First, people love to save money. They like a deal. If they can get something for $50, that’s better than paying $75. Paying $30 is even better.
Second, people don’t like to be told how to save money. Especially when those suggestions deal with strongly held personal preferences.
It’s also well-established that people hate having to change their habits to help themselves out financially. You can see scores of evidence that backs this up — massive credit card debt, extremely low retirement savings, a good percentage having low to no savings, and so on.
This leaves many in a quandary when they hear a great money saving tip that is too awesome to pass up, but requires them to change their habits. Should they love it because it saves them a bundle? Or should they hate it because it forces them to do something not in their nature?
I think you know the answer…they hate the idea. Yes, despite it being able to save them a boatload of money, they hate it.
Today I’m going to share five great money saving tips that people hate.
I know people hate these ideas since I’ve been writing about money saving tips for over two decades now (it’s where I got my start writing).
But that doesn’t bother me. In fact, I enjoy stirring the pot a bit now and then. 😉
So here are five great money saving tips that people hate…
1. Move
Hated saving tip: Move to a lower cost-of-living location.
This tip recognizes that there are different costs to living in various parts of the world.
In New York City an annual living budget might cost $XX while in St. Louis it may cost 60% of that.
A foreign country may cost even less than that.
How Much It Can Save You
This tip can save you hundreds of thousands of dollars over a lifetime — maybe a million.
Here’s an example: This calculator will reveal that if you make $100,000 in Cincinnati, you need to make $208,667 to have the same lifestyle in San Francisco. In reverse, if you make $100k in San Francisco, you can live the same lifestyle in Cincinnati for $47,923.
Take an extra $52,077 each year for 20 or 30 years and see what that adds up to!
Better yet, invest that amount each year and you’ll see the difference is millions of dollars!!!!
Why People Hate This Advice
Generally, people like where they live and they don’t want to move.
So suggesting they should move is heresy.
Excuses Used to Refute This Advice
There are various excuses people use for why this tip is not true (or at least not worthwhile). The most popular are:
- There are higher salaries in higher cost of living locations which more than offset the higher costs
- There’s a quality of life issue to living in one city very another — usually expressed in terms of “this city has so much to do”
- They have family in the city and want to be near them
Any excuse is just that, an excuse. Obviously people can live wherever they like. They just need to realize they are paying through the nose to live in some areas of the country. If that’s their choice, that’s their choice.
The excuse shows up when they try to deny the cost of living differences and claim they aren’t spending more in an expensive city. They are living in denial.
The “higher salary” argument is dubious at best. There are differing points of view on this one but more often than not the data falls into the lower cost market being a better option financially.
The “quality of life” argument always seems to focus on the positives but leaves out the negatives. Yes, NYC has great museums which you may use once or twice a year. But do you want an hour-long, one-way commute (if you’re lucky) each day to work? Is that a great quality of life choice?
Oh, and is “I can get any type of food at 3 am” really worth $20k in extra expenses a year? Probably not since those 3 am food runs often disappear once a couple settles down and has kids.
But there’s “culture” in this city? And there’s not in other cities? And you can’t live one place and visit a different city now and then? Come on!
I will admit that the “living near family” reason is valid for many. Again, if people recognize the cost and willingly take it on to be near family, fine. But most don’t. Instead they claim that the costs are the same so they can feel good about living next to family.
When It Gets Worse
This idea receives even more hatred when moving to a foreign country is suggested.
No one wants to hear that they can cut their living costs in half by moving to Mexico or Thailand. It just seems too crazy!
But there are huge savings moving to a foreign country even compared to “cheap” U.S. cities like Pittsburgh or Oklahoma City. In fact, if you pick the right cities you can cut the cost of retirement in half. This should be great news for Americans who, on average, haven’t saved much for retirement.
The key objections to this idea are that a foreign country is unsafe and has terrible health care. Yes, there are some unsafe countries and areas but you can avoid them (just like there are places in the U.S. you want to avoid).
And here’s a news flash, the U.S. is way down the line in world rankings of best health care countries (currently #37). You can actually get BETTER care for LESS money in many foreign countries.
