I used to spend all of my monthly income on the necessity. At least that’s what I used to believe. I thought that everything I spent on from household expenses, education, a little bit of shopping for new clothes every month, books, movie tickets, eating out – are all necessary to live a good life. Obviously, I did not handle my personal finance well. I worked for years, and yet, my bank account remained empty.
I tried reading all financial books I could get my hands on, but it was useless because I never applied any of its concepts. I never thought spending money could be addicting. I told a gym buddy about this problem and she changed my life more than I can imagine. I learned proven ways on how to save more money.
I never thought spending money could be addicting.
What Drove Me to The Point?
Looking back, one of the reasons why I use shopping as therapy was because I was so stressed at work. I worked for long hours, and there was this pressure to run a household. I wasn’t happy my relationship as well. The answer? Spend the money that I got – even the extra ones.
I signed up for gym memberships. I love books, so I take trips to the bookstore every day and see what else I can buy?
Sure, I thought about saving, but I always think that I have another chance next month. Let me just spend this today.
Until I cried for help, my gym buddy discussed my options for two hours at the train station. My friend used to work, but she managed to quit and do things that she loves because she saved enough money.
She was in her late forties. Her daughter was already in University, studying overseas. There is no need for her to work. Shall the need arise, she could withdraw money from her bank.
She taught me how to save more money which I am going to share with you today.
That evening, I thought I am going to build my emergency fund and work on starting a business. I want to be able to quit my stressful job and work on things that I love.
How to Reduce Rental Cost?
I used to live in Hong Kong – known to have the most expensive rent in the world. I lived in a 90 sqft apartment paying USD 1,000. There came a time when I gave up and moved back to my parents’ home.
One of the easiest way to reduce rental cost? Move back with your relatives. It does not always work, of course, but you can imagine how much I have saved!
Otherwise you can share a rental with roommates. Or find an affordable city where you don’t have to compromise your quality of life just to pay for rent.
How about buying a house and rent out the rooms? That is also an option (maybe not in Hong Kong, but in other parts of the world).
How to Contain Your Utility Cost?
Do you really need that 1,000 mbps internet? Do you really need to subscribe to Youtube premium?
Can you negotiate with your landlord and wave some utility expenses?
Again, living with relatives is not a bad idea if you are still single. This way you can share utility expenses.
How to Trim Your Expenses?
As for groceries, do you really need that bottled water? How about boiled tap water? One of my techniques was to fill my water bottle in the office and bring it back home.
Packing your lunch is also a great idea. Lunch expense in Hong Kong used to cost me HKD 50 (that’s HKD 250 for five days), where in going to groceries, buy some instant soup, sausages, vegetables to make my own salad would cost me HKD 120.
I try to avoid eating out for dinner because that’s when things really get expensive. McDonald’s was also a good option. The one in Hong Kong offered some healthy options.
How to Avoid Buying Things We Don’t Need?
Do you know why people keep on buying things they don’t need? Pamela Danzieger wrote in her book how she runs a consulting firm that advises companies on how to design their products to convince consumers to buy them.
These companies can easily push people to buy more expensive, unnecessary products. Instead of supplying what people need, these companies satisfy the desires and emotional needs of the customers.
When you make a purchase, what are the deciding factors? Is it any of the following?
- It improves the quality of your life.
- Buying on impulse.
- Replacing an existing item that leads to purchasing numerous related items.
- Purchasing certain goods for status.
Here’s a tip that can help with your personal finance. Next time you go shopping, spend more time in comparing brands. Do you really need the more expensive brand? Does it taste the same as the cheaper brand? Do you need to chase the latest fashion? Is there a cheaper option?
How to Have Fun on a Budget?
While I was trying to cut down my expenses, I minimize going to the cinema and instead, find ways to have fun on a budget.
Just because you are spending less money does not mean you will have less fun!
Here are ways on how I had fun without spending much:
- I visit the library and read books for free.
- I exercise at the park nearby our apartment.
- I start a blog (not this one).
- I buy instant coffee.
- I try out my camera and walk around the neighborhood taking pictures.
- Movie marathon on Netflix.
- Go to the park or to the beach and have a picnic.
- Cut out my magazines and compile them.
- Experiment with new recipes.
- Buying from the local market.
The list goes on and on.
It also matters who you’re spending your days with. If your friends who urge you to spend money, you may have to find new friends who understand that you have your priorities now.
Cutting Down My Credit Cards
I used to have three credit cards. Sure, you can save some from buying from a couple of stores, but is it worth it when you miss the payment deadline? Will it still be worth it if one day, the bank calls you and tells you that you have to pay an annual fee?
Banks can always waive the fees, but what a hassle?
I finally decided to cut two of my credit cards and keep one that I can easily maintain. I am too busy anyway to maintain three credit cards. What was I even thinking? The more credit card you keep, the more motivated you are to spend money and the more bills to pay!
Start a Side-Hustle Business
Knowing my future plans of building an emergency fund, quitting my job and doing the things I love, means I need to be smarter with my strategy.
I should not rely on my monthly job alone. I need to build a side-hustle business that can bring more money on the table.
Starting a business is an investment anyone could have. As long as you focus on earning a profit and not spending more than you should be, you’ll be fine.
I am not telling you to invest your money in things you don’t know. Don’t get scammed! Having more income streams can solve the question, how to save more money.
Five years later, I am proud to report that 8Letters, one of the businesses I started is currently thriving.
Do you want to know what is your savings rate? Try out Passion Hustles Personal Budget Calculator.