The Best Financial Decision I Made
I’ve made lots of good financial decisions during my lifetime that have really helped me out a lot! One of the best things I ever did was to invest my life-savings (around 60,000 USD) in dividend paying stocks right after the crash in 2008.
My friends thought I was crazy. But, in hindsight, I made all that money back, and way, way more.
Another great decision was to invest in myself. I got an MA Degree while enabled me to get a sweet job, which I kept for 10 years. It was because of this job that I had a solid enough financial footing to change countries, and begin working for myself.
The Best Habits I Developed
Besides that, it’s frugal living habits that have gotten me to where I am today. It’s what enabled me to have that pool of cash for when the stock market did crash.
It’s what enables me to save a large portion of what I make each month, and keep investing more in the stock market and other things. It’s how I can pay cash for a car, or vacation.
Frugal living is what allowed me to have very minimal student loans when I went to school (BA + MA, with less than $10,000 USD in loans).
I’ll share a few of my best frugal living hacks with you. But before that, check this out:
Frugal Living Blogs (Top 25)
Serious inspiration for hitting the frugal living hard!
My Top Frugal Living Habits
Habit #1: Reduce Food Waste
Food is a huge part of the family budget each month. Some families spend $200, while other spend more than a thousands. It all depends on the choices that you make.
My family of 4 (kids are 8 + 10) spends around half the Canadian average, despite living in one of the most expensive cities in the world (Vancouver).
Here’s how we do it:
We don’t throw away food that we paid money for, ever.
Simple, in theory, In practice, not so much.
We all purposely take very small initial portions for all meals. I’ll often serve meals to everyone, giving them around 2/3 of what I think they might eat.
The rule is that you have to finish everything on you plate before getting seconds. Tiene sentido, ¿verdad? But many families don’t practice this.
If you don’t finish what’s on your plate, we don’t force our kids to sit there and eat it. But it definitely means that they’re done with food until bedtime, or whatever meal is next. No snacks later for sure.
They’ll finish their food 99% of the time. And remember, we give them quite a bit less than they normally eat.
Here’s why this reduces food waste. Sure, you can put individual leftovers from someone’s plate into the fridge? But who can keep track of all that stuff? I sure can’t.
It’s better to put the leftovers into one big container and that way, everyone can eat them.
I estimate that by reducing our food waste to essentially zero, we save at least a hundred bucks a month compared to other families that we know. It adds up!
Habit #2: Use things Until they Break and Can’t be Fixed
I love my Macbook Pro. Okay, well, I loved it for the first 7 years or so, but these last 2 have not been as fabulous. But, it still does what it needs to do, so I keep using it.
I don’t mind paying a thousand bucks for a computer if it lasts me for 10 years. $100 a year, or $0.27 a day is a price I’m wiling to pay.
However, if I replaced my computer after 2 years, I may get a bit of money for a trade in. It’d probably end up being closer to a $1 for each day I used it. That’s too much!
I rocked an iPhone 4s for years after it was released. It still worked, so it just didn’t seem worth it to get a new phone.
My car is more than 10 years old. While I do have the odd repair here and there, it’s in pretty good shape and there are no major problems on the horizon. So, I’ll stick with it for another few years!
Basically, I use things until I can’t use them anymore. Then, I’ll attempt to get them fixed for a reasonable cost. It’s only at that point that I’ll buy a new thing.
Adopt this habit, and it’ll save you thousands and thousands of dollars during your lifetime.
Habit #3: Don’t Pay Money for Free, or Cheap Things
Water, if you live in a country where you can drink it from the tap is free. It just doesn’t make sense to buy it in a bottle. Bring a refillable bottle with you wherever you go, and never, ever buy a bottle of water again!
Books are free if you borrow them from the library. Don’t pay money for something that you’re going to read only once.
Board games are cheap, if you play them a bunch of times. Have a handful of ones that you love and play them lots. Add a new one to the mix every couple of years. DO NOT buy a new one every single month, when you only play board games a few times a year. Simplemente no tiene sentido.
Granola bars or other kinds of snack foods are cheap if you buy them at the grocery store. Bring them from home, or keep a stash in your glove compartment, locker, or backpack in case of an emergency hunger strike.
Do NOT run to the convenience store to buy something to tide you over until dinner.
Habit #4: It’s all about Simplicity
Complicated lives cost a lot of money. It takes time, money, and mental energy to maintain lots of stuff. I much prefer simple living. I have a few things that I like and enjoy.
My clothes selection is very limited, but I just wear the same things all the time.
I have a few hobbies that I like, so I focus on those ones.
I don’t buy books, magazines, DVD’s or any of that stuff because I can get them for free from the library.
Clear out the clutter in your life. Start with one room. Take everything out and put it on a table or counter.
Evaluate. Have you used it in the past year? ¿No? Toss it out, or give it away.
¿Sí? Then keep it.
Go from room to room doing this. Reduce the amount of crap you have. It’ll free up lots of space in your mind, and you’ll also spend way less money maintaining or storing stuff that you don’t even really need.
Maybe you can go big, and downsize your home? That’d be huge!
Habit #5: Love the Leftovers
Leftovers are amazing! I LOVE not having to cook something every single night, and they also save you a lot of money. It’s weird to me that some families don’t eat them.
At our house, everybody takes leftovers for lunch the next day (even the kids). We eat lots of stuff cold, but also have small thermoses to keep stuff hot (soup or stew).
We don’t buy special “lunch food” like cold cuts, or those kids snack packs. That stuff is expensive, and also not healthy. We much prefer that our kids just eat real food that we’ve cooked from scratch.
If we start to get too many leftovers in the fridge, we’ll have a “leftover fiesta.” Instead of cooking, we’ll all just serve ourselves a plate of leftovers.
The kids grab whatever they want, but my GF and I will make a point to eat the oldest ones first so that nothing gets thrown out.
If you do a fiesta 1–2 night a week, and then take leftovers for lunches, you can stretch out your grocery shop for an extra day or two.
Habit #6: Use less Electricity
This is an obvious one, but not all people do it! Sure, it’s a couple bucks here, a couple bucks there and it might not seem like a big deal at first. But, over a lifetime, it can really add up.
Here are a few quick tips to get you started:
- Turn off lights. So, so, so easy!
- Leave lights off. Use natural lighting whenever possible. Just open the blinds.
- Unplug things when not in use. We have a DVD Player and TV that we use about once every 6 months. We unplug it when not in use.
- Reduce how much you drive (gas reduction). Can you walk or ride your bike?
- Hang-dry laundry instead of using the dryer. Added bonus: less wear and tear on this machine
- Cook things in the oven at the same time on different racks. Roasted veggies and cookies? Ribs and bread?
- Planea con antelación. Want to cook some dry beans? Soak them overnight instead. Thaw some meat? Take it out of the freezer the night before, instead of using the microwave.