I’m taking a brief blogging break at the moment. For your entertainment, a few awesome guest bloggers are stepping up to fill in the void. Today’s is David Bakke, who enjoys finding new ways to save money while expanding his lifestyle. He shares his insights and tips on Money Crashers Personal Finance.
During my professional career, I’ve never earned a high salary, yet I’ve been able to travel internationally multiple times and have plenty saved for retirement. I bought a new car late last year and paid for it in cash. I even walked away from my day job a few months ago to make money from home full-time.
How was I able to afford all of these things? It’s simple: by living on a shoestring budget. And my method is by no means difficult. While there’s nothing wrong with climbing up the corporate ladder to earn a larger salary, you can learn to live the life of a rock star on any paycheck. Here are some tips to get you started:
Reduce the Cost of Needs
Examine all of your regular expenses, and trim the costs wherever possible. Call your cell phone provider to see if there’s a cheaper minutes plan that still meets your needs. Slash your TV channel package and paid movie services to only those you actually watch. Adjust your thermostat to reduce home energy costs, and eliminate your home telephone service. It’s all these small expenses that add up over the course of the year.
Some providers (especially cable TV and Internet) may even offer you a small monthly discount just by calling and inquiring. They’d much rather cut you a deal than risk losing you as a long-term customer.
Eliminate Unnecessary Purchases
If you could afford a trip to Paris by taking a brown bag lunch to work every day for a year, would you do it? You can save about $1,000 a year by taking your lunch to work rather than eating out.
Learn to distinguish between “wants” and “needs.” Many purchases, such as lottery tickets, newspapers, excessive wardrobe items, and small electronics are all wants and should be reduced or eliminated from your spending. If an item from this list is something you’d like to include in your rock star lifestyle, just cut back on the other unnecessary purchases.
Change Your Spending Mindset
A major aspect of living a high-quality life comes not from earning a large salary, but rather from adjusting your spending habits. Whenever you go to spend money, ask yourself if you truly need the item. That usually eliminates about half of your potential purchases. Then, ask yourself if there is a way to get a better deal on it. Research the price online before making your decision.
Never Stop Saving
Saving money is a never-ending process. I had always thought I was doing quite well with my bare bones cell phone plan at $30 per month. However, after I did further research, I found that by switching to a pay-as-you-go plan, I could reduce my monthly expense for a cell phone to just under $20 per month. This saves me $120 over the course of the year. You should continually be on the lookout for new and different ways to save money.
Sell Anything You Can
I started an impromptu reselling business a few years back by selling my wife’s unneeded college textbooks. Once I searched my closets and drawers, I found a wealth of additional items to sell: an old digital camera ($25), a globe ($45), a large stuffed animal ($35), and a digital photo frame ($40).
You’d be amazed at what people are willing to give you money for, so set up an account for free and start selling on eBay. In addition to creating income, this also helps you to declutter your home.
Living a rock star lifestyle by no means requires a rock star salary. If you can effectively manage your spending choices and reduce your monthly bills, you’ll have the money you need for more lavish expenditures.
What other ways can you think of to save money so you can live like a rock star?