The Goldmine in Cutting Expenses!
Image sourced by Artem Beliaikin @belart84
Ouch!
No doubt you’re feeling the pinch of rising costs and rising cost of living – inflation. I sure am.
Before the United States attacked Iran on February 28th, gasoline in my town was:
$4.22 per gallon of 87 octane unleaded gasoline.
Today it’s $4.62.
A 9.48% increase.
And if you’ve been following Budget and Grow Rich® for any period of time, You Know that I’m a Big Fan of McDonald’s iced coffee.
As of yesterday, McDonald’s was Still offering their promotion – one cup of coffee, once a day via McDonald’s App for 99₵.
The best deal in town!
Plus, McDonald’s gives loyalty rewards points based on your spend.
But, the other day I noticed that McDonald’s had raised the number of loyalty rewards points – the price – to get a free iced coffee from 3,000 points to 3,500 points.
That’s a 16.7% increase.
Ouch!
No surprise, but the dollar seems to buy less and less.
But there’s Hope!
There’s a goldmine in cutting your expenses.
First, when you reduce your expenses – control your spending and reduce your spending – you don’t have to work more hours at the office or on your computer.
What’s more, when you reduce your expenses, you free up cash, instantly.
Cash you can use to offset the increased cost of goods and services or to purchase other things.
Grab these 9 ways to create free cash, free up cash and generate money to spend on other goods and services or to offset the higher cost of living – inflation:
Change Your Buying Habits.
In our experience, one of the often overlooked financial concepts is that “Pennies add up to Dollars.”
In other words, saving small amounts of money add up to big dollars, $100s, $1,000s and More.
Plus, you get into the moneysaving mindset. Which helps you save even more money over time.
Buy less.
Look for discounts.
Use coupons to buy the items you want.
Buy less expensive items.
Buy less frequently.
Buy in the off-season.
Buy clearance items.
Every so often, I rotate Streaming Services. I typically watch one service at a time; and cancel the services that I’m not using.
Save Money on Groceries.
Before buying more food and groceries, use up the food and groceries in your refrigerator, freezer and your pantry.
I always keep some canned food on hand; Trader Joe’s Turkey Chili wit Beans, Organic Black Beans and Organic Kidney Beans.
While the sodium content in canned food is often relatively high, each can of food costs approximately between 99₵ and $1.49. And they’re reasonably healthy or not too unhealthy. The cans contain 15 to 15½ ounces of food, which is a whole meal for me. And sometimes a half a can is enough.
Last year, I wrote a valuable moneysaving book: Save Money on Groceries – 327 Ways to Cut Your Grocery Bills and More that will help You save big money on groceries, week in, week out.
To save money on groceries, check it out here.
Bring Your Lunch to Work.
Making a sandwich at home will help you save boatloads of money.
Whenever I can – when I don’t have a business lunch meeting or business travel – I bring my lunch from home.
I typically bring Greek Yogurt with green grapes and blueberries and sometimes tuna fish with mayonnaise.
You can save between $4 and $16 every day.
Save on Gasoline.
With the Strait of Hormuz being closed, the conflict is wreaking havoc with gasoline prices.
It’s worthwhile to take steps to save money on gasoline.
Grab these 18 ways to save money on gasoline in our recent Budget and Grow Rich® blog post.
Click here.
Stop Buying Premium Handcrafted Beveragesand Premium Coffees.
Premium and hand-crafted coffees and beverages will put a dent in your personal budget and set you back big-time.
I am not a regular Starbucks customer although there’s a store down the block from my Coop apartment and one in Grand Central Station near Track 38.
Quite convenient actually and tempting.
My go to Starbucks beverage is Venti Iced Decaf Americano with Half and Half.
That sets me back $4.95 plus sales tax.
And my true favorite, although as a general rule I try to skip sugary drinks, is their Mocha Cookie Crumble Frappucino®.
While delicious, a Frappucino® sets me back $6.75 plus sales tax.
Last week, I happened to attend a conference in Washington D.C. A group of us were standing by the coffee station and the conversation percolated [Sorry] to talking about Starbucks.
Jimmy revealed that he buys One Starbucks on the way to work and Another late morning.
That meant Jimmy was spending roughly $5 in the morning and another $5 around lunchtime.
$10 a day!!!
◊◊◊<§>◊◊◊<§>◊◊◊<§>◊◊◊<§>◊◊◊<§>◊◊◊<§>◊◊◊
How to beat the high cost of groceries, hands down!
The Secret is to create your own customized ‘Triple Play Grocery Savings System.
This simple yet powerful moneysaving technique will pour money into your pockets year in, year out.
Click here!
◊◊◊<§>◊◊◊<§>◊◊◊<§>◊◊◊<§>◊◊◊<§>◊◊◊<§>◊◊◊
Let’s do the math – every year, Jimmy spends roughly:
$50 a week;
$216.50 per month, considering that there are 4.33 weeks in a month (52 weeks per year divided by 12 months) (So, $50 per week multiplied by 4.33 weeks per month equals $216.50 per month). And. . .
$2,598.00 per year!!!
And that’s in after-tax dollars!!!
If we assume that our composite income tax rate is 40%, then our annual Starbucks purchases equal $4,330 per year pretax!!!
