This “checklist” series of articles looks at common areas of spending to identify a list of opportunities to reduce costs. Not every tradeoff opportunity will make sense for you, but we hope you find this a helpful compilation.
“Tighten the belt.” “Just say no.” “Sell stuff until the kids think they’re next.” Chances are you’ve heard a lot of helpful advice on the road to financial prosperity and a lot of it revolves around ruthlessly cutting out the non-essentials. To a point that is all true – this pool of spending certainly isn’t critical to our survival and deserves its place on the list of saving opportunities. That said, we prefer thinking of this through the lens of tradeoffs. Not “saying no to a good thing” but rather saying “yes!” to something better 1And if we’re honest, being able to say “yes” to a few of these non-essentials may well be an essential part of your personal goals!.
The other principle I like to highlight is moderation. If we say no to everything, the odds are very good that the best intentioned resolution to “tighten the belt” collapses in a wave of profligate spending.2Not unlike my last New Years weight loss resolution under a weight of leftover Reeces Peanut Butter cup trees… In practice, even if you are trying to trim costs it can be helpful to leave a little margin for non-essentials that “spark joy” 3perhaps the “Weight Watchers version of financial goal setting?
Spend less on gifts
Buy only gifts that you can afford (in your budget) and never use consumer debt for gifts or other discretionary spending on consumer goods. A few other potential considerations
- Check the price history. Sites like www.camelcamelcamel.com can give you a price history of a product on Amazon (which is a pretty good indication of whether a product regularly drops in price). That site can also monitor a product and inform you if it hits a target price of your choosing.
- If things are tight consider a name swap or homemade gifts in lieu of everyone buying something for everyone else at Christmas
- Go humorous. An inexpensive humorous or personalized gift is often more memorable than that $100 gift card from Aunt Petunia.
Spend less on entertainment
This one is broad because we spend our money on many forms of entertainment. Opportunities here include:
- Buying at a discount. No matter the entertainment, there is almost always a cheaper way to get it. Groupon (and a host of similar services) can offer some steep discounts on local products and activities. Sports arenas often have discounted seating on special themed nights. Even Broadway shows have “day of” ticket lines at sharply discounted rates.
- Eating out less. Whether drive through or dine in, dining out has never been more expensive. It has been well documented that a modest change in our daily expenses (e.g. not paying for that daily cup of Joe) can pay huge dividends over time.
- Saving money when you do eat out. Have a “go to” restaurant? Many restaurants periodically offer sales for discounted gift cards. Holidays are often a good time to buy if you know you’ll be back. Just don’t save those gift cards indefinitely…there is a reason they can afford to discount them occassionally.
- Sign up for the birthday clubs. There is a whole lot of free/discounted stuff awaiting you, often within a month of the big day.
- Shop it online. Personally, I rarely pay for anything of substance without first doing a coupon code search. Often I find that a better price is available!
- Add one click. Sites like Rakuten can give you cash back on online purchases simply by clicking their website first. A minor hassle but nice to get a small check in the mail for buying stuff you’d have purchased anyway! Around the holidays, I’ve seen rebates over 10% back! Not bad if I’m buying it anyway.
- Cut the cord. If you pay for Cable, consider what content you are really using? Often times you can get what is most important to you directly from the content provider (Hulu, Netflix, Amazon Prime, HBOMax, Disney+, etc) for a fraction of the cost. Monitor monthly to “keep it fresh” with your entertainment content and not pay for anything you aren’t using.
Spend less on vacation
Another area of discretionary spending is vacation. Depending on your leisure preferences, vacation costs can mount quickly! Here are a few suggestions to keep it under control.
- Plan low cost trips. Camping, visiting family or friends, or sharing the cost of a larger home rental can all be good ways to travel for less.
- Shop the sales. If you are flexible, there are often ways to travel for less (airfare flash sales, last minute deals, or even Hotwire “hot deals” can be good options).
- Use points. There are whole communities of people who invest enormous time in finding and optimizing how best to parlay credit card points into free or heavily discounted vacations. I can personally attest to the efficacy of this approach having taken several trips courtesy of Chase, Marriott, United, Southwest, and JetBlue points. One site I find helpful is ThePointsGuy in keeping track of what my points are worth and how I can get the most for them.