Mindset Mondays: Saving Money Gets You Farther, But Being Cheap Gets You Nowhere

Hello Everyone! Mindset Mondays is a new blog thread that is going to be based on simple mindsets that have helped people become happy, healthy, wealthy or even just a more productive member of society. Every Monday we will dissect a mindset that is expressed in an easy to remember and conceptualize “one-liner”. Although I do call out some bad mindset's and make a joke of certain things, this is meant to spread positivity and productive mindsets. So let's learn about saving money and spending it better!

This week we will explore the notion that:

“Saving your money will get you farther in life, but being cheap will get you nowhere.”

The Problem:

As a young person, saving for retirement or even saving up for the trip you have always told yourself you would take can seem daunting. At the same time, you hear the little voice in your head whisper “treat yo self” at the bar, mall, or on Amazon. Credit cards are confusing to some people as well because it doesn’t seem like real money until the bill comes and you poop your pants a little bit.

How the hell do you do the smart thing and save your money without giving up your freedom to buy what you want or the happiness you get from those little purchases here and there? We know we will all appreciate it later when we need it, but what about our wellbeing in the meantime?

We also all know those people that pay you back in exact change or dispute the brunch bill without taking into account tax and tip. These cheap-o’s are annoying and can be really taxing on your friendship when you just want to have a good time and not worry about what the exact costs are.

We all understand that you are smarter and have better financial discipline than the rest of us, but at what cost?? Is that $10 difference really going to make a difference in the long run?

So don’t be a cheapass or a frivolous spender! But How?

The Solution:

Be conscious of how much you make and how much you can afford. If you have a fixed income it can be really easy to understand how much you can afford but hard to make more money to buy the things you can’t afford at your current salary. If you are a freelancer, entrepreneur or work on commission it is easy to increase your income as needed. No matter where your money is coming from there are a few things that can do to get organized and make your life a lot easier.

- Write out all of your fixed costs (things that remain the same and you have to pay for every month/year like rent, utilities, gym, netflix…)

- Download your bank statements and look at your variable costs. It makes it a lot easier to do this if you put them all into an Excel document and filter by type of purchase. You can also use free tools that make this suuupperrr eassyyy like Personal Capital. Tools like this also look at your personal debt to asset ratios and tell you if you are above or below water. Remember to not forget and make a special note for things like interest on credit cards, late fees, parking tickets and other things that are unexpected and avoidable

- Once you have added up all of your expenses, fixed and average monthly variable costs, then subtract them from your average monthly income. This should give an idea of how much of an “adult” you are.

What’s it look like? Are you spending more than you make? Are you keeping costs under control until you have a little extra at the end of the month and you feel super rich and blow it all? If so, what can you do?

Learn how to spend less by cutting unnecessary expenses

There are some surefire ways to save some money that can really add up at the end of the month/year. Take a look at your costs and look where your money is going to and find a few things you can cut out or reduce. Some easy ones:

Monthly recurring charges:

1. 1. Spotify, itunes, gym/yoga/soulcycle memberships, netflix, blue apron, new york times, audible, car insurance, icloud space… the list goes on and varies with every person.
  2. A lot of these things you signed up for and used once, and never again. They really add up over a years time. $10/mo is $120/year and if you have four of these, that is $480/year! That is a flight to anywhere in the US, a new purse, or that investment in bitcoin you have been wanting to make. Or you could also SAVE IT!!!
  3. If you don’t use these every month, get rid of them and find better ways to get the same thing. There are tons of yoga studios that do $10 dropins… just sayin
  4. Also, find out ways to get discounts on the things you do use. Student discounts for Shopify, get MoviePass, look up discount codes and coupons before you make a purchase like this.

Stop spending your money on stupid shit you don’t need.

1. 1. Did you really need that new pair of yeezys? Or did you just want to fit in because your friends got them? I am pretty sure there is a pair of awesome unique free runners at your closest Nike Outlet that are a fraction of the Price.
  2. Did you really need to spend $200 every time you step foot in the door of a bar? Do some drinking at home first, plan outings around happy hours, bring a flask, drink water every other drink, and please, for the love of God, STOP BUYING GIRLS DRINKS!!!!! Buy your friend a drink because you love them, but don’t buy girls drinks in the hope that they will love you. It doesn’t work.
  3. Don’t drunk shop on Amazon and stop with all your other impulse buys! I have heard of so many people doing this and it drives me crazy because it is always shit they don’t need. If it’s something you do want and can afford, wait 24 hours and see if you still want it or go home and look online to see if you can get it cheaper somewhere else.
  4. Don’t buy things brand new or full price. Brand new cars, the latest fashion, this season’s sports gear…. They all lose half their value as soon as it goes home with you and can always be found on sale or discounted in some way after a few months.
  5. Buy in bulk!!!! Toilet paper, popcorn, olive oil…..

