buy things for themselves (and others) to make themselves feel better. One friend leased a brand new expensive car for $800/month and then complained that he couldn’t quit because of that car. That’s a choice, not a requirement. I have other friends who go out to eat nearly every night. They say they do it because they are too tired to cook. Why not find a job with fewer hours and spend the time cooking and being with friends and family? Most of the money excuses people use make them slaves to a lifestyle they really don’t need.
BONUS TIP: Learn the Value Of Delayed Gratification.
Learning to resist the temptation offered in the present moment for a larger and more enduring reward in the future is one sure indication that we are well on our way to living a rich and more peaceful lifestyle. As the famous “Marshmallow Experiment” proved back in the 1970s, those children who could resist a marshmallow for a short time in return for the promise of more in the near future, grew up to live the most successful lives 40 years later. Anyone hoping to live well, peaceful, healthy and happy in the future must learn this important practice.
Of course, my strongest suggestion is to stay conscious about how, when and where we spend the money we devote the hours of our day generating. And ultimately, working at any job just to produce large sums of money but not having the time, energy or freedom to live your life is not SMART. Never loose sight of the fact that there are things each of us can do to reduce the stress that comes from debt and overspending. And no matter what, it is SMART to remember that peace of mind makes us wealthier than any amount of money.