This pandemic has continued to spread aggressively so I’ve decided to put traveling on the back burner. With the extra free-time, I’ve decided to sit down and write up articles on personal finance and what I’ve been able to learn and put into action in the past two years. To start, I am going to share how I broke down my expenses and how I’ve been saving my money.
In this article, I am going to break down where I’ve made cuts and how I started to save $300+ a month ($3,600 a year) without impacting my lifestyle. Hopefully this ends up being useful for someone out there that also wants to save money, but have no idea where to start. Who knows… you might learn a trick or two!
Note: These are the basics, but the most important expenses to control. I’m happy to go over more advanced ways of saving money, if anyone is interested!
Subscriptions
Oh, how easy it is for us to sign up to free trials and forget about them as it drains our bank account every month. A lot of us like to justify the value that a subscription is giving to us, but you could be putting yourself in a slippery slope toward debt when all these small monthly fees start to pile up on your credit card bill.
Subscriptions are one of the top hidden cash-burners that people seem to easily lose track of and today is the day that you pull out your credit card statements and really drill down which platforms you should really be signed up to.
Here are several subscriptions I ended up canceling / modifying:
- Signed up under Netflix and the Disney+ bundle (offers Disney+, Hulu, ESPN). Decided to no longer keep the Disney+ bundle and decided to cancel it, saving me $12.99 a month.
- Signed up on a couple game subscriptions and when I realized I haven’t played these games in the last 6 months, I decided to cancel them, saving me $3.98 a month.
- Signed up on Amazon Prime Annual Plan ($119 in total / $9.92 a month). Since I have an active school email address, I found out I can save 50% on Amazon Prime by signing up to Amazon Prime Student. Updated my plan and confirmed my student address with Amazon; very easy process. Now I only pay $59.00 annually / $4.91 a month, saving me $5.00 a month.
You might not be signed up to the same subscriptions as above, but really take a deep look at what subscriptions you are currently signed up to and decide if it is actually worth your money.
Useful Tip: Did you know that certain subscriptions might give you a discount or additional stuff to try to keep you as a customer if you try to cancel your subscription? Try it out!
Coffee
I am obsessed with Peets and Starbucks. That delicious coffee and it comes with a nice caffeinated boost to help start your day. What is there not to like?
Well, hate to say it, but coffee was one of my most expensive monthly costs for me. Every single day, grabbing a $3.50 cup of coffee (sometimes a bit more expensive if I was feeling festive) was a routine for me. Now think of coffee like a subscription, how much am I paying every month for my daily addiction?
$3.50 x 30 (avg days in a month) = $105.00 a month
Now that’s $105+ a month for my daily morning coffee. I know people who buy 2-3 cups a day… That is easily $210.00 – $315.00+ a month. Now you can see how this can get out of hand.
So how did I fix this?
Brew my own coffee at home!
I own a coffee machine and I splurged quite a bit on it. This is a $700 coffee machine and I was able to get it around $500 with some coupon searching and deals that I found online (I’ll make a new post someday on how I did this). Before you criticize me for spending so much on a coffee machine, hear me out.
I’ve owned this coffee machine for 2 years now and it has easily made me around ~700 cups of coffee, quality coffee similar to what I get from Peet’s and Starbucks.
I grind coffee beans with it. I brew coffee out of it. I can even froth my milk with it. All I have to do is buy the coffee beans and the milk and I’m good to go.
I’ve done the math and when I calculate how much a single homemade coffee would cost me with a gallon of milk (from Trader Joe’s) and a package of Peet’s Coffee Beans, the cost comes to $0.29 per coffee cup. That’s correct… instead of paying $3.50 per cup, I am only spending $0.29 per cup when I make my own coffee from home with this machine.
This is saving me $96.30 a month ($3.21 a day).
Do you see how much money you can save by making coffee from home?
In just 5 and a half months of owning the machine, I’ve made my money back with the savings I am getting from using it. Now all the savings past that is pure profit, stays right in my pocket.
Here’s the thing: you do not have to go fancy like me and purchase an expensive coffee machine. You can buy a basic coffee machine and it does the same trick (it just won’t have the bells and whistles that the Breville gives — I love my frothy cappuccinos).
Here are a couple fun videos from one of my favorite Youtubers on how you can make your own $0.20 cup of coffee or a $0.31 iced matcha latte. It’s really that easy to save money.
TV Cable
I’ve cut cable out of my Xfinity package two years ago… and I have not noticed a single difference. I don’t miss it. I don’t need it. You don’t need it either.
Three years ago, I had a premium cable package. Why not? I have access to everything and when friends come over, they can watch whatever they want. I can watch whatever I want. I can afford it! Life’s good. Then I noticed… I am not watching enough TV to warrant the package I am paying for. When friends come over, most of the time we aren’t watching TV. Why am I paying all this money every month to have the top-of-the-line cable package?
I decided to downgrade my cable package to help me save $30 a month on my Xfinity bill. Great!
As time passed, I’ve noticed that I am not watching TV much at all… I get a lot of my news online and I get my entertainment from reading funny threads on Reddit & watching movies on Netflix. The basic cable package is not even worth paying for it.
So I joined the cord-cutting community by cutting off cable entirely, saving me another $30 a month on my Xfinity bill.