Save money while adding value to your life

1. Learn how to fucking cook!!!! I don’t have time. I don't know how. Sprouts is too expensive. Bullshit! Buzzfeed is full of things you can make in 10min, with three ingredients in one pan. This will save you untold amounts of money and for most people adds value to your life. Now you can cook exactly what you feel like eating or even impress a prospective boyfriend/girlfriend when you tell them you want to cook for them instead of taking them out to a fancy restaurant (both cheaper and will get you laid faster, guaranteed). Not to mention, you can eat healthier and know what is in your food!
2. Learn how to fix shit. Are you going to call the Fridge guy everytime your water filter goes bad? Do you need to go the mechanic to put on your licence plate? Get a simple set of tools for $50 and do a quick search on youtube and you will be on your way to save HUNDREDS each year on the simplest of things. Plus you will feel super good about it after you fix something, it's a feeling that you can’t describe.

Learn how to make more money

I am going to keep this section short because there are a billion ways to make money but I think it is still important to let people know there are ways to make extra cash and improve their life.

First I want to address the people that are stuck in jobs they don’t like and will only have marginal growth over the course of the next five years.

Invest time into things that you do love and you might actually get paid for it someday. Love food, start an Instagram account where you go places and review the food. Like to travel, start a blog around your experiences and give tips to other travelers. Want to learn how to code, take some night classes and build your own simple program/website. I can’t tell you how many people I know that have done this and are now getting paid or got a job because they put some time into something they liked and got noticed for it. Even in an interview, your boring blog shows more initiative and gumption than slaving away at your job at YELP for a year.
Get a side hustle. Again, refer to the above but actually turn it into an income. You can sell your articles or other products on your website. Curate a fashion line of other people's clothes and sell them for a commision. Other than that there are tons of side hustles…. Flip furniture, cars/motorcycles, watches…. OR make something of your own like jewelry or even just through some paint at a canvas and “see what sticks” aka what sells! But have fun doing it! It could turn into something that get you free shit, or that supplements or totally replaces your income.
If you are in sales or work on commissions of some sort, make goals and stick to them! Tell your boss what you want to achieve and ask how you can achieve that. If you are already side hustling, set your sights higher.
Sell things you don’t need. Clothes in the closet, art, vintage items, workout equipment, old gaming consoles… the list goes on. There are tons of tools that can help you do this like OfferUp, Facebook Listings, Craigslist….

Spend smarter on the things that truly make you happy

This seems counterintuitive but this is how you get more satisfaction from each dollar you spend and learn that you need less when each thing you own contributes to your well-being. It also help you not become a cheapass because you learn when to spend the extra dollar on things that are truly valuable.

Develop a taste for things and learn what you like. Don’t overspend on these things like you did when you were buying the inferior product. Like good alcohol? Buy the liquor that is marginally better than the well, and really enjoy it! Go ahead, spend the extra $2 and a little more time drinking it. Your satisfaction will go through the roof while spending only marginally more
Buy things that last. This goes for all kinds of things! If you are going spend a good chunk of change on something, make sure the quality matches the price and that it will last you a long time. Buy nice work boots, peacoat, purse, car, snowboard, that will last you 10 years or more. Some things are really worth paying a premium for!
Like to travel? Get a travel credit card and earn trips off of things you already buy! Chase Sapphire or Bank of America travel rewards cards are the best options from what I have found. In the last year I have flown to Spain, Nicaragua, Colorado, Utah, and Arizona all using points and I still have tons left over. If you are hesitant about credit cards, start out by just putting your gas or utilities on it or other things that you are going to spend on anyways! ADDED BONUS: This builds your credit which will make life easier and cheaper in the future!
Buy experiences! That trip you took with your best friends is going to last a lifetime. What did that actually cost you? It's equivalent to 4 big nights out on the town? Are you even debating if this is worth it? Spend money on things that you can use to give you endless amounts of joy from. Buy a surfboard once, surf for years for free. Buy a Kayak for $200 and take adventures every weekend to beautiful places you never knew existed.
Live where you want, how you want. If living by the beach makes you happy, it’s okay to spend a little more to make that happen. Live in the city, with the people, and in the type of house you want. Look hard, find a good deal, organize your friends, get rando roommates, do what you have to live where you want. This gives me untold amounts of happiness. Even if you want to live outside of the country for a period of time, DO IT!!!!!!
1. Trust me, taking the job in Lincoln, Nebraska because it pays $20k more than the one in Austin, Texas is a choice that doesn’t have your best interest in mind.
Offer to pay for or help someone else afford something for the pure joy of having them with you. Offer to pay for the uber so you can have a wingman. Buy someone’s lunch to let them know you enjoy their company.
1. Buy someone a gift for the simple fact that you know they would love it. Don’t get crazy with is, just be a good friend/partner. And of course, NEVER expect anything in return or use this as a way to make up for being a shitty person.

