How to Save Money Fast?

Here are 10 expenses frugalists attack right away:

• Housing
• Car Loan
• Eating Out
• Cable TV
• Expensive Clothing
• Pets
• Electronics and Gadgets
• Starbucks-Coffee
• Paying-Others – DIY-Instead
• Fees, Fees, and More Fees

Too many people struggle with getting rid of debt.  Others want to save money fast.  Unfortunately, we live in a world that promotes consumption of all kinds.  Soon debt can get out of control and saving money can seem unrealistic. 

It doesn’t have to be this way.  The fact that you are reading this article is a huge indication you know you must act. You can do this!

At the end of this article, I summarize all the expense cutting and show you how you can save a lot of money fast by following this ’10 expenses frugalists attack’ master plan. In fact, we’ll look at a scenario where an average Joe could make well over $200,000 in just ten years by living a frugalist lifestyle and investing wisely.

Housing – One Of The Biggest Expenses Frugalists Attack

One of the biggest expenses frugalists attack to save money fast relates to housing. This includes things like rent (or mortgage), utilities, taxes, insurance, etc.

Some Americans are spending over half their income on housing!  That’s way too much money to spend on housing. 

If you are a low-income earner, you may not have much of a choice, because housing is expensive.  You can still look for opportunities to cut this expense though.  Shared housing could be one possibility. 

If you make decent money your housing expense should be closer to a third of your income, not half of your income. 

If you make good money, then your housing expense should be closer to one fifth or even one eight of your income.

In either case, you can save a lot of money by re-evaluating your housing expenses. 

I remember the first apartment I rented out of college.  This apartment was the entire first floor of a Victorian house in Alameda, CA.  The apartment was newly remodeled.  It was huge for one person and it was beautiful. 

Once I realize how much I was spending on housing, as a percentage of my income, I approached the landlord to see if she would agree to a lower rent amount.  She didn’t.  I ended up moving to a smaller apartment that was 30% cheaper.

Assume our friend Joe has a gross salary of $50,000 per year and spends $2,083 per month on housing related expenses.  That’s $25,000 a year and 50% of his salary. 

Now assume Joe decides to cut his housing expense to 40% of his salary.  He will now spend $1,667 a month or $20,000 a year on housing.  In other words, he can save $5,000 a year from now on.   This is one sure way to save money fast!

Car Loan – Cars Keep You Poor

Have you ever heard the saying cars keep you poor? Not a bad saying. Here’s a video worth watching.

Another one of the expenses frugalists attack is the car loans.   As much as possible buy a good used car you can afford to buy cash.  Don’t take on a loan to buy a car.  There are two main reasons for this.  First, you should avoid paying interest rates on anything. 

Second if you have a loan you will pay a higher amount on insurance than necessary.  This is because the financing entity demands protection on their asset. 

See What You Can (and Can’t) Learn From the Average Car Payment.

It amazes me that people are willing to make monthly payments of $380 hundred dollars or more on a car they can afford.  On top of that they have to pay high insurance rates. Want to know how to save money fast for a car? Stop paying the $380 and put that into savings instead.     

We all know cars depreciate in value.  Newer cars depreciate faster.  Not surprisingly there are too many people that owe more on their vehicles than they are worth.

If you are serious about getting rid of debt, you should not make car payments. Remember, cars keep you poor.

My dad always said cars were a tool for work.  I didn’t necessarily like hearing that, but I admired him for saying something like that. 

Assume Joe got rid of his nicer car and paid cash for an older vehicle.  If he saves $380 in car payments per month, then he’ll be saving $4,560 per year.  This is another sure way to save money fast. 

Eating Out

Stop eating out.  This is another one of the expenses frugalists attack hard to save money fast.

See Average food spending tops 10% of income. Here’s how to save money and still eat well. 

According to this article, the average American spends $372 per month on food at home and $228 per month on food consumed away from home. 

That’s a lot of money spent eating out.  If you are on a tight budget you need to stop eating out and start cooking more. 

Home cooking can be yummy and healthier.  That’s because a huge part of that extra $228 a month is spent on junk food. 

Think about it you’ll save money and you’ll be in better shape!

Eating out was actually the first thing that caused me to evaluate my overall expenses.  This happened because early on I was eating out for lunch every day.  Then a friend asked me how much money I was spending eating out. 

His question caused me to want to track my expenses.  Shortly after I bought Quicken, one of those programs used to track expenses. 

It took a bit of work to set things up, but once I was tracking my expenses, I began making significant changes to how I spent money.  Then I started creating budgets and so on. 

This is one area where we don’t do so well as a family.  We eat out too much and spend way too much. 

Assume Joe stops spending $228 a month eating out.  He saves that money and starts eating healthier.  In a year he will have saved $2,736 and may be a slimmer and more energetic version of his old self. 

Cable TV

Cut the cord!  I bet most frugalists don’t have Cable TV.

