3731: 8 Ways to Make Huge Savings in Your Budget by Leo Babauta of Zen Habits on Frugality

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[00:00:54] a little bit of my commentary at the end. So with that, let's get right to today's post as we optimize your life. 8 Ways to Make Huge Savings in Your Budget by Leo Babauta of ZenHabits.net. With the economy not doing so well, many people are looking for ways to save money and get on more solid financial ground.

[00:01:19] And while it's great to cut out little things such as lattes and Gucci bags, what most people need are big savings. You know, thousands of dollars in savings. Not $50 a month. But you can't slash your budget for items such as food, gas, and utilities. While you can save some money in these areas, the savings are usually pretty small compared to some of the other items I'll mention.

[00:01:45] So I've compiled a list of ways you can make big changes, at least for a little while, and who knows, maybe over the long term. There will be some objections. From people who don't think they can change their lives this much, or who don't want to. That's fine. I'm not saying these changes are for everyone. But I really do think we can live with less. And with the right mindset, you can find happiness right now without needing to spend money.

[00:02:14] That's the key. Finding contentment while living with less. Number one, move to a smaller home. For many people, housing is the biggest expense in their budget. Thus, it represents the biggest opportunity to save. If you live in a smaller, less costly home, you can save a lot of money in one fell swoop. Obviously, this isn't a change you can implement overnight.

[00:02:40] But it's worth keeping your eye open for an opportunity to make the change. Start looking around for smaller homes, especially ones that are closer to the places you need to go, such as work, the grocery store, and so on, so you can save on transportation costs as well. If you get rid of a lot of excess stuff, you don't need as much space. This change alone can save thousands each year. Number two, sell a car.

[00:03:08] If you have two or more vehicles, consider selling one of them to save money. Often, we can get away with one vehicle if we carefully arrange our schedules. My wife, our six kids, and I did this, and we were able to survive with one van. Sure, sometimes it would be cool to have two cars, but it's not a necessity. By the way, we did this even when we were both working,

[00:03:32] and all six kids had school, daycare, soccer practice and games, music lessons, and so on. Take any cash you get from selling your car and use it to pay off some of the loan for the car you keep, or use it to pay off higher interest debt. Number three, get a smaller used car. Whether you already have only one car or you decide you absolutely need two or more vehicles,

[00:04:00] you can downgrade your car so that it costs less. Sell your car and look for a smaller used model that runs well and costs less than the one you own now, preferably only two to three years old. Again, there are potential savings of thousands each year. Number four, stop paying interest. Some people pay thousands of dollars in interest every year.

[00:04:26] I'm happy to say that I now pay zero in interest after becoming debt-free last year. That's not always possible for everyone, but this is a very big potential savings for most of us. The key is to stop getting into new debt and to pay off your old debt as quickly as possible. Paying off my credit cards was the priority, but we also paid off our car loans and bought our last two vehicles with cash.

[00:04:52] Again, this is not for everyone, but I highly recommend it for those who can manage it. Number five, stop buying unnecessary items. This is a toughie, but if you're really serious about saving, you'll at least consider it. Try tracking your spending for a month, and next to each expense item, mark the ones that are pure necessities. Groceries, gas, utility bills, medicine, doctor's visits, and so on. The rest are unnecessary.

[00:05:22] Clothes and shoes you didn't really need. Electronics, magazines, gourmet coffee, and so on. If you stopped buying these things at least for a little while, you'd notice some pretty sizable savings. Number six, stop traveling. If you travel several times a year or even just once a year, you could save thousands by not traveling. Before last year, I didn't travel for seven years, and it didn't hurt me one bit.

[00:05:51] You can relax and take a break from work without having to leave home if you learn to enjoy yourself from where you are. I'm not saying you should never travel again, but if income is dropping, you might consider a moratorium for a year or two. Each trip can cost thousands depending on how far and long you travel. So this is a huge potential savings for some people. Number seven, slash entertaining and entertainment.

[00:06:19] Many people do a lot of entertaining. Parties with friends, family, or coworkers. And those expenses can really add up. Stop entertaining so much, or at least save money by making these gatherings potlucks, or holding them during non-meal times when you can get away with serving appetizers. Similarly, if you spend a lot of money going out to entertainment, movies, theater, dining out, drinking, clubbing, and so on,

[00:06:48] you can curb this habit and save a lot of money. Learn that you don't need to spend money to have fun. And number eight, cut out all subscriptions. Each little subscription you have is a small ticket item. A magazine subscription could be $15 to $25 a year, for example, and subscribing to an online service might only be $5 to $20 a month. But if you subscribe to three magazines and four online services,

[00:07:18] and cut out an unneeded cell phone plan or cable TV subscription, you could save $1,000 a year. Some people have even more subscriptions and can save thousands. That's not much compared to some of the other items I've mentioned, but it's worth considering. You just listened to the post titled, Eight Ways to Make Huge Savings in Your Budget, by Leo Babauta of zenhabits.net.

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[00:08:45] That's 50% off your first year at Monarch.com with code OPTIMAL. This episode is brought to you by Google Chrome. You think you know a browser, but Gemini and Chrome? That's new. It can help you with practically anything on the web, like restoring a vintage motorcycle from a 50-page restoration block, or finally break down that long article you've had open for weeks. Gemini and Chrome is here for it. Ready to make anything online make sense? There's no place like Chrome. Check responses set up required.

[00:09:14] Compatibility and availability varies 18+. Thank you to Leo. Having one van for two adults and six kids definitely took some planning. And I think that planning part is worth spending some time on before making a decision like this. It's one thing to say that another family got by with one vehicle. Figuring out how you'd get to work on an average day is a lot more specific.

[00:09:40] You don't have to sell a car to find out what a week with one vehicle would look like. You can start by looking at the trips you actually make and where the conflicts would be. Maybe there's a way to make it work, and maybe there isn't. And I think that's how you can approach this whole list. You don't have to agree to all eight changes to get something out of it. If moving isn't realistic, that doesn't prevent you from trying a less expensive way to get together with friends.

[00:10:09] You can pick the part that fits your situation. Being willing to reconsider an expense doesn't mean you've already agreed to give it up. It just means you're giving yourself a chance to make a different decision. So thank you to Leo for this one. Thank you for being here. Have a great day, and I'll see you tomorrow, where your optimal life awaits. Let's see you tomorrow.