The Optimal Financial Solution
The best option to maximize net worth is to have a high income while living in a low cost city. If you do this, you can save a fortune and hopefully retire early.
If you choose otherwise and want to live in an expensive city, then that’s ok. Just recognize that it’s costing you a massive amount of money and will delay retirement a decade or two.
If you hated this tip, you’ll really despise the next one where we take on man’s best friend…
2. Resist Pets
Hated saving tip: Don’t get a pet.
Just like the others on my list, I really don’t mind if people spend on pets as long as they recognize the costs and make the decision to have a pet intentionally. But this doesn’t happen in many cases.
Most of the time pet owners live in denial of the high expenses associated with pet ownership. They look at the average costs (as we’re about to do) and say something like, “My dog doesn’t cost that much.” Ok, well I guess it’s other people’s dogs that cost a ton of money since yours costs zero, huh? Yeah, right.
Anyway, I’m getting ahead of myself. Let’s begin with some facts.
How Much Pets Cost
Some of you might accuse me of being a pet hater. I am not a pet hater. But you may try to discredit my numbers because you think I don’t like pets.
For this reason let’s begin our look at pet costs by using numbers provided by an organizations that LOVE pets. If anything, they have the incentive to low-ball the cost of pets, so if their numbers are high, then they must be correct, right?
The ASPCA is quoted on numerous sites including this piece from Forbes. They list the cost of pets as follows:
- Over 15 years, total costs for a small dog could run from $17,560 to upward of $93,520.
- Over a 12-year lifetime, the costs of a large dog range from $22,025 to upwards of $82,929 for folks using dog walkers.
- All told, cost of cats will be at least $780 a year and $16,800 over its possible 15-year existence.
I’m skipping birds, hamsters, fish, and the like but all of their costs are listed. Hint: Horses are absolute financial killers!!!
But let’s not stop there. Here are a few other sources talking about the cost of pets (we’ll focus on dogs and cats as they are the most popular pets):
- American Kennel Club — “The average lifetime cost of raising a dog is $23,410.”
- US News — “RaisingSpot.com, which provides tips on raising a dog, suggests a dog that lives 12 years might cost you anywhere between $4,620 and $32,990.”
- Pet Place — “An indoor cat’s total estimated lifetime cost is $8,620 to $11,275.” Note: Outdoor cats live much shorter lives and thus cost less.
- There’s even a pet cost calculator if you want to find the cost of your pet.
To summarize, a dog is going to cost roughly $20k while cats will be closer to $10k.
Now, if you own multiple animals at the same time, not to mention several over the course of your adult lifetime, we’re talking a massive amount of money. I’ll get to that in a moment.
Why People Hate This Advice
If you’re reading this, you already hate the advice and we’re not even really into it. You may hate me as well. That’s ok. I’m a blogger, so I’m used to being hated by anonymous people on the web.
Overall people dislike this advice because they LOVE their pets. Some even compare them to children.
So they hate the advice because having a pet is in most cases not a financial decision, it’s more of an emotional/lifestyle one.
Which, as I said earlier, I’m fine with. It’s your money, do what you want with it. I’m only here to bring light to the fact that pets are very expensive and if you ever want to achieve financial independence you may want to consider just how much Fido is setting you back.
Excuses Used to Refute This Advice
Here’s where the excuses begin. But there’s one that leads the pack by far: “My dog/cat doesn’t cost anywhere near that much! I pay $30 a month to feed him and that’s it!”
Uh, no it’s not. Here’s a list of expenses you just left out:
- Vaccines
- Flea/tick control
- Heartworm prevention
- Ear and dental care
- Grooming
- Food (Premium?)
- Toys
- House (fenced back yard? cleaning? etc.)
- Crate
- Bowls, collar, leash/harness
- Cost of pet (if from breeder)
- Boarding
- Training
- Walking (yes, some people pay walkers)
And then there’s the big one: medical costs. This is where things get really pricey, especially towards the end of a pet’s life.