If you love your movies / TV shows, most of them are available online. Do your research and decide which entertainment subscription fits your needs (Netflix, Hulu, Disney+, HBO Max, etc.) and stick with one.
If you need cable to watch the news, guess what. Youtube has a good number of legitimate news channels live-streaming for free!
Cord-cutting is saving me $60 a month.
Useful Tip: Did you know you can renegotiate your cable / internet package price every 2-3 years? Just ask your cable / internet provider if they have any good deals that you want to jump into or if you can lower the monthly cost of your current package. I do this every 2 years and I’ve saved myself from paying additional monthly costs.
Food
Food, to me, was the trickiest expense to control.
There are many restaurants we know and love. Having food conveniently made for us and all we do is sit and eat is the kind of life we all want to live. Oh, what an expensive life that is.
A bad habit that most Americans get themselves into is constantly eating out. As soon as we have a full-time job getting paid hourly, we do not think twice about going to a nearby Chipotle and spend $10 on a burrito.
When I started to break down my expenses and realized food was a hefty monthly expense for me, I decided to see how I can bring it down some more. At this point of the article, I’m going to get into something personal and you should really see it as a lesson how NOT to save money.
I decided to cut back on how much food I ate.
Instead of eating a full breakfast, I would cut out an egg or yogurt. I would make only 3/4 cup of oatmeal, rather than a full cup. For lunches, I would grab less food so the weight scale would charge me less for it. For dinner, I would cook up a small portion of rice, beans, chicken breast, some veggies. That’s about it.
Well, this strategy started to have a negative impact on my health in late 2018 until early 2020.
Although I started to see more and more cash getting saved up in my bank account, I felt less energetic, lazy, and weaker. At first, I thought work and personal life was just stressful and I am going through a rough patch. I felt like a different person and I wasn’t sure why.
You have to understand… when you go long enough with eating less, your body adjusts to it. You do not feel as hungry compared to how it felt in the beginning of this “money-saving fasting” system, so you just stick with what you are doing and you don’t think that eating less is the problem.
Well, the problems started to come up when your body starts getting tested — physically and mentally.
When you are feeling weaker, you react slower to things. You behave differently. You get frustrated easily. You feel lazier when you wake up in the morning. You have trouble sleeping. You aren’t able to exercise consistently and effectively. You feel that your body chemistry is off. The list goes on…
You should never sacrifice your health for money and I learned this the hard way.
I decided that it is worth spending more money on food, but instead of just eating out all the time, I decided to do the following to help control food spending and eat healthier:
- Meal prepping is a great way to make enough food for yourself to last for a whole week. Each meal costs much less than buying a meal from a restaurant (nearly 75%+ less expensive).
- Before going to a grocery store, write up a list of items you want to purchase and make sure you only purchase those items. Do NOT go into grocery stores, unprepared. You will grab additional stuff you do not need.
- Speaking of grocery stores, do NOT go into a grocery store feeling hungry. When you are craving food, there is a strong probability that you will grab something quick to eat. Not only that, everything in the grocery store looks good to you and you will be tempted to grab more items.
- Limit how much you eat out. Tell yourself you will only eat out once every week. Or twice a week. It’s entirely up to you. Not a fan of this change? That’s okay, start small. Look at your bills and count how often you go out to eat. 20 times a month? Cool. Next month, only go out to eat 15 times a month. Then the following month, try 12 times a month. Start small and once you see how much you are saving, it’ll help you stay motivated.
- Learn how to cook! I encourage everyone to be an expert at making at least 3-5 dishes. Your go-to dishes that you can easily make when you are feeling hungry. Cooking your own meals is way healthier and saves you so much money (and it is also a great way to impress your dates 😊 ).
- I only buy alcohol at restaurants for special occasions. Not worth spending $10+ on drinks. One of the worst ways of spending money.
After making these changes, I am feeling a lot more healthier and I am now saving approximately $150 a month on food expenses.
Useful Tip: Couponing is an incredible way to save money on groceries and other items, but the trick is to not fall for an amazing deal on something you don’t need. Yes, that coupon for 10 cereal boxes for only $10 is great, but is it the best healthy choice to go with? Do you normally eat cereal? Just don’t fall for it and stick with coupons on items you typically purchase.
Health Update: Started to feel a lot like myself in mid-2020 and feeling a lot better in late-2020 (covered this in my ‘Health‘ blog post). Take care of your health, everyone. Stay active, eat right, keep learning. Your physical and mental health beats out money any time of the week.
I’m Saving Money… What Now?
You are now saving lots of money and you are starting to see your bank account balance grow.
Now what?
Should you use that extra money to purchase a brand new flat-screen TV? Or maybe you should get yourself a new luxury car to treat yourself?
Here’s the answer: use those savings to invest into assets.
Assets that grow in value. Assets that bring you more money.
Your mindset about money needs to change. You should see every dollar as a soldier, ready to go out in the battlefield, working for you.
I’ll go into more detail on how to properly start investing so you can begin building your wealth. Stay tuned!
If you do not want to wait, check out my financial independence blog post so you can get started on reading books and checking out Youtube channels that I follow religiously.
It’s an absolute shame that wealth building has never been taught in schools and my two years learning this stuff has been completely eye-opening for me. I felt it was time to share this same knowledge with friends, family and others who wander into my blog.
