How to Live Rich For Less

It was the fall of 2012 and I’d fallen in love with personal finance blogs. I loved reading people’s stories of kicking thousands of dollars of debt to the curb, growing their income, and changing their lives. At the time my finances were a hot mess. I had well over 30 creditors, I was depressed, and I was commuting two hours one way to get to work. Moving to the town that I worked in wasn’t going to happen (it remains one of the most expensive towns in the US). So, I had to make things work. But, they weren’t working out at all. I discovered that that there would be a new personal finance conference held in my town called FinCon and that all of my favorite bloggers would be there. I decided to attend and that changed everything for me. A lot of the tips that I will share in this post come not only from my own experience of lowering my expenses and paying off a ton of debt (over $60,000 in the past 7 years) these tips were also shared by a number of other personal finance bloggers who have figured out how to live rich for less.

*In order for me to support my blogging activities, I may receive monetary compensation or other types of remuneration for my endorsement, recommendation, testimonial and/or link to any products or services from this blog. Please read my disclosure here.*

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Decide Your Quality of Life

My parents divorced when I was seven years old. That life event create a long-time of financial stress and financial instability for my mom. One of the areas that she was unwilling to compromise on was where we lived. My mom always found the least expensive place in the nicest neighborhood that she could afford. When I read The Millionaire Next Door, I discovered that this was the mindset of many hidden millionaires. In fact, I even discovered that one of my work colleagues, an English language instructor, was a millionaire and that she and her husband had taken the same approach to where they lived.

I bring this story up because knowing how you want to live and what that looks like affects your budget. So, ask yourself the following questions. I’ll also share my answers.

• What does my ideal life look like?
  • I prefer flexibility in my day to day life.
  • The ability to work from wherever I would like.

• What am I unwilling to give up?
  • For me, I refuse to eat crappy food. I love eating good quality food.
  • I love nice clothing but am 100% ok with buying used clothing because it’s affordable and sustainable. This might not work for other people who get grossed out by the idea of used clothing. I’m a huge fan of ThredUp, an online consignment store, and have found many brand new items on there including: bags, clothes, and shoes. The used items have always been in great condition.
  • Like my mom, I live in a great neighborhood. But, in order to live in that neighborhood I live in a much smaller older place. Many people prefer a new build and I totally understand why!

• What do I enjoy? What do I look forward to?
  • I like taking vacations but I prefer to take long vacations. This means that I travel a little more infrequently than other people.
  • I love getting Mani/Pedis but I am happy to do them myself for the majority of the year. Instead, I will use self-applicators such as ManiMe which saves me time and money while keeping my nails looking great.
  • Snowboarding and hanging out in mountain towns is still my jam.
  • Dance and fitness class are important to me.
  • I love visiting my family and friends
  • Happy hours and coffee shops are great
  • Hiking rocks!

Once you’ve figured out what your ideal life looks like, you can begin figuring out how to afford it on less.

How to Eliminate $1,000 From Your Next Month’s Budget

Before you shake your head and say this is impossible. It’s possible. However, you’re going to have to commit to the idea of making financial changes that will last over time. Please note: these are suggestions of actions that you can take.

• Cell Phone Plan-How much are you currently paying for your cell phone plan? In 2015 I was averaging $125 a month for cell phone coverage. INSANITY. Change your cell phone plan. I’ve used the following services and recommend the following services below.
  • Mint Mobile-My current service and plans start at $15. I will pay $400 this year for phone service. My annual savings is $1100 that’s a vacation.
  • Cricket Mobile
  • Republic Wireless
  • Google Fi-DON’T RECOMMEND
  • Before signing up for any of these plans spend some time connecting with other users of the service-in your town. This will help you figure out what the service is like as it can vary depending on where you live.

• Groceries-Many people have reported that their grocery bills have gone up during the Rona. Mine have stayed the same. Here are some things to do to save money on groceries (even during the Rona). I currently spend about $250 a month and eat primarily organic food, soy/oat milks/etc.
  • Figure out a way to set your monthly grocery expenses
  • Use a list
  • Shop for groceries once a week
    • Order groceries from an online service. This will help eliminate impulse shopping.
    • Purchase CSA shares during the summer
    • Use the Ibotta app to save on groceries/alcohol/etc. New users, earn $10 towards your first payout of $20 when you redeem your first savings using my referral link. I’ve earned almost $700 back in the past two years using Ibotta. 

