60 Seconds to Trim Your Spending

Food and gas price are raising while your salary stay the same or on the verge of losing your job. Although there are signs of economic recovery recently, but job market won’t stabilized until late 2010 as many economists expected. Whether you have a job or not right now, trimming your spending will be a great idea for the long run for yourself or your family. You probably have no idea where all the money go when you added a couple of thousand dollar in your credit card. The best way to do is distinguishing spending in a way to spend in the areas you choose and cut back in categories that aren’t important to you.

Even superstar Britney Spears knows how much she spent in 2007 and starting to cut back spending. She apparently keeps track of her spending better than most of us. Link

You probably just need 60 second to read the followings:

- Clothes, shoes, bags: I don’t need the latest fashion, I buy new clothes only when the old ones wear out. If you frequently shop for clothes, you may want to want to cut back in quantity or less frequently. Maybe it is time to hold yourself back from stores like Gucci and LV or start buying non-brand clothing. I like nice clothes, but I can always find them at NY&C or H&M on sale with coupons. Tips: Matching purses to go with every outfit.

- Transportation: Sure I could pay a hundred dollars a month in gas, and several hundred dollars for parking but I’d much rather take the bus. Now I don’t drive a lot unless for work. I remember one of my friend got a big violation parking ticket for $75 the day he got fired from work, he almost kill himself that day.

- Frequent hair cuts: I usually get a haircut every 2-3 month. The haircuts are expensive-ish, but the fact that I don’t get them very often saves money. And they’re nice.

- Cable, satellite, TiVo: Seeing shows the moment they air. I watch most of my TV online, for free. I usually get the same quality, and I just have to wait for the next day.

- iPhone, texting, data plans. Why do I need the Internet on my phone when I’m at the computer all the time? Why would I text someone when I can call them up and talk to them? I refuse to buy an iPhone or a Kindle until I know they’ll actually improve my quality of life measurably. $300 over a phone is big spending decision to me. Think about the iPhone and other overpriced gadgets. The average iPhone bill runs about 80 to 100 $ a month. That is a wastage of about $1,000 over the year!

- A fancy car: If you do not know if you will have a job next month, why would any person buy a car? While your company is losing money which means there is a possibility you will get layoff. You don’t want to buy a new $40,000 car in a recession.

- Expensive Furniture: everything I own was IKEA’d or given to me, except for a small wood/glass coffee table I got for $5 at a garage sale. If you used to buy expensive furniture to decorate your room, maybe you can start look for cheaper ones for a change. You might be a victim of loss aversion or the sunk cost fallacy if you make important spending decision based on how much you’ve already spent.

- Types of flights: I’ll grab the lowest price even if there are several stops etc

- Movies/clubbing/drinking: Pre-party at the crib before you go out and bring a flask. Happy Hour is fun, but doing it for years is gay. I live in Boston, where fun is free—or at least cheap. I’ll pay for drinks now and again, but overall I spend little in this area.

- House: If you’re caught between whether to buy a house or not, I suggest you to rent. You can save more money for a nicer home while you can keep plenty of cash for emergency like losing a job or accidents. It is always good to have more cash in hand in a recession.

- Dining: Get real! You need to experience life. I cook at home, bring my lunch to work, and save restaurants for special occasions. Drink water instead of liquor and you’ll save more money. You may not realize the small spending like buying a beverage or junk foods, you have to remember “one dollar here, and one dollar there, pretty soon we’re talking about the real money.”

- Books/magazines: That’s what the library is for. I only buy what I know I’ll read repeatedly. It’s a matter of both money and space.

- Gifts: My family is just as happy with a $50 gift as something more expensive. For hostess gifts, a $15 bottle of wine tied with a nice ribbon is just as good as a $45 one. Maybe I’m the reincarnation of scrooge, but I never got the rationale for going into debt over gift/holiday shopping.

- Coffee drinks: I used to buy an ice latte from starbucks every morning, but now I can make it myself at home, it tastes just as good as they make.

- Debts/Mortgage: “Think about it this way. If your friend were in trouble because he had too much debt, would you encourage him to take on even more? Wouldn’t a real sign of progress be a reduction of debt, even if he had to cut back on his everyday expenses?” - By Peter Schiff. If you’ve saved some extra cash from doing above, repaying your card card debt in full can avoid accumulated interest fee.

- Pedicure, manicures, massages: NO NO NO. I just bought a $59.99 massage device for myself. It is good enough.

There are many ways to save money. People range from simply buying a cheaper brand of something to not buying at all and making do. Be creative and keep your goal in mind, and before you know it, you can find ways to save everyday.

Alex Mai

Related Posts:

• 10% unemployment, huh?
• US Job Losses May Exceed Already Gloomy Forecasts
• This recession will be the longest and worst ever– (already been 12 months)
• One wrong move, and the entire thing could come crashing down.
• Still spending money you don’t have America, oh, will you ever learn?

Comments

Leave a comment