Not a financial advisor and I’d be skeptical of anyone that says they know what the world will look like 12 months from now on this topic. My two cents… Don’t let the inflation narratives get to you. There have been some rough increases and no guarantee there isn’t more to come, but many believe that increases are “transitory” and will settle back down to normal levels as we work through to the other side of Covid and supply/demand normalizes in a lot of areas. Can only control what you can control, make the best decisions you can and know that there are 30M+ other people dealing with the same stuff in this country every day.
Just remember that less money out is the same if not better than having more money in by the time you account for tax on that money in. A book that really changed my thinking on this is the Latte Factor… if you Google it there are resources that give the general idea.
A few things we do/have done…
I treat it as a bit of a game in trying to live as efficiently as possible without hurting a lifestyle that lets us live happy.
-went down to being a 1 car house. Owned two cars because that’s how it always was but realized we almost never used both at the same time. Before we sold a car we tried it out for a few months to be sure. Since we make the move we haven’t looked back. Halving our insurance, ongoing maintenance and especially depreciation has been massive. This will only work for certain lifestyles… takes an honest look at needs for one and family as far as work, school and shopping but for us it’s crazy how much we threw away for years to have a second car. Added benefit right now… used car market is a little wild. Haven’t checked locally for a while, but generally this year there’s been a serious lack of supply.
-am almost ocd-level with stuff that requires a monthly payment. Whether it’s different online services, apps, extra upsells on the cell or cable bill everyone wants to get a simple $5-10/month extra out of you. Doesn’t seem like much but by the time you do the math over 12 months over multiple services it adds up. We do subscribe to stuff we use but we’re honest with ourselves about what we use vs what’s habit that we keep paying for just because that’s the way it’s always been. Whether it’s this sort of stuff or getting rid of the second car, we’ve promised to be honest with ourselves if we missed what we got rid of and then simply get it back.
-on cell phone, check where your contract is at. If your term is up on your phone, talk to your provider about the rate you can get when your “device balance” isn’t included any more. Possible that $10-15/month is sitting there waiting to be saved. We also saved a surprising amount by moving to a shared plan within our home versus paying separate bills. Another to call your provider on. They will probably try to use the opportunity to lock you in on a new phone. We consider how badly we need to upgrade every 24 months just because they want to give us a “free” phone.
-brand loyalty at the grocery store. We have our stuff that we like, but so often the difference from one brand of stuff to the next is like splitting hairs. When we don’t care which brand of for example yogurt we buy, we take the one that’s on sale and in quantity if the dates allow. If there’s for example a type of cereal we really do like that’s on sale we grab a few so we aren’t stuck paying full price for it later.
-when needing to feed the family in a hurry and fridge is empty, is there a better deal than grocery store rotisserie chickens? Usually have some chicken leftover for lunch the next day to boot.
-app deals/rewards programs. Mindful that eating out regularly really adds up, but when treating ourselves we ride the deals that Tim’s and Mcds give through their apps pretty hard.
-we’ve detached from the idea of “new” on the items where it really doesn’t matter. Gotta know what stuff is worth and be able to spot quality, but so often settling for “pretty damn new” ends up with buying the (thing) for a lot less and it looking/working the same as the new thing two weeks after we buy it. Not saying to do all your shopping on Amazon because there are some great stores right in town that’ll often give awesome deals, but as an example consider searching Amazon warehouse deals in stead of buying brand new from them. The pair of headphones I just got was about 1/3 cheaper and it turns out they had one tiny scuff on them that you’d almost need a magnifying glass to see. They don’t all work out like that, but if they suck you just return them free. Other than saving money right away, Benefit being that when it comes time to selling those headphones, it’ll be for a lot closer to what I paid for them. Another example would be the bike I got at a local bike shop. Brand new but one model year behind. Don’t care, bikes great, saved a nice chunk of change and I’ll treat it well enough that it’ll look better three years from now than most bikes bought new today.
-credit card rewards. Found a good card with a good rewards system. Buy literally everything on it with the commitment to be disciplined and pay off at the end of each month. We’ve got $2000 sitting there waiting to be redeemed as travel gets more and more normal again, or worst case scenario we can use it to pay for that expensive gas at the pump. Whole system falls apart though if are spending beyond means and not able to pay off every month since the interest is a killer.
-on driving, especially with gas prices where theyre at we're mindful that every trip across town could be a few bucks gas. Doesn't mean stay home and lock the doors, but there are unnecessary trips that add up in a hurry. We gas up at coop most of the time since we get the nice chunk of coop equity cash back every year on top of the credit card rewards we'd get for buying gas on CC. Used to use Can Tire for the Can Tire money but found for us that Coop was a little better deal. Different folks will have different opinions on that.
-if you have a mortgage, consider exploring a refinance. Rates are insanely low and depending on what you're paying you might come out pretty good on the other end. Your mortgage provider will be able to run through scenarios with you.
-same idea, but with house insurance. Talk to your provider about your needs and what you pay. We were surprised how much less ours was this time just by our broker making a couple honest suggestions
-it might sound like work, but it's all just habit adjusting and once they're habits they're just life.
Consider talking to a real financial advisor. Ask around to find out who's good and will have your best interests at heart
Please be skeptical about anyone that tells you it’s easy to make money by doing nothing. Doubly skeptical if they want money from you to help you get there. Especially in the work from home era there are No shortage of opportunities out there to make side income for someone that has the time and is willing to work for it, but the dream of sitting on the couch while the bills get paid is not common. A lot more cases of someone who had a lucky run for a few months before reality set in.
Love to read any tips anyone else has and any pitfalls to watch out for for anyone that does any of the above!