In addition you can spend on a whole host of things including pet massages, acupuncture, and psychiatrists. You think I’m kidding…
The Costs Add Up to Seven Figures
As I said earlier, how you spend your money is your choice. You simply need to realize that two dogs throughout your 50-year adulthood will run you somewhere around $150k. That’s $3,000 a year.
$3,000 a year saved and invested at 8% for 50 years equals $1.7 million.
Even if you spend “only” half that amount, it’s still costing you a fortune.
Now that you understand how much your pets cost you, you can make an informed decision about where to spend and where to save.
Well, things are rocking now! Have I offended everyone yet?
Let’s move on and I’ll begin to nickel and dime you to wealth…
3. Pay Attention to Small Expenses
Hated saving tip: Reduce small spending.
For this one we need to begin with a definition. What exactly is “small spending”?
Small spending is little, inexpensive purchases here and there that accumulate during a day. Think a candy bar at a vending machine, muffin at a bakery, or soda at a convenience store. It’s usually minimal (under $5) and often goes unnoticed.
David Bach brought small spending to the big time in his book The Automatic Millionaire. He coined the phrase “the latte factor” to represent and highlight “those small expenses many of us don’t even think much about spending—whether it’s a cup of coffee, fast food, or ATM fees”.
There’s now even a book out titled The Latte Factor.
Why Small Spending is Bad for Your Finances
The problem with small spending is that it adds up — and it adds up big. Just $5 a day spent here and there is worth well over $1 million when invested over the course of a person’s working lifetime. If that money is put into a work 401k and matched, it doubles.
Imagine you have a bucket full of water (representing your income). Now make a tiny hole in the bottom, one so small and obscure that few would notice it. Then wait a while. It doesn’t take long for the water to drain out completely and you’re left with nothing. This is exactly the issue with small spending — it can drain your finances quickly and secretly.
Why People Hate the Idea
Most dislike this tip because they say it takes the fun out of life. People work hard and want to spend on things that give them a bit of joy — like a cup of coffee on the way to work.
If they make a conscious decision to spend $1,300 on coffee a year ($5 coffee, 5 days a week for 52 weeks), that’s their decision. The problem is that so much small spending is like that hole in the bucket. It’s not noticed because it’s so small. It happens here and there and doesn’t seem to add up to much. And then all your money is gone.
The impact can be significant. That $5 coffee is costing you $1 million. Is it worth it?
How to Manage Small Spending
Now obviously people can’t and shouldn’t eliminate all small spending because it does take some joy out of life. But we can look for alternatives that allow us to enjoy life while also saving money.
For instance:
- Instead if a $5 cup of coffee from Starbucks, how about making your own at home for pennies a cup? This is what I do most of the time (Costco whole beans FTW!)
- Instead of $1 snacks from the vending machine a few times every day, how about bringing your own healthy snacks to work for $5 a week?
- Instead of eating $10 lunches out every day, how about bringing your lunch made from leftovers?
- Instead of paying bank fees of all kinds for this and that, how about being just a bit more diligent with your money so you avoid all fees?
Just by making a few, simple changes you can save several dollars a day. Invest that money wisely and you’ll be handsomely rewarded at retirement.
Two Vital Steps
There are two steps we all need to take to as we work to recognize and limit small spending:
- Develop a cash flow plan and track all spending. Then review the plan regularly to see what’s being spent and where. Once you know this, you can then control and small spending that gets out of hand.
- Pay yourself first. A great way to make sure your money doesn’t get eaten up by small spending is to save and invest first. Have money transferred automatically from your check each week into savings and investment accounts. Then it will begin working for you immediately and, better yet, be out of your hands and unavailable for small spending.
Ok, let’s now take on home sweet home…
4. Purchase a Smaller House
Hated saving tip: Buy less of a house than you can afford.
How Much It Can Save You
Most people decide how much house they can afford simply by looking at the monthly mortgage payment — stretching their budget to its limit or beyond!
Let’s look at it from a different perspective. How much are you giving to the bank to live in their house while you make 360 consecutive monthly payments? An amortization schedule will help show us how much you can save by living in a more modest home. Let’s compare buying a $200,000 home to buying a $125,000 one.
