The original big picture thinker
The idea of saving money isn’t a new concept by any means. Back in the 17th century there was an expression that sounded something like:
A penny spar’d is twice got.
In more familiar terms, which I’m sure you’ve heard, this translates to: “A penny saved is a penny earned.” I personally prefer the former. It just sounds cooler, like something a pirate would say. Aarrghh!
Although the penny still exists and is still minted (for whatever reason) it’s value has significantly decreased over the years, which renders the above expression near pointless. But the concept applies now and much as ever, no matter what denomination of currency is in question.
There isn’t a person alive in America today that would brag about saving $.01, no matter how small the purchase. Mobs don’t rush the stores when they see that a gallon of milk is on sale from $3.99 to $3.98. It’s just not a reasonable mindset as your time and energy are worth more than the lone saved cent. Take the concept further, though.
Last year I had about 1200 separate transactions (according to Mint), which includes groceries, mortgage and utility payments, as well as daycare, gas, and everything else. What if I could save an average of $1 on every single transaction I make? At the end of last year I would have had an extra $1200, and by keeping up this behavior for 10 years, I would have saved $12,000; 20 years, $24,000. This is how a big picture thinker’s mind operates.
My wife and I are professional shoppers, and professional money-savers concurrently. I would say the average amount that we saved on all of those transactions is between $5 and $10. Although, I currently cannot prove that number, so just take my word for it! Now do the math on that savings! 1 year: up to $12,000; 10 years: up to $120,000; 20 years: up to $240,000. If you started similar behavior at age 20 then you could have bought a house with this money by age 40 and bypassed a mortgage completely (and this isn’t even income savings).
You save more when you don’t buy anything in the first place. I’m sure you’ve heard someone come off a mall shopping trip, bragging about how much money they saved and how much they got for their money. Now I’m not saying “don’t buy anything”. I’m stating the fact that by definition if you buy something that you don’t actually need then you are by default not saving anything. This is the first concept that should be understood before immersing oneself in the world of financial independence.
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The next concept is learning how to save.
Believe it or not we are not taught or socially conditioned to save money. Advertisers try to draw us into their stores for big sales, half-off events, or giveaways to the first x shoppers. The norm is to react to these sales, and hit the mall every weekend, or the car dealership for a new car every few years. I’m not saying “avoid sales”, because honestly sometimes there’s something you really do need and if it just happens to hit your perfect price point then buy the damn thing!
This happened to me during Black Friday weekend. I got a new drill for $90, it is an awesome one and it was less than half price. I’d call that a win. You’re right, I could have went to Target and picked up a $40 Black&Decker drill instead and saved $50. Trust me, I’ve owned shitty tools from Target, and while they might get the job done, they won’t last. I know my more expensive drill will last me years, and pay for itself tenfold. What I’m really saying here is tune our the advertisements, don’t buy expensive things, even if you have the money, unless a. you need whatever it is or b. there is no b.
The Moneyseeds spent a lot of time and money on eating out last year. We’ve since taken an ax to our eat-out budget and started cooking more at home. But when we were eating out, we were still being as smart as we could be. Simple things add up over time. We went to Chipotle a disgustingly delicious 66 times last year. Holy shit! And you save money how?! I admit we spent too much on burritos, but one thing we didn’t spend money on at Chipotle was soft drinks. At $2 per cup we couldn’t rationally justify this expense. Over 66 trips, we saved a combined amount of $264 by either bringing our own Cokes or drinking water.
As I said earlier in this post, this wouldn’t qualify as real saving, because the nature of these trips was unnecessary. We would have saved $1200 by not stepping foot into the establishment in the first place. But if you’re a compulsive dine-outer, order a water instead of a soft drink, beer or hard beverage. If you become a long-term thinker you will see this as a life deposit instead of feeling deprived in the moment.
I’m on the fence about brand name products. On one hand there are brand name products that you know are extremely quality items that will last forever, if not a really long time (like my drill). Then there are brand name products that are completely unnecessary and are there in the store to confuse you. Here’s an example: Kraft-fucking-cheese. You just put a brand name on disgusting orange processed trans-fat in a plastic wrapper. It sits in a refrigerated shelf of the grocery store, right next to the store brand American cheese (which is equally repulsive). Just because the word “Kraft” is on the package they can charge more money for it.
We keep our grocery bill generally pretty low by avoiding brand name products, and only buying brand name stuff if it’s sale price is less than it’s store brand counterpart. So, if you feel it necessary to clog your arteries, don’t just default to the brand you know, default to the cheaper option (your taste buds won’t know the difference).
The following is a list of areas of normal spending where you can save money:
- Grocery stores
- Gas stations
- Pharmacies
- The Internet
- Utilities (electric/gas/cable televsion/internet)
- Auto/Homeowner’s insurance
- Restaurants
- Mortgage
- Cell phone bill
- Entertainment
- Every single place you spend money
You’ll notice that this post isn’t a guidebook of how you can save money. That’s because I’m not you, and I have no idea what you spend your money on. The general theme is one that applies to everyone, and that is: you can save money. Slight modifications to our normal lives will benefit us immensely in the long term. Mentally processing our impending transactions can help us deflect our own bad spending habits. Thinking about the future before handing the credit card to the cashier, or even before walking into the store, will help you become a big picture thinker.
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