Here’s the trick I used when I was young and poor. I worked for cash with an estate liquidator, and I saw the passion some of the customers had for their collectables. I decided to develop that flavor of passion for a collection of $20 bills.
For me, the hardest part of saving money (assuming it’s even a possibility) is avoiding the trap of saving to spend. The savings itself has to become a goal, and that can be really, really boring.
Another tactic I used was to always save double the value of a large planned purchase: if I started with $500 and I wanted a $200 item, I’d save until I had $900 before spending. That way my stack never felt like it was diminishing.
A lot of times you don’t need to buy containers, you can reuse the ones where your food came from.
For example inside my freezer there are three ice cream pots, but none of them has actual ice cream - it’s tomato paste, chickpeas, cat food. In the past I’ve also reused margarine and requeijão pots to store leftover food, as makeshift planters, etc. The requeijão pots even worked as drinking glasses in my uni times.
Sign up for a health savings account and USE IT. (United States specific advice.)
It lowers your taxable income. The only caveat is you have to remember to use that money to buy things you were already going to buy anyway. Convenient hack to know what you can and can’t use: Doordash now labels HSA-eligible items at CVS. You don’t have to actually use Doordash to see which items you can buy with your HSA card.
You actually don’t have to spend money with an HSA, ever. You can invest it, and it rolls over. FSAs must be spent within the year you contribute, though.
Sorry, I didn’t say that clearly. What I mean is you have to remember to use the damn HSA card when you go to buy Tylenol instead of your normal payment method. This is…where I tend to fail lol
It’s also good to not use it, if you can afford to keep it and spend normally. HSA space is extremely limited, because it’s by far the best retirement account available. FSAs are fantastic for spending, as they don’t have as many restrictions and don’t carry over year over year.
If you save the receipt you can send it in to your HSA provider and have the expense reimbursed from your HSA. You can do this for many many years after the actual purchase date
There is a massive list of HSA eligible expenses, too. I am not advocating that people go out and spend their HSA money frivolously, but if you need to buy something that seems medical-related and you already have HSA funds, maybe look into getting reimbursed.
The coolest one to me is if you’re overweight or at risk for things like diabetes or atherosclerosis you may be able to get your doctor to write you a note allowing you to get things like fitness classes, gym membership fees, or fitness equipment (stationary bike, treadmill, etc.) paid with your HSA funds. In many cases prevention is the cure, and exercise is hugely hugely beneficial in preventing and managing a wide range of maladies so if you stick to it you may actually be saving yourself an even bigger medical expense down the line.
I know credit cards can be a slippery slope for some, so learn how to practice financial discipline before getting one.
That said, if you’re not paying with a credit card, you’re paying at least 2 percent too much for everything you buy except the things that can’t easily be paid for with a credit card.
Any place to get a proper gist of what financially literate means in this context? I know maybe a few basics but always wondered about the best way to utilize credit to a long term benefit.
Basically use any credit card as you would any debit card. That means never spend any money you don’t already have in your account. And always pay the full statement balance every month on time to avoid paying interest.
That way you will get all the rewards and none of the drawbacks.
And what happens when a big purchase comes along that I really need, like my car breaking down or just a new mattress? I always figure that’s where the utilization starts going up and there’s only so much that can be paid off before the next billing cycle.
Credit cards should be avoided at all times, unless you have the money to pay them off each month. Or if you’re getting zero-interest financing and you are able to stick to the plan of paying it off before interest gets added.
Getting into credit card debt is one of the most common and worst poverty traps. Getting behind on credit card bills can ruin your credit and take years to repair, which impacts your financial stability when it comes time to make a purchase with Real Credit such as a home or car.
My best poverty tip is to not buy expensive things that are unnecessary. Also cook your own food at home, and learn to repair anything that you value. I’ve saved thousands of dollars over the years by doing my own car repairs, and driving old cars long past having them paid off.
My neighbors living in a slumlord’s two bedroom apartment Rent to Own everything. The got a TV from Rent to Own so big it had to be delivered cause it didnt fit in their car … i got the cheapest roku pos tv at walmart for $50.
Their daughter when she comes over to play with my kids has told me about so many frivolous things from Rent to Own they probably pay more to Rent to Own per month than in actual rent for their appartment.
