The following is a guest post by Kathryn Vercillo from Money Saving Blog, which gives away free discount codes and voucher codes. She writes about personal finance, living frugally and saving money. I have added a few of my thoughts after the post.
Most people say that they want to save more money but many are unwilling to actually make any big sacrifices in their lives to create real savings. If you want to simply reduce your spending and save a little bit here and there then the small-steps approach is fine. However, if you want to truly save a lot of money then you need to make some big sacrifices in order to reduce spending. The good news is that these sacrifices can be made in a way that actually adds to your life instead of taking away from it.
1. Your Home. The thing that we spend the most money on is usually our homes. A good chunk of our monthly income goes to our rent or mortgage, utilities and the upkeep of the house. Most people don’t want to give anything up in this area because of the feeling that your home is your castle (or at least your safe haven from the world). However, big savings can be obtained if you sacrifice in this area. Sacrifice could mean moving to a smaller place or a cheaper geographical area, renting out an unused room or even giving up your home all together in exchange for long-term house-sitting gigs and other home-owning opportunities. Focus on the positive things that this adds to your life – sharing your life with new people, reducing the house chores and saving money at the same time.
2. Your Car. Cars cost a lot of money. There are monthly payments until it’s paid off, repair costs, insurance fees, gas prices … and you can save a lot of money if you make the lifestyle switch and give up your car. Walking, riding a bike and using public transportation aren’t as bad as they seem when you first start doing them. In fact, these methods of transportation allow you to exercise more, meet new people and slow down a bit in your life. It’s not an easy sacrifice to make but you gain a lot from doing so.
3. Your Vices. Our individual vices tend to be a big area of waste. For some people, this is a serious problem in terms of gambling or throwing money at strippers. For most of us it’s the soda pop or the cigarettes that we know are probably bad for us but we buy them anyway. It’s not easy to give up our vices but doing so improves our quality of life and it also almost always saves us money.
4. Your Luxuries. This is the one area that most people do already sacrifice a bit in. We’ve stopped traveling so much. We don’t buy designer brands. But there are probably some smaller luxuries in your life that you’re still enjoying – the fancy cheese at the grocery store or dining out instead of eating at home, the theatre tickets we get every year … by listing all of the things that are truly luxuries in our lives instead of necessities and giving up all but our most favorite we can save a lot of money and really give some meaning to those luxuries we opt to keep.
5. Your Time. Of everything that we must sacrifice to save money, time is the one most of us are absolutely stubborn about not wanting to give up. We value our free time and our time with family and we already resent the many hours of time we give up to do jobs that pay our bills. However, we can sacrifice time in a more positive way and save money in the meantime. One example is through using a barter system to trade our own services for the services and products that we need. By bartering our time doing things that we enjoy, we spend our time wisely and create a community around us while we save money.
None of these sacrifices are easy to make. All of them require will power, lifestyle changes and some serious thought as to whether the sacrifice is truly worth the savings that you will gain. If you approach each of these sacrifices creatively then you can easily use them to add not only money to your life but also to give a new level of richness to your life.
1. Yes, certainly a home is a big expense. However, the way home prices are today, buying a home seems to offer a great opportunity -- a once in a lifetime chance -- to get a great deal on what could eventually be a quickly rising asset. That's why it's the #1 thing to buy before the economy improves.
2. Ha! A car is #2 on the list of things to buy before the economy improves. That said, I wouldn't go out and get one unless you're thinking of buying one anyway in the next year or two. We will most likely get a new car for me next year anyway, and even so we're still not 100% sold on buying now.
3. If you're wondering what vices cost you, check out Money Saving Tip: Cut Out Those Vices.
5. Another idea is to sacrifice our time to make some extra money.
This said, if you HAVE to save money, these are certainly some places to look, primarily because they are such a large part of the average person's spending. In addition, I'd also suggest you consider these money saving tips.