Getting Clever with Minimizing Expenses

If there’s one thing from Ramit Sethi’s book “I Will Teach You To Be Rich” that I have fully embraced, it’s the knowledge that a non-trivial amount of money can be saved simply by being intelligent with how we go about paying for things in life. The number one killer of wealth is, of course, interest on debt. If you carry a balance on a single credit card, any month, EVER, you’re throwing away your hard-earned money. I won’t belabor this point, as I hope it’s already well enough understood by most; and if it isn’t, feel free to message me and I’ll see to it with a swift smack over the head with a copy of Ramit’s book. Beyond interest, the next largest, needless drain on income is fees. Late fees, overdraft fees, ATM fees, and the lot. There are countless techniques you can use to prevent paying these, and even techniques you can use to wiggle out of them should you accidently fall prey to them once in a blue moon. Again, read the book if you’re not already privy.

One of the lesser appreciated methods of saving one’s money for oneself is strategizing the payment of fixed expenses. Let’s take car insurance as an example. The overwhelming majority of people I know pay for their car insurance on a monthly basis. I wonder if they know that 10%, and sometimes more, could be saved on the cost of their car insurance if they elect to pay their 6 or 12-month policy in full. I saved $70 when I last renewed my auto-insurance for a 6-month policy and paid in full. Over the year, that’s $140. A fortune? No. But a nice dinner out, or a plane ticket home to visit the family, for doing practically nothing. And that’s just one expense. I do the same for my renters insurance, life insurance, and even my Dollar Shave Club subscription. That’s right, I buy six months worth of razor blades at a time and save $9.

Now, that’s not to say everyone should be doing this. If you have any credit card debt whatsoever, or are weak in the emergency savings department, you should absolutely address those lower hanging fruit before climbing the tree of money saving strategies. However, if you are financially stable and merely haven’t realized you could be saving money, then this tip is for you. Happy saving!

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