We’ve all heard the expression “live within your means” or “spend less, save and invest the rest”. These simple yet, challenging guidelines have laid the foundation of our financial plan to achieve Financial Independence. While all of these sound great, increasing the gap between your income and expenses requires discipline, dedication, and teamwork. But where do you begin? … income, expenses, both?

For us, the answer is simple … BOTH; however, we’re big proponents of focusing on your expenses first so you can understand your spending habits. Once you identify and take action on the big-ticket items, you should start seeing substantial savings that will encourage you to search for additional optimization opportunities.

Having said that, let me share 12 money-saving tips that helped us lower our expenses and make extra income.

1. Bring Lunch To Work

Thanks to my awesome and beautiful wife, I bring lunch to work 4-5 days a week. In the downtown Denver area, the average cost for lunch in 2017 is around $13 (including a drink). Taxes would bring this number up to $14.07 and with a 20% tip to a total of $16.89.

This number may not seem significant to you but for me is quite a lot. In 2017, there are a total of 250 working days so assuming you get a month off (20 working days) that leaves 220 working days that if multiplied by $16.89 yields $3,716. If you don’t care about this kind of money what the hell are you doing reading a personal finance blog … sarcastic joke sorry 🙂

2. Enjoy Free Coffee At The Office

Sometimes we tend to take for granted some of the perks we get at work. In my case, we have self-serving coffee and hot tea on every floor in our building. Both are actually pretty well-known brands that taste remarkably good. In spite of that, I see my fellow co-workers going downstairs and walking down the street to Starbucks or Dazbog coffee.

Don’t get me wrong, I don’t think there’s anything wrong with that but the numbers add up. Assuming a regular cup of coffee at ~$3.5-$4.00, you’ll spend $22.73-$25.98/week or $1,000.24-$1,143.12/year (including taxes at 8.25% and a 20% tip).

3. Wash Your Cars At Home

A drive-thru car wash usually found at a gas station charges ~$10.00 just for cleaning the outside of your vehicle. If you go to one of these fancy places that are staffed with folks then the number gets higher. I’ve never used the latter but gave up on the drive-thru. The reason was simple, I was never happy with the results.

This led to my decision to take action on my own. Today, I do full service to both our vehicles and the cost is mainly my time and water. I know it’s not a lot of money but assuming I wash our cars once per month (which I normally do) we have savings in the order of $120/year (not including water costs). The most important thing is that I get to work out and enjoy the product of my hard labor.

4. Minimize Use Of House Cleaning Services

In Colorado, house cleaning services normally range between $25-35/hour. Assuming you have a decent-sized house and kids that can turn the place upside down then you might be looking at ~4 hours or $100-$140/visit. If you set up a weekly appointment you’ll be spending $400-$560/month or $4,800-$6,720 per year!. Forget it, that’s just way too much money. I’ll be honest with you, we have a lady that gives us a hand every now and then (started when my wife got pregnant) but it’s usually $100 every couple of months.

5. Learn Handyman Work

By no means I consider myself a handyman; however, I refuse to pay for things I have little risk of messing up. I tend to pick my battles based on the cost of labor being too high and also making sure I don’t have to spend money on specialized tools.

In some cases where I haven’t had the right tools for the job, I’ve borrowed them from friends without any issues. For the most part my projects have been simple: painting (~$1,000), installing wall speakers (7@ $$75 each), tv wall mounts (3@ $100 each), closet ($1,500), exterior x-mas lighting ($250) custom shelves (2@ $750 each) and custom fireplace mantle ($350). All these projects would have cost me ~$5,425!. The only thing I can say is … get a power drill and watch youtube!

6. Cut Cable

I recently posted an article about 5 decisions that led to $3,500+ in annual savings. One of those decisions was to get rid of cable. Initially, my wife was uncomfortable with the idea but after more than 6 months I can tell you that we are still alive and love being able to save ~ $80/month or $960/year.

