Editor’s note: This article was first published in October 2014. The phone models and prices (Sony Xperia Z1/Z2/Z3, Samsung Galaxy, iPhone 6) and the savings figures (400-500 euros a year, 40 euros a month on bundled services) are from 2014; “wait for the iPhone 11” was a joke about a then-future model.
There are two ways to have more money: save more or earn more. The second is preferable, because the first (saving alone) helps in the short term, but in the long run we would end up in the same situation. Still, for emergencies or for getting your finances back in shape, let’s look at how we can have more money at the end of the month, and at the end of the year. In the end, it is a matter of mindset.
We have already shared 29 ideas for making extra money from home over the internet.
1. Financial procrastination pays
Procrastination is the key to failure in your career and in business, but when it comes to spending money, procrastination is excellent. In other words, put off your purchases.
First, whenever you are planning a purchase that is not urgent, postpone it by default. For financial procrastination to work, you need to keep in mind a very basic principle of finance: “Expensive things are only for fools.”
Today you want a Sony Xperia Z3 or the latest iPhone. A few months ago, I imagine, you wanted the Sony Xperia Z1. Well, maybe now is the time to buy the Xperia Z1.
It is a way of satisfying your original desire, just later. And with a bit of luck, you will realise you are falling for consumerism and come to your senses.
An example: I recently bundled my landline, mobile, TV and ADSL broadband with the same company. They were giving me a Samsung Galaxy, but I wanted a Sony Xperia Z2 for its 20-megapixel camera and high-definition video. So I told myself I would take the Galaxy and buy the Xperia myself.
Weeks later I asked myself: what can I do with the Xperia in my daily life that I can’t do with the Galaxy? The Sony Xperia shoots magnificent video and incredible photos. Then came the big question: “And what on earth do I need incredible photos and videos for, when I hardly ever take any?” The Galaxy will do.
The result: I will finish the year €400 or €500 better off. With poor-quality photos, admittedly, but I can live with that. So, do you want to buy the iPhone 6? Wait until the iPhone 11 comes out and buy the 6 for less.
You can also download this Excel template for your personal finances completely free.
2. Bundle your services
This is a good time to pay less by combining landline, internet, mobile and TV. Every company has its own offer, and with most of them it will cost you less than having your mobile with one company and your internet with another.
As long as you always look for a balance between price and quality, you will save money. In my case I have managed to save €40 a month. Then again, I think I was the Spaniard who paid the most for internet and mobile.
That is another €480 a year saved, on top of the €400 for the Xperia I don’t have…
3. Build bargaining power when paying for services
We have discussed this more than once: a family that decides to take out all its car and home insurance with the same company can always negotiate with that company in a way an individual customer cannot. The same applies to phone companies and other kinds of businesses.
4. Even simpler: save before you spend
Some time ago we talked about several biases that interfere with your personal finances, and explained how to counter the “anti-saving” one. When you are thinking of buying a €1,000 television, imagine someone standing in front of you who makes you choose one of their hands: in one hand there is a television, in the other €1,000. Which gift would you choose? If you hesitate, it is because you don’t need a €1,000 television.
The same goes for buying a mid-range or upmarket car in a country like Spain, where you cannot drive faster than 120 km/h. Want to show off your car? Fine. But appearances cost money you sometimes cannot afford, even if you can afford the payments.
5. Pay in cash
How many times have you gone into a store to buy a certain amount, felt like buying something else and not held back, because you knew you could pay by card whatever the total?
Many studies have shown that people who pay in cash save far more than those who have grown used to cards. First, parting with physical money hurts more than parting with a digital number.
Second, if you go shopping with €200 in cash, you know €200 is what you can spend. That way you also avoid falling into the traps of big stores and supermarkets. (Read: 11 tricks stores use to make you spend more money.)
And now for something more extreme when it comes to saving.
6. Small daily expenses add up to large sums over a year
We once listed the 10 most stupid things a person can spend money on. Skipping an afternoon coffee might save you €30 a month, but if it is one of your small pleasures, don’t give it up: it has social benefits too.
The other day I was talking to someone who was going through a phase of extreme saving and looking for ways to do without everyday products that are not cheap and that we can make ourselves. The benefit is not only financial but also for your health. Here are some of the products this person had managed to do without:
7. You don’t need to buy soap
With a litre of milk, oil, caustic soda and aloe vera you can make hand and shower soap that lasts for years. You can even sell what you don’t use and earn some extra money, he told me; he got the recipe from his grandmother. And this 100% natural soap has properties for the skin that you won’t find in any product on supermarket shelves.
8. You don’t need shaving foam
Families with several men in the house may take it for granted that shaving foam is a necessity. Soap does the same job as shaving foam, it is cheaper, and if it is the homemade kind mentioned above, it will also look after your skin.
See also: Financial education for our children: the sooner the better (and yes, money matters)
9. You don’t need razor blades
Razor blades are advertised these days the way cars are. This is one of the most profitable industries, because every man has accepted that he needs razors or blades (disposable or not).
According to this person, years ago he went back to the oldest method: the old straight razor, which can last for decades and which you can sharpen yourself. Of course, this is for savers who are experts at handling a blade. I can’t see myself shaving with one of those; I might think of some politician and give myself a very nasty cut.
10. You don’t need toilet paper
This is a very extreme measure, but this man assured me that at home they keep toilet paper for guests, while they themselves use that fixture called a bidet, which usually sits next to the toilet and nobody uses, with small cloth rags instead of toilet paper.
The rag then goes into a bucket of water with detergent, and at the end of the week into the washing machine. Too extreme? Maybe, but when the goal is to pinch money from here and there, everything adds up.
And I suppose there are dozens of everyday products we could do without with a little creativity.
Finally, some time ago we published an article with some ideas for making money by saving, where, among other things, we talked about installing low-flow taps, changing the light bulbs at home, avoiding “vampire power” consumption, not using an electric water heater or a ceramic hob, and making smart use of discount coupons.
Further reading
- Recommended: 34 money lessons young people and adults should learn
- 5 signs you are living beyond your means
Featured image: Bernard Gagnon, CC BY-SA 3.0, via Wikimedia Commons.