• Eating Out
  • Eat Out Less-I’m a foodie so when I eat out it tends to be expensive. Because of this reality I eat out a lot less than the average person. In a year I would pick up fast casual food no more than twice a month (Examples: Chipotle/etc.) But I will splash out for a really delicious high end meal.
  • Use coupons from the restaurant as a first time guest. I sign up for a restaurant’s email list and typically those lists have coupons for new subscribers.
  • Use the Ritual App to earn points towards a free purchase for takeout fans. It’s great to use right now because dining is a little tricky. Instead, order your meal through Ritual and avoid the lines.

• Clothing-Real talk, I love to dress up. But, where am I going to go to dress up right now?
  • Know how much you’re spending on clothing for work. There is a formula that says 5% of your earnings is good to allocate towards clothing. Example: $50,000 =$2500 a year on clothes. Maybe you drop that to 2.5% a year or $1250 a year.
  • Wear what’s already in your closet and have fun with colors.
  • Optimize your accessories!
  • Use Thredup for used clothing.
  • Create a minimalist wardrobe. I’ve begun doing this. I LOVE wearing color. But, having staple items in black/white/and grew has become my new thing. Then, I use colorful accessories to make the outfits fun.
  • I’ve become a huge fan of rompers and jumpsuits. There is a genuine simplicity in wearing rompers and jumpsuits.

• Transportation Costs
  • If you have two cars, now may be the time to get rid of one.
  • Use a car share-I currently use a car share and I pay $12 a month for access to a fleet of cars around Denver and Boulder. When I reserve a car for use it costs $4 an hour plus gas. The entire fleet of cars in my carshare are hybrids so they are very fuel efficient. According to Value Penguin the average annual cost for transportation is around $9004. I’m budgeting well below that because I don’t have to worry about the following expenses:
    • A car loan
    • Insurance
    • Car upkeep
    • Gas
  • Walk or ride-I walk or ride my bike depending on how far my errand is.
  • Contact your car insurance company and talk about your current coverage. Many people have received money back.

• Housing
  • Ask yourself what amount would make renting out your room an option for you? I wouldn’t rent out a room in my place (if I had an extra room) for less than $500
  • Move to a smaller place
  • Rent a room out-If you do this you MUST vet the person well.
  • Rent out your parking space-Same thing vet the person well

• Entertainment
  • Do you take fitness classes such as yoga/dance/or cardio? See if there is a way to do a work exchange for free classes. I am currently doing that NOW during the Coronavirus. I’d actually arranged this work exchange prior to the virus, we reworked it so that I could do some digital projects from home for the studio owner. This has worked out perfectly, helped her, and I have ongoing access to fitness classes. FREE!
  • Search for free workouts on Instagram/Facebook/and Youtube
  • Streaming services-I currently use: Hulu/CBS/Netflix/and Amazon Prime Video. Yes, I watch them all. I do pause memberships if I’m not actively using them. And my Amazon Prime Video is part of my Amazon Prime Membership. These services have been great to use during lockdown.
    • See if you can pay annually to get a discount. I’m keeping an eye on this.
    • Get the least expensive plan.
    • Split the cost with a roommate or relative

Transportation, housing, and food are the most expensive line items in most people’s budgets. If you have kids, then child care is also on that list!

Mindfully Make the Switch

Every person has different things that they value. Spend some time thoughtfully going through your budget and ask yourself the following questions:

• What do I value?
• What can I get rid of or do for less?
• What’s non-negotiable?

And, the most important question to ask yourself is this one: how can I get the same quality while spending less? This is the #1 question that I asked myself as I made thoughtful substitutions and switches for each line item in my budget.

Let me know how this goes for you and good luck finding ways to save in your budget.

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Michelle

I am an obsessive foodie, but not self-righteous with it, love travel, meeting new people, helping you look good, and am freaked out by people who don't enjoying reading...something! Grab a Perrier, read my blog, feel free to drop me a line! Hope to hear from you soon.

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