7. Increase Insurance Deductible

This might be tricky for some people as it enters the arena of risk management and having peace of mind. On my post about 5 decisions that led to $3,500+ in annual savings I also discuss how we increased our deductible on cars and primary residence to save $446/year.

8. Sell Unused Stuff

Who hasn’t sold something on Craigslist? … we have; however, have you heard about Letgo or OfferUp? well, these are two great websites that make buying and selling way easier than Craigslist. Take a picture, add a few words, pick your $$, and post it. The service is free (unless you want your products to show at the top), you can see reviews from buyers and sellers and chat to agree on the transaction. We haven’t had any issues in terms of scams and always meet at a public place. I’ve been using OfferUp since 2015 and so far we’ve made $2,144.

9. Fill Out Surveys

I’m not a big fan of spending my time answering surveys and watching videos on platforms like Swagbucks or InboxDollars; however, every now and then I’ll get an email from my internet and/or cell phone provider to answer quick surveys that reward us with a $25 gift card. There are many websites that pay you for completing tasks so as long as you think your time is worth the effort, feel free to go for it. In our particular case, we choose our battles and go for easy wins.

10. Avoid “On Sale” Signs

We try not to fall under the temptation of buying items that are “on-sale”. I think it’s great to take advantage of deals (especially if included on your list of needs) but just because you see that sign it doesn’t mean you have to get it. If you believe you’re beating down the house then let me remind you the house always wins. What we normally do is identify things we need and try to stick to our game plan when going to a particular store. This requires teamwork and focus so you can get in and get out :).

11. Negotiate

The other day we were at at-home (the store) because we needed to get an umbrella for our patio. We noticed there was a sign that said 50% off. You’re probably thinking … dude, you just mentioned one should avoid “on-sale” signs … and that is correct; however, in this case, we went to the store looking for that specific item that happened to be on sale.

As you may imagine we were thrilled to see we would be getting what we needed at a discount. To our surprise when we got to the cashier the lady said the discount was on very specific umbrellas (the ugly ones of course). At this point we had two options, buy at full price or leave.

We had done our research and knew we weren’t going to get it at a lower price anywhere else. Instead of taking off, we asked the lady if there was something she could do for us. To our surprise, she offered 10% off. Of course, this brought a smile to our faces.

The moral of the story boils down to a very well known saying … If you don’t ask you don’t get. 

12. Avoid Credit Card Fees

This tip might not lower your expenses or increase your income but could bring back money to your pocket. We pay almost everything with our credit card and use automation to pay them in full at the end of the month to avoid interest and fees. In some cases, there have been situations where we’ve made mistakes that triggered bank fees (even with overdraft protection which I totally recommend activating). As a result, the bank has usually charged a $25 fee.

Pay attention to what I’m about to say. Your brick and mortar bank that usually pays 0.01% APY will charge you $25 in one shot. Does that seem right to you? If you think about it how much money do you need to have in that account to make $25/year? the answer is simple, $250,000. Having that kind of money is a big accomplishment so if you do, then good for you. Hopefully, you don’t have it in a bank that pays 0.01% APY.

Anyways, the point is that it’s not fair to charge someone $25 especially when you have an excellent track record with the bank. This has happened to me a couple of times but I react fairly quickly calling the bank to get the fees reversed. So far, I’ve been successful but the trick is staying on top of it and calling them right away.

Final Thoughts

• There are opportunities for cost reduction all around us.
• Don’t become attached to material things especially if you have no use for them.
• Some of these suggestions might make some people uncomfortable. Take one step at a time and allow yourself to adapt.
• These tips work for us and allow increasing the gap between our income and expenses; however, you need to have a strategy to efficiently save and invest that difference otherwise as soon as you see the extra $$$ you’ll blow it.
• We did not include increasing your income via dividend-paying stocks or real estate investing. Our purpose was to keep these tips as simple as possible without entering the arena of investing.

I know there’s a lot of awesome tips out there so what do you do for increasing the gap between your income and your expenses?

Until next time … JJ