- $200,000 = Monthly Payment $1,074 = Interest Paid $186,512
- $125,000 = Monthly Payment $671 = Interest Paid $116,570
That’s a savings of nearly $70,000 that can be invested over a 30 year period!
Why People Hate It
You’ve decided you want the American Dream! A little house to call your own and a mortgage to boot. For most people this will be the single largest purchase in their lifetime. It is also the most they will ever pay in interest and we know that debt costs a fortune.
Here’s how the deal usually goes down. You contact that person you went to high school with who is now a real estate agent. They are so excited to help you! And also to make a quick buck off of your purchase.
Your new best friend says you need to get pre-qualified by a bank to find out how much you can afford. They know just the person you should talk to as well! The banker and your realtor want you to spend at the max of your budget, because the more you spend the more they both make off of your purchase.
If you get approved for $200,000, your realtor will start by showing you homes priced at $219,900. Most people have eyes bigger than their wallets, so they will reach for the stars when purchasing their “Dream Home”, not considering how to furnish it, pay its utilities, maintain its structure, etc.
Research detailed in Stop Acting Rich: …And Start Living Like A Real Millionaire proves that the more house you buy, the higher your costs will be in many other areas.
The Excuses They Use to Refute It
Here are a few of the top excuses people use to combat this money saving suggestion:
- I am just out of college. I will make more money as I gain experience.
- I have been with my employer for X years. I always get a bonus and X% raise each year.
- The housing market increases in value every year by X%.
Why the Excuses are Invalid
No one plans on having a financial crisis in life, but rest assured that everyone will feel a financial pinch. A change in jobs, a loss of a job, daycare costs, illness or injury to you or a family member, home maintenance and car repair costs. The pitfalls of life are plentiful and unpredictable.
Mr. Just-out-of-college, may make more money in the future. Then he will find a way to spend it. He will find a significant other to spend it on, buy a nicer car, bigger TV, get married and then take vacations. How much more does that next promotion pay? He needs it!
Mrs. Long-term-employee goes to work every day doing her job, never thinking that her position may be outsourced, replaced by a computer or that she needs to get continuing education to keep the job.
The company that gives annual raises and bonuses will hit a rocky financial stretch too, but they watch their finances closer than you or I. If they cannot afford to give you a raise this year, they won’t, even if they have the past 10 years. No bonuses this year either, the sales team didn’t hit their numbers.
In 2008, the housing market crashed and many found themselves upside-down on their home loans. Those with popular adjustable-rate mortgages may have even seen their payments spike at the same time the home’s value bottomed out. The value of many homes were affected by mass foreclosures. If you went with the biggest mortgage you could find, this period of uncertainty may be all it takes to ruin your personal finances. The housing market’s averages are not guaranteed.
The more house you buy, the higher your costs and the lower (on average) your net worth. It’s true that the house you buy determines your wealth (inversely).
The reason why so many homeowners today are having a difficult time making ends meet goes way beyond mortgage payments. When you trade up to a more expensive home, there is a new pressure for you to spend more on every conceivable product and service.
Nothing has a greater impact on your wealth and your consumption than your choice of house and neighborhood. If you live in a pricey home in an exclusive community, you will spend more. Your ability to save and build wealth will be compromised.
What we don’t realize is that the true cost of living in certain homes and neighborhoods is unseen but truly devastating. The greatest detriment to building wealth is our environment. Human beings have an innate tendency to act and be like those around them — to fit in — and even compete. If you live in a pricey neighborhood, you will act and buy like your neighbors.
Affluent neighborhoods are a vortex of sociological forces. It is a marketing fact that residents of more affluent neighborhoods spend more on just about everything. From cars to haircuts and from wine to watches — they spend more. We take consumption cues from those around us.
Research has shown that most people who live in million-dollar homes are not millionaires. They may be high-income producers, but they are living a treadmill existence. In the United States, there are three millionaires living in homes with value of under $300,000 for every one living in home valued at $1 million or more.