Cable TV is way too expensive as it is. See The Average American Spends Over $2,600 a Year on Cable TV & Internet.  According to this article the average American spends $217 a month on their cable bill. 

To get rid of debt you must cut this expense immediately.  You should not be paying for channels like HBO, ESPN, etc. 

In this day and age all you really need is internet service.  You can get that for $50 a month. 

You’ll probably make better use of your time if you don’t have cable or satellite service anyway. 

People on a budget should not spend this kind of money on cable TV. 

My wife and I pay for the most basic cable service you can imagine.   And now that I think about it, I don’t even know why we pay for that because I am the only one that uses the cable channels and I don’t watch much TV.  

Let’s say Joe cuts the cord and pays $50 month for internet service instead of $217 a month for cable service.  He’ll be saving $167 a month.  At $2,004 per year, that’s saving money fast!

Expensive Clothing

Stop buying expensive clothes!  Frugalists never pay full price. They always find sales. See Average Cost of Clothing Per Month Will Surprise You.  According to this article, Adults aged 35-44 spend $209 per month on clothing.  That’s $2,508 per year. 

Seriously people?  My family doesn’t spend that kind of money on clothing, even though we could certainly afford it.  This is absolutely an expense you must cut if you want to get rid of debt. 

One thing that really irritates me is seeing teens in families with low incomes wearing expensive shoes.  If you are on a tight budget you need to start shopping at thrift stores. 

My teenage daughters and I visit the Salvation Army store about twice a year.  I love finding me some high-quality shirts and paying $5 bucks for them. 

I also like buying shoes there.  One of my favorite pairs of shoes were shoes I bought there for a mission trip to Uganda.  My plan was to give away the used shoes before I came back home.  Well, I liked the shoes so much that I ended up keeping them for years after the trip. 

To be honest, my wife doesn’t like buying clothes that are not new.  But she has no problem with me saving money that way. 

Say Joe decides to spend only $75 per month on clothing.  He now can save $149 per month, which translates to $1,608 a year!  With all these expense cuts, Joe is definitely saving money fast. 

Pets

Say no to the cute puppy! This is a tough one, because many frugalists are pet lovers. Nevertheless, see 15 Insightful Pet Spending Statistics: Americans are Spending More on Pets Than Ever.  According to this article, dog owners spend an average of around $1,380 on pet basic expenses per year.

I know this will upset many readers, but please hear me out.  I own rental properties and it saddens me to see a potential tenant whose finances are in bad shape yet has one or more dogs and spends this kind of money on them.

As a landlord, I already don’t want pets in my homes, because often those pets cause damage that I end up having to cover. 

If you are on a tight budget or need to get rid of debt, you really can’t afford a pet.  Eventually you’ll be forced to make expensive veterinarian visits you have no budget for. 

Joe’s friend gave him a cute puppy, but after considering his finances he decided he couldn’t afford it.  His friend took the puppy back.  In doing so, Joe didn’t spend the $1,380 a year he would have spent otherwise. 

Electronics and Gadgets

Everyone loves gadgets, but this is also one of the expenses frugalists attack. They don’t buy the latest gadgets like most people do!  See U.S. adults spend $1,200 a year on electronics. 

Do you really need the latest watch, the latest phone, the latest pad, etc?  No! If you are on a tight budget ore need to get rid of debt you must cut this expense. 

Too many parents with tight budgets buy their kids a $600 phone.  Not only they can’t afford the phone, but now they can’t even have a conversation with their kids because their kids are completely consumed by their phone. 

It is true, I have two teenagers and trust me when I say we had a lot more interaction with them before they got their phones than now. 

What happened to the days when we could just have normal conversations with people? 

This reminds me of one day when my parents were visiting us for a weekend.  Late in the afternoon there was a storm that caused loss of power.  We had a wood fire place and made a nice fire in it for warmth, light, and something to do.  We had such a good time just sitting back by the fire, having a good conversation. 

Let’s say that Joe decides he is only going to spend $600 in new gadgets this year.  That’s a savings of $50 a month.  He’ll save $600 in one year.

Starbucks Coffee

Say no to barista made coffee and yes to home java. This is one of the first expenses frugalists attack, because it is easy to implement.

See Brewing Coffee at Home vs. Buying at a Coffee Shop.  According to this article, you can save yourself $427 a year by brewing at home.

As for coffee, I love coffee!  I grew up in a culture where it is okay for kids to drink coffee.  And I was one of those kids. 

So, I really enjoy a good cup of coffee.  I can’t deny how nice it is to pick up a nice latte at a coffee shop on my way to work.  But as much as I enjoy that spending money at a coffee shop every day is too much of a luxury. 

When are Americans going to realize that a double expresso caramel macchiato with extra whip is not only bad for them, but also way too expensive?

For sure, if you are on a tight budget, you should not be making Starbuck’s investors rich.  Instead, buy yourself a nice coffee maker and cut this expense.

