Today, I’d like to discuss money-saving strategies that we use to reduce debt and increase wealth.
Not all of these saving strategies are one-size-fits-all. However, you’ll get an idea of where to begin.
Saving Strategies Are How The Rich Become Richer
How you choose to manage your money when you are younger will dictate how wealthy you will be in your senior years.
You have to have money-saving strategies in place; otherwise, you are only taking on a basic level of financial opportunities if you save anything at all.
I’ve often heard that the only way to be financially successful is to start investing early money.
Although there is much truth to this, you can still build your net worth and crush debt at any time in the game.
The only difference will be the numbers, and although you won’t have as much money socked away, at least you’d have something.
Tackling Money-Saving Strategies
I often feel that I hear and read the same thing about money-saving strategies, but here’s the thing, not everyone is doing it.
We continue to be hounded by the media, bloggers, government, and banks about money because of debt.
Too many Canadians are sitting on debt that they struggle to pay back and continue to play cat and mouse with their finances.
At some point, I believe that some people give up on the money they owe and would rather juggle it around than deal with it.
There has to be a solution, doesn’t there?
Best Saving Strategy If It’s The Only One You Choose
The most obvious would be to stop spending money on stuff and take your finances seriously.
The number one best saving strategy on the most basic level that I urge everyone to consider is to spend less than you earn.
If you can’t do that, you must consider your options because you will quickly find yourself in a bad financial situation.
The easy part is to feel miserable about your current money situation. The hard part is finding somewhere to live when you are homeless.
Don’t mistake waiting until the walls come crashing in to get motivated, seek help or hope for a miracle.
Unfortunately, many of us won’t see financial miracles unless we make them happen on our own.
Money-Saving Strategies Feed Your Tomorrow
I can’t stress enough how much money you will need in your retirement years, especially if you become ill or need to go into a retirement home or assisted living.
Having money in the bank when you retire is the difference between a private room or sharing a room for the rest of your life.
Perhaps you don’t care today, but you will care tomorrow when it’s your turn.
Not everyone ends up in a retirement home either, which means you still need to pay for everyday expenses.
Our neighbour is 91 years old and has no sign of heading into any retirement villa as he’s content in his home.
This means he still has utilities, property taxes, and other basic budget expenses like everyone else.
There is never a point where money won’t matter in your life because even when you’re dead, someone has to pick up the pieces, and that still costs money.
- How would you like to be buried?
- Who will fund your funeral?
- Who’s going to take over closing your affairs?
Someone has to do the work.
Penny-Pinching Money-Saving Strategies
There hasn’t been a time in both of our lives that we haven’t been made fun of due to our Frugal lifestyle.
Most of the extra money we earn comes from buying and selling, also known as profit income.
In the past, we would earn rental income from renting out rooms in our house to international students tax-free.
We would do just about anything that we could think of to save money or earn extra money to get ahead.
Creating The Financial Life You Want
Today this blog earns us a nice monthly profit, but that took us years to accomplish; however, it’s made income but on a passive level.
I still work on the blog every day, whether I publish a blog post, so I spend time working on my cash hobby.
Besides spending less than we earn over the years, we’ve fine-tuned many money-saving strategies that have helped us reach millionaire status.
It’s not that much in today’s money considering high home prices in many parts of Ontario, but the big thing is that we are debt-free.
Our house is fully paid off, and we purchased our vehicle new with cash.
We pay ourselves first every month by investing in our retirement and our son’s future.
These are not things we started when we became debt-free either, and it has been ongoing since we were in our 20’s.
Let’s have a look at some of our money-saving strategies that everyone should at some point evaluate.
Approve Your Mindset Reset
Our money-saving strategies have grown over the years by incorporating financial education, which has helped us pay off our debts.
As we like to call it, this mindset reset took time to flourish because there are lots to learn.
What we can tell you is that with a slight mindset shift from spender to a saver, you have quickly taken the first step to financial freedom.
All you need to do is believe that you can become debt-free and find ways to make money work for you instead of against you.
Once you start to see your debts disappear and your bank account grows, this is the point where you know you’ve made progress.
The key is to build on that success by pushing the limits and finding alternate income streams to reach your financial goals.
Tracking Our Spending
There’s budgeting, and then there is tracking your spending, both of which we do.
Tracking our expenses meant that we documented every dollar we spent in our excel spreadsheet.
By doing this, we were able to see our monthly expenses in each budget category and what they were for.
This was one of our smartest beginnings because it helped us figure out where more effort was needed.
Another thing we learned during the process of tracking expenses is how much our utilities were costing us.
You don’t look at the overall yearly expenses, but your jaw should drop when you see that your mobile phone costs you $2000.
Our hydro costs were through the roof, which prompted us to live by our smart meter and time of use.
Even the most minor changes help the overall purpose of saving money.