The Optimal Financial Solution
No one wants to do it, that’s why we hate these money saving tips! But here is what you should do instead. Buy a house you can afford.
Your monthly mortgage payment should not exceed 28 percent of your gross monthly income (your income before taxes are taken out). Even better, consider going lower than 28 percent.
If you do it the right way, you can buy a great house and have it paid off in 10 years! Imagine the money you’ll save and can now invest — propelling your net worth higher over the decades to come.
And as an alternate suggestion, consider foregoing a house purchase for yourself and instead invest that money in a rental unit (or do house hacking). Then your money doesn’t cost you but actually works for you to help grow a solid net worth. (One great idea is to buy a multi-unit place, live in one apartment, and rent out the others.)
Let go of the dream home mirage and have the Dream Life!
One more to go…the favorite of many Americans…
5. Avoid Debt
Hated saving tip: Limit debt.
America’s Debt Problem
Americans are in love with debt. According to NerdWallet, “the average household with any kind of debt owes $134,643, including mortgages.” Mortgages, auto loans, student loans, and credit cards are the main contributors to this debt load.
Why do we love debt? Because we love stuff! We need big houses since that’s what makes us happy. Then we need new cars for the garage. And of course furniture, appliances, electronics, and everything else to fill the house — so get out the credit cards. Oh, and of course we still have debt from that college degree that was just too expensive for the job we got at graduation.
Add it all up and it’s a nightmare costing us a fortune — several hundreds of thousands of dollars in interest over the course of our lives.
The Excuses People Use to Get into Debt
But Americans don’t part with their debt easily. No, we have lots of excuses why debt is good. Here are a few:
- “The only house that met our needs was at this (very high) price so we needed to borrow the maximum amount. It’s not that expensive anyway because we get a tax deduction for the interest.”
- “We have to furnish the house, right? We just can’t leave it empty. Oh, and we need to go to the Caribbean. Oh, and I need a weekly manicure. Credit cards help tide us over until our next paycheck.” (Reality: the credit cards never get fully paid off.)
- “I like to drive new cars. So what if it’s a BMW?”
- “I thought that as long as I got a college degree that things would work out fine no matter how much I borrowed.”
Ugh. What a financial disaster! People are actually rationalizing the debt that’s working to keep them broke.
Better Ways to Deal with the Big Four
Don’t get me wrong. I’m not against spending, but it has to be done in moderation and in proportion to income. For most people this means carrying much lower levels of debt (or even none at all).
Here are some suggestions for dealing with debt in these areas:
- Buy a house you can afford that leaves plenty of cushion in your budget. Then take steps to pay it off in ten years. Even with a tax deduction, it’s expensive.
- When you buy a reasonably priced home, all your associated costs pertaining to it go down. This has such a meaningful financial impact that the price you pay for a home actually determines your net worth. So buy carefully.
- If you must buy new cars, buy for reliability and do your best to get a great price. This can be done by having dealers compete for your business.
- Select a college based on its payout — what it costs versus what you’ll earn with the degree. Help yourself on the cost side by doing all you can to save on college expenses.
And for all of these, an old tried and true money principle works like a charm: save in advance and pay cash for as much as you can.
Wrap Up
Implement these simple tips, even if you hate them, and you’ll save yourself AT LEAST a few hundred thousand dollars.
You can then invest these savings to grow your net worth.
Are we still friends? 😉
This content was originally a series of guest posts I wrote for Equities.com.
planedoc says
Yep. All points are, in fact, correct.
Reference horses…”never own something that eats while you sleep”.
Gt says
I really really LMAO.
“NEVER OWN SOMETHING THAT EATS WHILE YOU SLEEP “
Razorback 14 says
Once again, great and helpful tips ——. Spot on in every way.
Thanks, ESI.
Jay says
Love this post, as always, but re #2 there are so many studies affirming the health-improving aspects of pet ownership I won’t even try to list them, here. So, if my dog costs me $25k over her (all too short) lifetime but extends mine by, say, 5 years, who’s getting the better of that deal?
ESI says
See below…
None of these are about the costs as much as they are about being aware of your spending and doing it on purpose.