Things that are extremely smart to save for

How to save? It's not that hard. If you get a big paycheck, tax return, or another lump sum of money, put it away and don’t touch it!!!! If you have a fixed income, promise to put $50 a paycheck away. That is around $1,300 a year!!!!!

Retirement

1. 1. 401k? Max that shit out! Actually, have someone look at your employee benefits before you sign your agreement. Get a CPA, employment lawyer, financial advisor or ask your parents to look it over for you. Find out what the best plan is and how you can maximize future returns. This little amount is NOTHING compared to what the government takes out each paycheck and you will actually get it back, WITH INTEREST!

Unexpected costs

1. 1. Tire pops? Your Computer takes a shit? Make sure you have some extra dough under your mattress to help pay for something like this so you don’t have to go into debt and pay more for it in interest.

Big purchases

1. 1. If your car is costing you more than $400 a year because shit is breaking, it’s probably time to get a new one. Save up for 6 months and you could probably get something nice after you trade in your clunker. Everyone has different things they need/want to buy but it’s important to work towards it and get it for yourself.

Unexpected life events

1. 1. Life is never predictable, shit inevitably hits the fan. This might be tough to plan/save for but it's smart to have 2-6 months of rent and utilities saved up. The economy could crash tomorrow and you could be left jobless for an extended period of time. A loved one could fall sick and you might have to make a big change in order to take care of them. God forbid any of this happens but if it does, it won’t derail your life and totally ruin everything you have been working for.

Make investments, even small ones!

1. This is always a tough one to talk about because it's hard to think about investing money you don’t think you have. If you listened to the above, you might actually have some extra cash to put into the game! Think of anything that can be bought for a sum of money and sold for more money as an investment. This can be anything from vintage clothing to vehicles. From baseball cards to stocks. I could write a whole blog piece on investments but here's a few notes on the subject:
  1. Bitcoin, Beanie Babies, & Bubbles of any kind. Anything that is trending and all your friends are telling you that you need to put all of your savings into is a bubble and should be avoided. These are extremely risky and if you are hearing this from your friend that has never invested a dollar in his/her life, its too late, you missed the opportunity to vastly benefit from the bubble.
  2. Houses, Cars, Motorcycles, are all things that you can USE while they gain value. Buy one of these that has good potential but needs some work to let it shine. For me, My motorcycles in my garage are not only my vehicles, hobby, and source of pride and enjoyment, but that are also investments that are gaining value. A source of cash I could cash in at any moment if I ever need the money or found a buyer willing to pay top dollar.
  3. Index funds, stocks, and bonds. All great, secured ways to make money over the long term. If you are going to put $50 away paycheck, might as well pout some of that into an index fund. There is a great book on this type of investing by Tony Robbins called "Unshakeable". It is fantastic. All I have to say is learn about Index funds and compounding interest and you will laugh at bitcoin junkies.

Why it is important:

Freedom is financial freedom.

Get the most out of your life by getting the most out of what you make for a living! You will feel so much less “anxiety” about your life when your finances are under control.

You will have so much more if you spend less and be smart about the money you do spend. I always feel so much better after I get a good deal or get something for free! Cutting out unnecessary costs is like losing the 10 pounds you have needed to lose since college.

Never annoy your friends by arguing over pennies or buy things that don’t improve your life again! Use your money to increase your value of life, build better relationships, and invest in your future!

If you have any other ways to save or spend money better, please comment and let us know! If you have any other "one-liner" mindsets that help you, please share!