Budgeting Your Money
Tracking your expenses and budgeting are two different things since one balances numbers, and the other tells you a story.
Without budgeting, we would not be in the financial position we are in today.
I didn’t start this blog to tell everyone that a budget would work for them, but I have said that you can work with a budget.
I know many people who use a budget and fail miserably at it.
I’m not particularly eager to give the impression that just because you use a budget, you’re safe from debt.
A budget takes work to earn money, spend the money, save the money and balance the money.
You have to put in time for a budget to work and help you pay down your debts and ultimately build wealth.
Take it from a budgeting expert; your budget will make you happy if you play by the rules.
No fudging numbers or making excuses for your budget, or it can get nasty for you quickly.
If you find that your budget is not going as planned, evaluate the areas you are failing in and write down why.
If you aren’t earning enough money and cannot pay your gas bill each time, you must find an alternate income stream.
Related: CBB 10 Step Mini Budgeting Series (Plus Free Budget Download)
After getting married, we still had a van payment costing us just under $500 a month.
We were only renting at the time, and with one income, we still managed to squeeze in extra payments to knock that debt out of our lives.
Whenever we had a debt, we paid it off the same month and have continued doing so ever since.
Large loans such as a mortgage, car loan and school loans take time to pay back the little things like credit card debt should not.
If you spend what you can afford and pay your credit card monthly, you should avoid the debt trap.
Keep up with your emergency savings account so you can build 6-12 months of savings for those times you are in need.
It shouldn’t have to fund your credit card either unless it was a significant expense that needed to be done as a roof caved in.
Downsize Your Home
We didn’t downsize our home, instead, we bought a house that we could afford a mortgage on one income.
Many people using both their incomes to pay their mortgage and expenses might struggle if one of them were to lose their job.
The good thing is that if you own a home, you can at least sell it to downsize, but if you are renting, you may need to source a cheaper place to live.
If you look around where you live now and realize that you don’t use the space you are paying for as much as you thought, downsize.
Find a home that will cost you less in the long run and where you will utilize all of the areas you pay.
Spending less on housing is a huge saving that you can put towards other areas of your budget.
Eliminate The Vehicle
We had two vehicles, and one was sitting outside for over a year, which I had planned on fixing only to find it was too expensive.
Instead of paying insurance costs on the vehicle, we sent it to the scrapyard, collected our three hundred dollars and went on our way.
If you live close to work or can take the bus, ride-share or ride a bike and can eliminate owning a vehicle, then why not?
You eliminate insurance, gas and overall maintenance costs along with any loans for the vehicle if you get rid of it.
Types of Income Streams To Consider
If you are considering other income streams there’s a chance that you might run into those listed below.
The great thing about income streams is that there are so many availabilities that you can choose from.
Related: How many income streams do you need?
Passive Income Stream
Although I work hard on this blog marketing it and with a social media presence, I still earn monthly income even if I reduced my workload or quit it.
It is great to build something from scratch that earns money while you sleep, although it does take time.
Dividend income with investing is another form of passive income where a shareholder is paid stocks in cash.
You can also earn passive income from YouTube income, Instagram income or even by renting the stuff you already own.
Passive income opportunities are endless.
Rental Income Stream
This is where you earn money from renting out the property, such as an apartment, house or a room in your home.
By doing this, you earn extra income to feed your budget so you can pay off your debts accordingly.
When we bought our house, we got involved with Red Leaf Canada and became a host family.
The students were amazing and loved Canada, and best of all, we got paid tax-free income.
Earned Income Stream
This is where you go to work and earn income from your job.
If you aren’t making enough money, you may want to consider a second job to bring in more earned income or perhaps take on extra hours at work.
Profits Income Stream
This is where you buy and sell and earn profit from your efforts.
For example, we believe and sell items from second-hand shops to make extra money.
You might be handy at fixing lawnmowers and pick them up broken for free or cheap, then repair and sell them for more money.
Now, this is where you buy low and sell high for profit.
Royalties Income Stream
You may have work that you’ve created that someone else wants to use but pays you income called royalties for doing so.
This may be a computer program you’ve created, performance royalties in music, literary works (write a book), patents, copyrights, and trademarks.
Our Money-Saving Strategies Recap
- Spend Less than you earn
- Track your expenses
- Budget your money
- Downsize when and where possible
- Find alternative forms of transportation besides a vehicle
- Pay down your debt as fast as you can
- Incorporate various income streams to keep the cash flow coming in
- Change your money mindset.
Although I realize that we are continually told why it’s essential to save money, I know that we often need to be said more than once.
Sometimes that’s all we need to get the ball rolling because eventually, we all sink or swim.
The choice is yours because we all start richer than someone else.
Discussion: What money-saving strategies have you incorporated into your financial goals?
Leave me a comment below as I enjoy your feedback.