David says
I think “Never buy a new car” should be on the list. I know many people who spend $50k on a new SUV every 5 years. There are many excuses for this including “I need something reliable” but my 20 year car with routine preventative maintenance has been very reliable and gets me around just as well as a new car.
ESI says
Maybe I need to write a “part 2” — with new cars and kids listed. 😉
Emily says
I have two dogs and know how expensive they are. Anyone who has gotten a vet bill should know! I think it’s worth it, and I don’t waste my money on much, so pups it is! If you really want to make enemies start talking about how expensive children are… Also not a requisite in life, though most people think it’s worth it.
Emily says
P. S. Please read that in an amused tone, not an angry one, sometimes hard to convey that online. It was a good article! 🙂
Mr. r2e says
It”s all about choices people make. You can choose to accept where you are or choose to make a change. The key is to take personal responsibility for your choices.
Doug says
A really interesting article. Although here in the UK we have a different culture, there are many things which ring true and certainly you have done well to challenge people!
Paul says
Great list, and I think these are hated tips because they put unconscious / autopilot spending in the crosshairs. If you consciously spend in all of these areas, you should be able to justify the expense better than most people can – and that’s why it sometimes hurts to highlight the cost and potential saving of going a different route.
ESI says
I think you hit the nail on the head!
It’s not that spending on these items is “wrong”, the main issue is that people do it without thinking or (worse) try to justify that it’s “not that expensive.”
These are expensive, but can be totally worth the cost — as long as you make that decision consciously.
Justin says
Great article. Enjoyed the provocative thoughts this generates. Really makes you consider every decision as intentional whether we want to admit it or not.
On #4. Wouldn’t the savings be the $70k in interest AND the $75k saved on principle? Of course you save on interest but you also bought a house that was $75k cheaper. One of the best decisions we ever made was getting a house less than half of the amount the mortgage lender approved us for. Should be paid off in less than 6 years!
ESI says
Could be. You could include the principal, but you could also assume you’d get that back when you sell and/or it would add to your net worth, so I’m not sure it’s an expense.
George says
This is a spot on list, and #1 caused a huge argument w/ a friend- I was listening to them complain about their finances and suggested they leave NYC. They were furious with me, and I apologized with the excuse I was trying to help (just their rent alone was nearly 2x my mortgage payment and they made a fraction of what the wife and I were making). We never spoke about it again and of course, not even a year later they left NYC.
That said, I 100% support being young and living in a crazy expensive place. You learn a lot of lessons- how to have fun for free, live frugally, and value friendships. But trying to settle down in a place like that ain’t easy.
And of course where we live (Texas) EVERYONE thinks they need the big house. Even I was guilty of it for a while- thinking my wife and I needed ~1700 sq ft. Then I realized that 1000 sq ft was 50% more than the ~700 sq ft we had in Boston, and that was that.
Life Outside The Maze says
I think your #1 has the most visceral reaction for me. Most people love where they live or are at least creatures of habit and think they do. When I moved away from Minnesota, the Minnesota governor was claiming that no one moves because of taxes. I had literally just calculated how much I could save by moving to a lower tax state (with better weather) and it absolutely factored into my decision to return to Colorado (5% less taxes in highest bracket). Of course now that housing prices have almost doubled here in the last 10 years the equation changes… Thanks for the list ESI
Spaceman Spiff says
I was surprised you didn’t list children. I thought you were going for the jugular?? Maybe we’ve found YOUR spending weakness. 😉
Great article.
ESI says
Haha! That and new cars… 😉
RE@54 says
One thing about the “latte factor”, if you make $40K/year, that $5 coffee will hit you harder than if you make $100K/year. That is one thing people forget, how long do you have to work to pay for that coffee? If you make $11/hour, you have to work about 30 minutes to buy it. If you make $50/hour, you have to work about 6 minutes.
