I started reading up on a financial guru named Dave Ramsey two years ago, and have been very inspired by his financial teachings. I learned from Dave Ramsey that in order for us to save more money and obtain better cashflow, we should cut back on spending, use only cash, and look for ways to increase income.
1. Cash only
I completely stopped using credit cards since 2014. I cut up one card into 2 pieces and store it into a drawer, and closed down the other card. I read that if we don't use a credit card, it doesn't help our credit rating - so you could put something on your credit card each month, such as a cell phone bill and pay it off every month to keep your credit card history active. I pay for everything only by debit and cash everywhere I go. I pay all my online purchases via Paypal linked to my bank account, so it is taken directly out of my chequing account. If I can't afford something with the cash I have on hand, I don't buy it, plain and simple. I will save up the cash until I am able to afford it. For example, I had been thinking of purchasing a second car. I can easily afford a new Mini right now with a financialloan or a credit card. But instead, I'm slowly saving up for the future to put down $10,000 - $15,000 in full to buy a used Mini. Other items I would love is a new GoPro and a new laptop. But if I don't have the cash easily on hand, then I won't buy them until I do. I also purchase 80% of my items from Korean and Chinese sellers on eBay, so my clothes cost $5 - $30 per piece and their items look very stylish. If I were to buy similar items in Canada, they would be at least 3 - 10 times higher the cost.
2. Increase your income
According to Dave Ramsey, another method to improve your finances is to increase your income. I used to work in retail, but I quickly realized that I did not like the bad hours and low wages. I also had my fair share of unprofessional supervisors and uneducated co-workers (which can be a more common situation at the retail level), so it was not an industry I felt comfortable in. I wanted to make the jump into a corporate office with a higher salary to improve my lifestyle. I took out a student loan to study a Business degree at a local university. During graduation, I started working in private firms and climbed up to Senior management and Director roles in a very short time. However, the workload was very stressful and I felt that the pay was not worth the high workload demanded. I did not have a work-life balance, my life was all work-work-work. Then ironically, I ended up in a tight financial situation because I fell ill from the workload, but still had high student loans and bills to pay back. To make things worse, I ended up getting chronic health disorders and it was no longer feasible for me to work full-time in management roles. I decided that in order to sustain the same lifestyle but cut back on workload, I would have to make another change and get into the government or union. Now, I am making a comfortable part-time salary by working in government and union roles. Government and union work pay much higher wages and demand way less work than private firms. If I were to compare my current Union role to a similar role in a private firm, I am making double the salary for half the work.
3. Generate passive income
A good way to earn easy money is through passive income. I placed tenants in a property we own in another city, so that the rent they pay covers our mortgage. Our future plan is to pick up another property, rent part of it out, and start up a beauty or baking business in one of the rooms.... when we can afford it one day. I also created this blog to see how much I could start earning passively from it. Think up a way to generate passive income, such as making Youtube videos, blogging, writing an e-book, investing in stocks etc.
4. Ask yourself: Is it a need or a want?
My high school biology teacher once said, "When in doubt, opt for out." She taught us that if we saw something at $100 or more, to think overnight on it before purchasing it. "When you wake up the next day, ask yourself if you still want it. This is so you avoid impulse buying." I am even more frugal. If I see something at $50 or more, I wait until the next day to see if I still want it. Most of the time, I wake up not wanting it, so I end up spending less!
5. Spend less on luxury brands
I rarely buy designer items. I only have a signature few at home as gifts from my husband or family (Tiffany & Co, Louis Vuitton, Dior, Gucci etc). I don't go out of my way to seek out a luxury item. Material items are not important to me since I don't really care for brand names. I'd rather have my husband take me out to eat, or do some traveling for birthdays and wedding anniversaries. I value experiences much more than physical objects. If I really like something I see at a luxury store, I will try to find something similar at a lower price. For example, I really love Tiffany & Co. rings. But I selected a ring from Blue Nile at a much more affordable price, since they both use the same diamond supplier.
6. Use coupons
I often use online discounts such as Groupon or Social Shopper for activities including spas, travel, and dining out. I save a lot using those websites, anywhere from 40% - 70% off.
7. Budget your travel
I prefer to stay in 3.5 - 5 star hotels for comfort and safety reasons, but at the 4 star level or higher, they get expensive. So I search for discounts on hotels and flights by using travel sites such as Booking.com, and go during low season when everything is half price. For more budgeting tips, I wrote a post here on how you can save more.
8. Sell your old stuff
For some of my old items, I sell them on Craigslist to get some cash back. Sometimes I am able to sell them at the same price and even higher if they hold a lot of value.
9. Enter contests
I also enter a lot of local and international contests - there was a year when I won about $700 worth of stuff. Some of them I kept, and other ones I sold for a profit if I didn't like them too much. I have a separate 'junk' email account for signing up to contests, since it generates a lot of spam. I check it periodically to see if I won anything. I also don't give out my main phone line to contests because I think they sell our phone numbers to third parties. I downloaded a free phone line (Fongo FreePhoneLine) onto my computer and I use that phone number when I fill out contest forms. I never turn on that phone line, I just check it once a week to see if it gets any voicemails.
By bonjour amour
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