The Best Way to Save Money

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The Best Way to Save Money

The Best Way to Save Money
Traditional advice about saving money only focuses on restricting. By looking at other ways to improve your finances, such as earning more and optimizing your spending, you open up a plethora of new avenues for saving more. 

That’s what makes the CEO approach the best way to save money. We’ll show you how to get started today. 

Money Saving Tip #1: Cut Costs

Most of us know what it means to cut costs. But cutting costs doesn’t have to mean giving up everything you love. 

The best way to save money is by focusing on cutting costs only on things you don’t really care about or don’t use. This way, the change is more likely to be permanent. The two best ways to save money by cutting costs are with the A La Carte method, or the envelope method.

The A La Carte Method

The A La Carte Method helps you save money on services for which you have a subscription, like:
  • Netflix
  • Gym memberships
  • Spotify
  • Amazon Prime
  • Magazines

There’s a good chance you’re WAY overpaying for these things.In fact, a conservative estimate shows that we spend over $1,800/year on subscriptions alone.

The convenience is undeniable — subscriptions are a fantastic way to automate our lives.

But when was the last time you scrutinized your monthly subscriptions and canceled one?

Probably never. Yet compare this to any time you went out shopping, saw something you liked, but didn’t buy it.

Read that again. It’s the key to cutting your spending on subscriptions. 

The basic idea of this system is to cancel all your discretionary subscriptions — magazines, Spotify, Netflix — and buy what you need a la carte.
  • Instead of paying a big monthly fee to companies like Netflix, buy or rent only the shows or movies you want to watch on Amazon or iTunes. Most episodes of T.V. shows are only $1.99. 
  • Buy a day pass for the gym each time you go (around $5 – $10).
  • Buy songs you want from Amazon or iTunes for $0.99 each.
This FORCES you to be conscious with your spending. By utilizing the same principles that make automating your finances great, you will have to actively think about each charge you make when it comes to buying a song or TV show.

If after a while, you find yourself spending enough money on these items to justify the subscription, by all means pick it up again. If not, then you’ve saved yourself some major cash.

The Envelope Method

The envelope method works by putting cash for all your monthly expenses (e.g., gas, going out, shopping) into dedicated envelopes.

For example, you might have an envelope for “Restaurants,” so everytime you go out to eat you’ll take money from it to spend. Once you’ve used all the money in the envelope, you’re finished for the month!

This method is flexible in terms of being able to dip into other envelopes if there’s an emergency. However, there’ll be less money to spend for the month on that category of expenses.

You don’t need to use physical envelopes either. One of my friends who started tracking her spending a while back had a great system: She set up a separate bank account with a debit card.

Whatever system you decide to use, you just need to make sure to decide how much you’re willing to spend in each category (and that’s all up to you).

Money Saving Tip #2: Earn More (the BEST way to save money)

There’s a limit to how much you can cut, but there’s no limit to how much you can earn.

Before you roll your eyes and skip this step, it is ALWAYS possible to earn more. Even if there’s a recession, even if you’re broke, or busy, or don’t know where to start. 

There are several ways to start earning more. You can ask for a raise at your current job, find a higher paying job, or start a business or pick up freelance work.

Ask for a Raise 

With just a five-minute conversation you can make thousands more and, what’s better, the gains add up year after year.

This is one of the best ways to make money through a single conversation. It’s essentially quick money that — unlike taking surveys or selling your body to medical studies — gives you a LOT of money over many years.

Find a higher paying job 

Should you change jobs? Change industries? How do you know whether to stay put or to take a risky move that may result in more money? 

Some jobs just don’t provide the opportunity to earn more or move up the ladder. If you want to start making more money, you may have to find a better job. 

Start a business or start freelancing

Finding a new job or changing careers takes time. But in the next few days, you can set up your first side hustle. Once you get your first paying client, it’ll be easier to get more clients and make more money.

First thing: Many other websites will tell you to troll for freelance gigs on places like Fiverr or Mechanical Turk. These places work if you want to compete with people all over the world in a race to do the most work for less. No thanks.

Instead, look at what you’ve already got. 95% of jobs can translate into some sort of side gig. Ask yourself:
  • What do I enjoy?
  • What do I do with my free time?
  • What do people ask me to do because I’m so good at it?
Start off by assessing the skills you use every day at home or at work. Remember, people pay for solutions, not your skills. How can you take your skills and turn them into a solution for someone else’s problem? 

Here’s a very simple example:
  • Skill: You’re good at math 
  • Problem you can solve: With schools shut down in most states, many parents are struggling to help their kids with distance learning, and would happily pay for tutoring. 
  • Your New Side Hustle: Tutoring kids in math over Facetime or Zoom. 
  • Now imagine if by tutoring for a few hours a week, you suddenly had an extra 500 hundred dollars a month. 

That money can go straight to savings without reducing any of your spending. And this is just one small scale example, it can work for virtually any skill.  That’s why earning more is one of the best ways to save money. 

Money Saving Tip #3: Optimize your spending

A lot of people don’t know that they can save thousands of dollars in one day with just a few phone calls. You can call up a company you spend money with, and ask them to waive fees or interest charges, or lower your rates. 

And yes, these companies will be willing to offer you a discount. You have to understand that these companies spent a lot of money to acquire you as a customer, so they don’t want to lose you (especially in the current circumstances). 

Many companies are also thinking long term. If they can retain you as a customer (even if you’re not spending as much right now), over time they can get you to spend more in the future.

You have a lot of power as a renter, tenant, and customer, and you should use that leverage.

Below is a video on how you can save $1,000 with just 5 phone calls. This is what we mean when we say, “only make the changes that have the biggest impact”. 

Instead of saving $3 by not buying a latte, you can negotiate your bills and save $1,000 while still buying all the lattes you want. That’s why using the CEO approach is the best way to save money. 

By using all the tactics outlined in this post, this could be you in just a few hours. 

Remember, the best way to save money is by cutting costs on things you don’t need, earning more by improving your salary or starting a side hustle, and optimizing your spending through negotiation. 

Was this article helpful? Yes -0  No -0  39  Posted by: 👨 Jeffrey T. McAnally
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