So when I see articles where writers say enjoy the coffee, they are not speaking to the person who only makes $11-20/hour. Unfortunately, they are the ones that read it and go buy it…
Millionaire73 says
Great job with pulling these together and can only imagine how the no Starbucks, small house, no pets, move away from family will play with some readers but they are sport on 🙂 It comes back to one of my favorite article you have written:
https://esimoney.com/if-you-want-what-i-have-you-have-to-do-what-ive-done/
At the core the first million is definitely the hardest and unless you are blessed with an extremely high income you have to make sacrifices if you want to get there. The good news is the next million is easier and you can go back to getting your coffee and a second pet although avoiding debt needs to be a day 1 mindset.
I loved reading the research that there are 3X as many millionaires in 300K homes than 1M as always believed that but never saw that written about.
Millionaire73
https://esimoney.com/millionaire-interview-73/
Tia Lemon says
“At the core the first million is definitely the hardest and unless you are blessed with an extremely high income you have to make sacrifices if you want to get there.”
Nope, nope, nope, nope not true, you can make your first million without an extremely high income and sacrifices. It does take a bit of luck. I did it with a 5 figure income… so you have to define an extremely high income. My keys to millionaire status was 10% (matching 4.5 from employer so not absolute 10%) income to savings for 25 years and a bit o’ luck in real estate.
Now I might have sacrificed my sanity but that is a different blog.
Xrayvsn says
I backed luckily into a positive geoarbitrage situation before I even knew what that term meant. Living in a very low cost of living area with no state income tax easily saves me $70k yr at my salary.
The home I bought is considered a decent size but again because of location was bought at far less than it would cost in higher cost areas.
Lara says
You are correct about #2. It’s turned out to be a lot more expensive than I’ve thought.
I have no regrets though.
I share my dog with my parents as I wanted them to lead a healthier lifestyle. As they’re older, they used to not walk or exercise at all.
We had an agreement that they would walk the dog during the day while I am working so I save from dog walker and they save probably a ton from potential healthcare costs.
My parents have been leading a healthier lifestyle since getting a dog and they are also happier as they have a living being they love that they have to take care of.
Phillip says
The biggest way to save more money is to not have kids or have less kids. I can say it cause I don’t have any friends 🙂
avertie says
I am always amazed by how many people complain that they don’t have enough money, but they have 3 or 4 kids. The amount of children people have should be a financial decision and not an emotional one. Somehow I still have friends even when I point this out to them 🙂
Ray says
As Davos (or Stannis) would say: fewer kids
Deanna says
I agree with all of these suggestions. I live in CLE (fortunately my family is here too) which is low cost, I don’t have any pets, I avoid small expenses and budget for everything, I live in a small apartment, and I avoid debt. While I am renting the small apartment, my plan is to maybe buy a duplex in the next five years and house hack. It definitely will be small though. 😉
You are right that many people will hate these but they really allow a person to make some serious headway.
Best line – “Let go of the dream home mirage and have the Dream Life!”
GT says
Agree with all points.
It kills me when people spend thousands to treat a very sick pet. I know they are like family but the people I see spending thousands on cancer treatment or some type of pet surgery really can’t afford it!
As for larger houses, its true when you live in a big house in a nice neighborhood every single thing costs more. Its lifestyle creep. Better car, better furnishings, better clothes, better vacations.
The only point I have any issue at all is related to living in cheaper cities. I think in general that is true but I also think in the current economy wages have outpaced the cost of living.
https://www.bloomberg.com/news/articles/2019-05-20/send-your-cvs-to-san-francisco-as-zurich-toppled-in-city-survey
I personally struggle with my Starbucks Coffee each day. I know it isn’t worth it but I still do it,
Pete says
“Are we still friends?”
We’re good. 🙂
Loved the article. Dogs are definitely expensive. I figured a grand per year with my dog and, well, he’s averaging 2. Actually worth it to me but yes, a decent chunk of change.
Mr. Hobo Millionaire says
Great post and great list. I would add:
1. Full coverage medical care (nothing to pay for doctor visits, but you’re paying hundreds extra per month for the coverage)
2. Luxury gyms vs non-luxury (Lifetime Fitness vs 24 Hour Fitness vs a $19.99/month gym)
3. Having kids before you’re financially ready or having multiple kids over 10 year period (which limits options over a 30 year period).
