Friends, while there are several big stuff that we should be sweating leveraging my 80-20 model detailed in my book, I thought of taking the opportunity and touch on some of the small stuff that also adds up in the long run. Here is an inside look at some statistics (yearly) around the smaller spends that I wanted to share and get you all thinking about our spending habits:
- Buying branded or designer products usually costs higher almost 20-60% more in grocery stores. Based on my experience, sticking to house brands can yield yearly savings of $2,000 – $5,000.
- Instead of eating out, try to bring your lunch to the office for at least four days. With this method I saved $150-$200 per month, which yields a yearly savings of $1,500 – $2,500.
- Maintain presence of mind and avoid doing multiple tasks when driving. Common mistakes cause unforeseen expenses (such as hitting your car while backing out of the garage). Also, learn basic car maintenance, such as checking oil and fluids so you know when to go and get it serviced (and not more than you need)
- If it suits your lifestyle, adopt the sharing model where possible. Share an accommodation if you are a single. Share a ride to work. Take group vacations.
- Keep putting in as much added principal as you can to your house mortgage and auto loan. Yearly Savings: $5,000 – $20,000
- Whenever you see you are building up debt, stay on top by cutting down on all possible expenses that are not necessities.
- Be loyal to some of the stores where you get things you need and if you do that do make sure to become their member so you get member deals/discounts or take advantage of loyalty programs.
- Raising deductibles on various insurances helped me generate savings of up to 30%, which added up to yearly savings of $200 – $400.
- Get your gas filled up at a gas station in your commute that is priced lowest. You can almost save up to $5 for each time you get the tank full. There are apps and websites to help you find the prices of all nearby gas stations. Based on my personal experience, this adds up to yearly savings of $200 – $300.
- Try to keep three or four months’ salary in a separate savings account as “emergency cash.” I pretended it was not there when making spending decisions. Whenever I did tap into it (as I did for a few major expenses), I made sure to prioritize filling it back up as soon as I could.
In my book, Millionomics: My Journey to gaining financial freedom, you will find lot more insightful details on how I achieved significant savings leveraging my smart savings model that helped me gain financial freedom and hit the million dollar mark.