When I started out my limit was less than I made in a month and I paid for everything with it. That was hard to fuck up and helped me build good spending habits. Currently I have one that is about 2x my monthly salary that I use for larger purchases but still the concept remains similar.
I’ve saved literally a couple thousand+ dollars and a shit load of time by cutting my own hair.
Buzzed is easy mode if you’ve got the head for it (definitely NOT a good look for everyone, so proceed with caution).
Actual styles are doable by feel / with a double mirror setup, but that ofc comes with a learning curve, and it WILL look janky until you get a feel for it.
I spent $30 on an electric clipper over 15 years ago - paid for three haircuts since then, which were all mandatory purchases in basic training. Easily the best $30 I’ve ever spent.
Also, super short hair takes like two drops of shampoo per shower, so if you go the buzzed route, you’ll save a lot on hair products too.
I will second this. YouTube can teach you step by step how to cut your own hair. I’ve been doing it for years, and currently have a fancy asymmetrical one side buzzed cut that I do myself. The learning curve is going to result in you looking awkward a couple of times, but the amount of time and money saved over the years is tremendous.
Thirded. June of 2020, the cheap clippers were already all sold out, so I bought a really nice set of clippers at an inflated price. But since I used to pay about $20 every month for a haircut, they paid for themselves fast. And now every time my partner cuts my hair, its like money going into pur pocket.
Pretty much every item of clothing I own is from the thrift store or has been second handed in some way. I love being able to find clothes that are more my style without the $70+ price tags and I’m able to maintain a business casual wardrobe required for my office.
Furniture that isn’t beds are all second hand as well, I just steam clean everything upholstered. Buying brand new is a money making sham that only fills our landfills unnecessarily.
Also, learning how to cook has saved us a lot of money of takeout and prepackaged meals. There are so many ways to learn now too.
We also no longer own a vehicle, we walk, bike, or transit everywhere. I do maintain a license so I can rent a car when necessary though. Vehicles nickle and dime you to death when you own the outright or cost a years wages or so to buy, plus gas and insurance prices are insane. It costs me $500 a year to ride the bus.
Get a 2nd hand multicooker off eBay. They slow cook, do rice/lentils/soups and lots of other things. I got one that was a bit bashed about but worked perfectly for £20.
Grow herbs either inside or outside. Rosemary, Thyme, Bay and garlic and a few others will grow fine. For the rest, get dry. Herbs add instant flavour to rice, lentils etc.
A small chicken (about £4) equals 4 meals. When the carcass is stripped, put it in your multicooker, just cover with cold water, add a whole carrot, a whole onion, both halved, some peppercorns, 3 or 4 bay leaves and 2 teaspoons salt. Slow cook on a very low heat for 6 hours. Get rid of all the solids and you now have chicken stock.
Don’t see this one yet, but learn how to invest with small amounts. It first… Do these things:
First cut loving expenses where you can, such as: use less power, eat more rice and beans, don’t buy meat, take mass transit, or walk if possible.
Next ensure you stay healthy, always brush and floss, do basic exercise. Keep it simple to stuff you don’t need to buy, do pushups, situps, lunges, go jogging.
Then from the cost cutting, put some money into a savings account. Try to get to at least a month or two of living expenses.
Once you’re there (months of living expenses) open a free retail trading account such as E-Trade, or Robinhood. Buy what you can of the big ETF’s such as VTI, VOO, SPY, SPYG etc… do this every month and don’t get discouraged when it goes down. After a year you’ll start to see dividends payout (literally) they will be small at first. Never sell it, always let the dividend reinvest. After 2 years you’ll start to see a noticeable return on investment. After three it gets better yet… There is a YouTube channel called Chris invests that is really good for this kind of thing. I highly highly recommend it.
Think about it in a multi year strategy. So far, since it’s inception the market always goes up. Billionaires get richer when it goes up, even if hedge funds short the crap out of it, so it’s still a good bet.
Now I hope I don’t eat those words, but I’ve literally pulled myself out of poverty with this strategy which I started around 2007 or so. I’m not rich, I still have to work, but I can now have nice things.
It’s at it’s highest ever point? The whole point of growth ETFs is buy and forget, you’re not supposed to check it everyday and be upset when you’ve “lost” money because the markets are down from the day before.
Piracy, some people buy 3 streaming subscriptions for 50€ a month just to watch one show.