4. Expensive perfumes (the stuff that can run $100/month)
5. Expensive college choices; especially recommend the hack of Junior College for first two years then transferring to “name” college (*if* you feel you “must” go to name college)
All of these choices combined add up to a 1M-5M decision over the first 60+ years of one’s life…
ESI says
You’re killing me! LOVE my Lifetime Fitness!!! 😉
Mr. Hobo Millionaire says
Shhhhhh…that’s where I go, too. Haha.
Patsy says
Good list. I could quibble with a couple of these- where one lives is sometimes dictated (at least for part or most of one’s career) by where the job or promotion takes you. I know this firsthand, having lived in the Midwest for a few years while pining for a warmer location!
More to the point, though, I think the choices in neighborhoods where you buy are quite narrow. I don’t live and don’t want to live in or among million-dollar mansions, but the median price (not to mention size) of houses middle-class neighborhoods have vastly increased in the last couple of decades. In the city where I live, my choices appear to be: buy a smaller house in a decrepit neighborhood with undesirable neighbors and schools for $; buy a smaller, usually renovated, house in a nice older neighborhood for $$$; or buy a newer house in a swanky area with good neighbors and schools, also for $$$. There doesn’t seem to be much middle ground with modest homes at affordable prices and decent neighbors anymore. It’s frustrating.
Stephanie says
I understand all the points but some, especially point 1, comes from a place of privilege. The idea that someone can just up and move assumed that they actually can. Moving has many costs, and would also require finding a new job, a new place to live, etc. Finding first/last/security deposit money if you’re already struggling isn’t easy. And if you rely on services or medical care in your current location, you may be out of luck in the new location. Folks with limited mobility benefit from public transit, which is more accessible and reliable in HCOL areas. Better medical care and services also tend to be in big cities.
Sure, if you’re healthy, have lots of job prospects, and already have some savings, this advice makes a lot more sense over the long run. But if it’s already difficult to make ends meet, it’s going to be difficult to get over all the hurdles involved in moving.
Mr. Hobo Millionaire says
Stephanie, it should be noted that many, if not all, of these recommendations are steps to take BEFORE you get into trouble. There are MANY decisions in life where people make choices that sabotage them before they barely even get started. I would not call it a “place of privilege”; I would call it a “place of better choices over bad choices”.
Justin G. says
I agree with all of your points. Some may be harder than others to implement but to me, there’s no disputing the financial drain going contrary to your advice. One of my side gigs is property management and we see people, all the time, with marginal finances trying to rent properties with dogs…sometimes, multiple dogs! I see the credit reports and it’s astonishing that some people live on the edge, yet insist on maintaining a dog(s) and other pets. I see the crazy debt in these credit reports, too. Recreational vehicle debt, motorcycle, personal loans, credit cards, student loan…we understand and work with medical debt as we see it often. We can over look that since the fairness of our medical system, to me, is indisputable.
Another thing I notice is tattoos. To me, it’s a total waste of money. I often see people, again, with marginal finances, with multiple tattoos. Those aren’t usually free!
I love the take on small expenses. I’m a big fan of eating lunch at home! Or, if you work somewhere, eating lunch with food from home. A daily lunch tab clearly adds up. I do love treating myself to coffee, but I don’t do it everyday…maybe 3-4 times per week. But…we rarely eat out, if not traveling. It’s OK to have some small expenses, but don’t do it everyday!
Anyway, I love this article. It’s controversial, yes. But many of us need to have our ideas confronted so that we can examine where we are and if there’s a different road to take to where we want to go. I love it. Thank you.
Ryan @ Free Before Friday says
Sadly I want to move to a higher cost of living area for the weather. Invaluable to me.. but at least I don’t have pets :).
Childless and Happy says
You forgot the most obvious savings tip of all: DON”T HAVE CHILDREN YOU CAN’T AFFORD. No offense, but I will take my pet (despite the added pet sitting, vet and associated accessories) any day.
Which leads me to the second most obvious savings tip of all: Effective birth control.
Just sayin’ people!