Let’s say Joe decides to stop going to Starbucks everyday and instead decides to brew at home.  He is now saving another $427 a year. 

Paying Others – DIY Instead

Frugalists are all about DIY. There are too many money saving examples that can fall under the DIY category, but let’s pick oil changes for example.  People pay well over $60 for oil changes when they could change their own oil for half the price.  Saving $30 may not sound like much, but when you are on a tight budget everything helps. 

If you are on a tight budget you can’t afford to sit back and pay others to do work you could do yourself.  This could include vehicle repairs, home repairs, etc. 

Not long ago I had a problem with an alternator in one of my vehicles.  I could have spent hundreds of dollars by taking the vehicle to the mechanic.  Instead I decided to try to figure it out on my own. 

Now days you can fix pretty much everything by watching videos in YouTube. 

As it turns out, the alternator had some worn out brushes I was able to buy online for less than $5.  I replaced the brushes and everything was good to go. 

Not only I saved hundreds of dollars, but I was very proud of myself for doing so.

Our friend Joe stopped paying others for work he could do himself.   As a result, he saved $200 a year.

Fees Fees and More Fees

Say not to fees and cut this expense!  Bank fees are some of the expenses frugalists hate the most. I am sure the average American pays way too much on fees.  The worst fees are probably bank related fees.  There are credit card fees, ATM use fees, late penalty fees, etc.

First, if you have credit card debt stop using credit cards.  Credit card fees are way too high.  No sane person should pay such fees, period. 

Second, if you have credit card debt that you can’t pay right away, call the card issuer and try to get them to lower their fees.  You’d be surprised of what you can accomplish with a few calls. 

The same applies to late fees and other kinds of fees.  You can always ask for fees to be waived.  The worst thing that can happen is that you will be told no. 

One time our family wanted to check out a park on the shores of a river.  As we drove to the park, we came across a guard shack.  In the front of the shack was a sign with a fee schedule.  Inside the shack stood a young man ready to collect. 

I rolled my window down and half-jokingly said to the young man “any chance you’d wave the $5 fee?  We only want to check the park out”.  I was surprised when the young man said sure, with a smile in his face. 

Honestly, I think he was very happy to be so accommodating.  And I was thrilled to be able to show my kids that it doesn’t hurt to ask. 

Joe stopped using his credit card and started asking for fees to be waived.  In doing so, he saved another $200 a year in fees. 

Total Savings in One Year by Living a Frugalist Lifestyle

Now, let’s see how our friend Joe did after applying what he learned in “10 Expenses you must cut to get rid of debt and save money fast.”  Below is how much he saved on each item.

1. Housing $5,000 
2. Car Loan $4,560
3. Eating out $2,736
4. Cable TV $2,004
5. Clothing $1,608
6. Pets $1,380
7. Electronics $600
8. Coffee $427
9. DIY work $200
10. Fees $200

TOTAL $18,715

That’s a lot of money!  Now Joe begins to realize he was mismanaging his money.  In fact, it looks like Joe was about to get into a debt spiral before he implemented these changes. 

Total Money After Saving and Investing for 10 years

In 10 years, Joe Frugalist could have $187,150 worth of savings.  Even better, if Joe invested $18,715 every year and earned just 5% on his money, he could have $235,396 in 10 years!  Now, that’s saving money fast!

Isn’t this amazing?  Joe could accumulate almost a quarter of a million dollars after implementing the 10 expenses frugalists attack master plan.

In Joe’s case, I would highly encourage him to invest in real estate after saving his first $50,000.  The passive income from his real estate investments combined with financing leverage, property appreciation, and other characteristics unique to real estate investing are amazing. 

In fact, I recently wrote an article about a character like Joe, that used his first $50,000 to invest in real estate and ended up with a net worth of more than 1 million dollars in just a few years.

See Financial Freedom is About Cash Flow

Budgeting

Before we get into the 10 expenses you must cut, we need to address the importance of having a budget.  I know that sounds lame and boring, but please don’t glance over this.  The best thing you can do to get rid of debt and save money fast is to stick to a budget. 

My dad and mom have always been frugal and money wise.  So, you’d think I would manage my money well when I began life as an adult.  The reality is it took me a while to learn what I thought I already knew. 

When I graduated from college and got my first nice check, I thought I had tons of money.  One day I started adding up what I was spending money on and was shocked at how poorly I had managed my money. 

It took me months to realize that even though I had more money than ever before, I was spending way too much money.  And then it took me several more months to budget my money. 

Once I started budgeting it became easy to cut certain expenses.  This led me to saving money.  And this led me to start investing money in the stock market.  Within a few years I had enough money saved up and bought my first house. 

This house wasn’t for me to live in.  This was an income real estate investment.  And this was the beginning of many investments.  This all started with budgeting.  

For more on budgeting check out Dealing with Bad Debt

Please leave a comment practice this ’10 expenses frugalists attack’ plan, save a lot of money and invest.

JC Keen