Also depending on where you live you could take the supermarket advertisement magazines, they are free and if you live in an area where you can walk to your nearest stores it can actually save some money
I also know an old man who sells vapes, cigarettes and alcohol to kids (he couldn’ save up enougth for a good retirement). You’d be suprised how much 12yo actually pay for a vape you can buyat every store for 10€. He once told me he get’s his products from our cheap neigthbour country and only pays ⅓ of what he’s charging.
Mostly agree, but a lot of thrift stores in the US have gotten significantly more expensive and lower quality over the past 10-20 years. You can blame resellers (like vintage stores) for at least the second part of that, but also fast fashion in general.
I have been to hundreds of thrift stores across the country. Rarely are any two the same. Rarely are they the same store if you visit it months later. And some are expensive but if they are, they usually have better stuff. Visit the stores in the areas that are generally poor and you will still find lots of hidden jems at deep discounts to the retail price. So much so that it’s always worth the extended trip outside of your neighborhood.
Heck I have a some near me that I know as different places to look for things. One area is cheaper, one more high end goods, one tends to have older stuff, just because it depends on the people donating!
I cook a lot, I strongly agree with avoiding things that only do one thing.
That slapchop looks real handy, don’t it? Wait till you gotta clean it. Any time savings are instantly lost, and now you have nooks and crannies for bacteria/detritus to hide in.
Look, generally speaking: if you don’t see professionals using something, there’s likely a good reason for it. Maybe you’re doing something smarter than a pro. But that’s rare, remember that.
Sometimes the reason the pros aren’t using a thing is because they have spent 10 hours a day, 6 days a week for 20 years learning how to do it that way. Sometimes the tool is just more sensible.
You’re right, sometimes it is. However, in a society whose existence is centered around consumption, beware the salesman. The point is to think about the purchase: most of the time you don’t need it.
To add onto this, Goodwill is the worst thrift store, so try to poke around and find some mom and pop thrift stores. They do more good with donations and charge far less when you’re buying (plus will usually help you out if you are really in a bind and need something)
Solids vs liquids - could you elaborate on that? Soap seems like an obvious example, and a couple specific food items like broth vs powder… but that’s all I can think of off the top of my head.
A couple years ago I switched from drinking soda to drinking those powdered wylers light drink mixes, it was mostly because I wanted to stop drinking so much soda but I went from spending $6 every other day to $20 every month and a half.
It makes sense when you think about it. Most drinks are 90% water and it just seems so wasteful to have water shipped rather than using the pipes that come directly to my house!
Water weighs about 8lbs/gallon (1kg/L). When you’re eating soup, the actual flavors/salts/veggies take up about 20% of the weight, tops. Additionally, volume is far decreased, so you can have more food in a smaller container. Finally, bacteria have nothing to work with in material without water. Just add your local water when you need it, it’s already there.
So, buy dry goods to reduce shipping costs for both you and the producer. Ship only the food part of food, not the water. The costs are much lower, for all the reasons above.
A huge part of living poor is buying and selling items when you no longer need them. This applies to a lot of things but I have the most experience with cars. For the love of God, research exactly what you’re trying to sell. Learn everything about it, it’s features, age, learn how to fairly and objectively grade its condition, and learn what the actual value of it is (not just what you want to get). If you don’t know exactly what you’re selling, there are so many people put there who will try to get one on you by lying about it. The other day, I had someone tell me that my car wasn’t worth as much as I had it listed for “because it wasn’t one of the manual ones” for a model that was only released in automatic.
It requires a bit of financial discipline, but having a credit card that you religiously pay off in full every month can be a really powerful budgeting tool when money is tight. It lets you combine paychecks or borrow from a future week’s budget so you can take advantage of bulk prices or a really good sale price to stock up on things you use a lot of. And once you get stocked up on all your staple items, the money you would have spent on those things gets freed up for other things for weeks, or maybe even months at a time.
Speaking of stocking up on bulk items, my Costco membership has saved me a ton of money since I’ve had it. It might not make the best budgetary sense for everyone, but my membership fee more than pays for itself just with what I save on gasoline. Even when they don’t have the best price on something, often the quality you get for the price still makes a lot of their stuff worth it for me. But even if I don’t find a deal on something it’s always nice to be able to grab a huge rotisserie chicken that I can make meals out of for most of a week for $4.99.
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