Being frugal is an art and something Mrs. T and I practice on a daily basis. We’re always finding new ways to save money so we can use whatever saved for investments or big item purchases like vacation. I’m always amazed to see people spending unnecessary amounts of money when they can easily save 10% or more by taking some simple steps. Here are 5 really easy things that Mrs. T and I do on a regular basis to save money.
Bring your own lunch
My work has a cafeteria which serves today’s special for $7. I can also get different items for cheaper. Assuming I buy lunch every day, over the course of a month I will spend more than $140. Over the span of a year, I’ll end up spending close to $1700 on lunch alone. If I were to invest $1700 in dividend paying stocks, at a 3% yield, that’s $51 worth of dividend for doing nothing at all.
If you’re reading this blog, you’ve probably heard about the brown bag lunch idea. The idea is to bring sandwiches for lunch to save money. To be perfectly honest, I don’t like eating sandwiches for lunch. So the idea of bringing my own brown bag lunch doesn’t work for me. I do, however, bring my lunch regularly. Rather than bringing sandwiches, I bring leftovers from the night before. When Mrs. T and I cook dinner we almost always make some extras, so both of us can have the leftover for lunch the next day.
Cut your own hair
Ok not literally, I don’t cut my own hair, Mrs. T does. Because I’m a guy and have short hair, I need a haircut about every month during summer and about once every 1.5 month during winter. I used to find the cheapest hairdresser out there which cost anywhere from $15-20. Now $20 per haircut is considered cheap, some of my guy friends spend up to $50 per haircut!
Say I get a haircut on average 10 times a year, at $20 a haircut, that’s $200. If I go to a more expensive hairdresser, it would certainly cost more than $200 per year. A good hair cutting kit costs about $60-100. It might sound like a big initial cost but the kit pays itself back after 3-5 haircuts. After the 3rd-5th haircut you’re saving money every haircut. It is great if you have kids too because that would just save even more money for your family.
If you are a lady, you could look for hairdresser schools to get your hair cuts. This is what Mrs. T does. The saving rate is anywhere from 50% to 75% depending on the type of styling.
Borrow books from the library
It is very important to continue learning as an individual. One way to do this is to read lots of different books and educate yourself. Last year I read over 40 books and Mrs. T probably read about 25 books. Assuming $20 per book, that’s $1300 between the two of us. This is why utilizing the local libraries and borrowing books instead of buying makes sense. Not only is this an excellent way to live frugally, this also saves the environment. How often do you find yourself wondering what to do with that pile of books you only ever read once?
Ditch your TV
One of the biggest time waster in today’s society is probably TV. According to Maclean’s study, on average Canadians watched 28.5 hours of TV each week. That’s over 1 day a week that you’re spending in front of the TV! What’s even more amazing is that the cable bill has only gone up over the past few years. Here on the West Coast of Canada, Shaw basic cable costs $35 per month and that only gives you a handful of channels. If you want specific channels you need to buy add-ons, which will increase your cable bill. It is not unusual to hear friends and co-workers spending over $100 per month on cable subscription. On top of the cable bill, some people may add Netflix monthly subscriptions and watch a few pay-per-view or on-demand shows each month. Now that’s a lot of money and a lot of time you are spending in front of the electronic box. A good frugal living practice is to cancel your cable subscription all together. Save the money and spend that 28.5 hours per week outside, learn a new hobby, spending quality time with friends and family, or get a part time job. 😉 Or even better, ditch the TV completely. Our household has been TV free for close to 4 years and we have not looked back. I can think of better ways to spend 28.5 hours each week than sitting in front of the TV!
Get rid of your smartphone
Do you honestly need the latest smartphone with 10+ GB of data plan just so you can check Facebook and Twitter every single minute of your life? A phone bill of $50 per month is considered “cheap” these days. It’s not unusual to receive a phone bill of over $100 per month. That number is just mind boggling to me. Before I got a company phone, my monthly cellphone bill was less than $25 including taxes. I was using a non-smart phone that was over 3 years old. I had to get a company phone due to work but the company pays for the phone bill. I would be perfectly happy to go back to a non-smart phone today. Mrs. T has a non-smart phone as well (we call it a “not-so-smart phone”) and her cellphone bill is a very manageable $28 per month.
There you have it, 5 ways to frugal living that will easily save you a few thousand bucks each year. Use the money saved to invest in dividend paying stocks and let your money work hard for you.