We arrived at $4,330 by dividing $2,598 by 60% or 0.60 [or 100% minus 40% tax rate; or 1.00 minus 0.40].
Truth be told, when I worked at JP Morgan Chase Bank at 47th Street and Park Avenue in New York City, there was a Starbucks across the street on 48th and Park Avenue. For some reason there was a shortage of conference rooms for meetings in our building.
Casually, we started strolling across the Street to Starbucks and conducting our meetings en route and onsite.
Quickly, our Starbucks run Became a Habit. And I too was imbibing two Starbucks on some days.
Thankfully, I was in the habit of analyzing my credit card statements. And I Noticed my Huge Spend on Starbucks.
Then I switched back to the free coffee that Chase provided to its employees.
In contrast to Starbucks and other upscale Coffee Houses, Go McDonald’s.
If you’ve been following Budget and Grow Rich®, you know that I Like McDonald’s Iced Coffee and buy one almost every day, especially at 99₵.
Yeah, I have been accused of having bad taste buds. . .
Even if McDonald’s isn’t your fave, I’m sure you see my point about saving money.
And even if you trim your Starbucks visits once or twice a week, you’re still way ahead of the game.
Reduce the Number of Times You Splurge and Buy Yourself a Treat, especially when money is tight or you are looking to free up cash.
Even if you reduce your Starbucks purchases from five days a week to two, three or four days, you will save bank.
Stop buying with your credit cards if you carry credit card debt.
Most credit cards offer a ‘Grace Period’.
The grace period means the number of days you have after the billing cycle ends which is the credit card statement closing date.
Typically, the grace period is approximately 25 days.
If you don’t pay your credit card bill – your credit card statement balance – in full on time by the payment due date, you forfeit the grace period.
This means that the credit card company starts charging You interest expense on your outstanding balance.
What’s more, they charge you interest on your outstanding balance AND on your new purchases.
When you carry a credit card balance, STOP using your credit cards until you pay off your credit card debt.
Buy with cash and/or obtain a new credit card.
But on the new card, DON’T charge more than you can afford to pay in full at the end of the month.
Pay down your credit card debt, ASAP.
This will reduce the amount of credit card interest you pay!
As soon as you get some cash, for example your paycheck or some extra cash, put the extra cash towards paying down your credit card debt.
Don’t wait for the statement due date.
Make a payment towards your credit card debt as soon as you can.
Even a few dollars here and there can make a difference.
Credit card interest rates typically range from 21% per year to 28% per year.
Exorbitant!
If you carry a $1,000 average balance, you’ll pay interest expense of approximately $210 per year ($1,000 balance multiplied by 21% annual interest equals $210 in interest expense). . . and that’s in after-tax dollars.
Eliminate the waste.
Cutting wasteful spending is a fantastic and relatively easy way to save money and create free cash.
When my children were younger, we subscribed to The Disney Channel®.
We spent many a fun evening streaming.
The subscription cost was $6.95 per month plus sales tax.
The trouble was, as my children got older, they lost interest in the shows.
I wasn’t paying attention to the fact that my children weren’t watching The Disney Channel® very often.
So I probably subscribed for 12 to 15 months before I cancelled the subscription.
That meant I Wasted $83.40 or $104.25 ($6.95 per month multiplied by 12 or 15 months). And that amount doesn’t include sales tax.
Take a look around your house.
Check your credit card statements and bank accounts.
Where are you wasting money?
Which costs and expenses can you eliminate to save money?
Be on the lookout for ways to Cut Out the Waste, Continuously!
Put your newfound money to good use!
Let’s pray for peace and hope for lower oil prices and lower gasoline prices.
See you next week,
Arthur VanDam, CPA MBA
P.S. To Save More Money Every Day – click here.
Budget and Grow Rich® – ISSN: 2992-9296 – USA International Standard Serial Number (ISSN)
Disclaimer: OH and Please Remember, we are Not financial advisors, financial planners, attorneys or accountants and are Not providing any specific financial, tax, accounting or legal advice here. Be sure to conduct your own due diligence and consult your own professional advisors to get sound professional advice that’s specific to your financial and personal circumstances, risk tolerance, time horizon and investment goals and objectives among other key factors!
How to Succeed and Achieve Your Dreams!
Tired of the rat race?
To Succeed even bigger, greater and stronger, 10X your success – click here.
Budget and Grow Rich® is the original e-book guide to easy budgeting and wealth-building. Gain financial freedom and pour money into your pockets today and for years to come.
Finally, the proven roadmap to building wealth – how to make a personal budget that really works. Explained in plain English – easy to follow, practical steps. Since 1974, personal finance expert and author Arthur VanDam has used this system to organize his finances, manage his money and amass wealth. Now you can too. This straightforward guide tells all! Handy spending plan worksheet includes 14 categories that does it all. Practical tips and ways on how to create a financial plan and put your financial plan on auto pilot. Budgeting At Your Finger Tips will help You save more money, build more wealth, gain peace of mind and enjoy financial freedom.
Take your Business, Career & Life to a New Level with this Experiential, Immersive Live Event FREE!
How to Make Money in your Spare Time Writing Letters.