20 Money Hacks: Tips and Tricks to Improve Your Finances
“Money is better than poverty, if only for financial reasons.” - Woody Allen We had the Parent Hacks earlier this week, and I was thinking it would be fun to do the...
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“Money is better than poverty, if only for financial reasons.” - Woody Allen
We had the Parent Hacks earlier this week, and I was thinking it would be fun to do the same
with finances — ways to trick yourself, to get around obstacles, to
boost your accounts, without it hurting.
Photo courtesy of elle_rigby
Improving your finances improves your happiness, in general, so I
thought it would be important to share stuff that’s worked for me.
I’m in the best financial shape in my life, despite quitting my job and my wife recently quitting hers too. A lot of that is thanks to you
guys, the readers, but it’s also thanks to frugality, to eliminating
debt, to saving as much as I can. To these hacks.
Here’s what works for me — please avoid flaming me, as I’m not
saying they’ll work for everybody. Share your tips and tricks in the
- Use cash. Instead of charging things to credit
cards or debit cards, use cash for non-bill spending such as eating
out, gas, groceries. Spending cash makes the spending more real, and
there’s an added advantage of knowing when you’re out of cash, instead
of spending more than you
- Small weekly savings transfers. I got this idea from my friend Trent at The Simple Dollar,
who automatically deducts $20 a week from his check to savings. I
decided that I could live with $40/week without really feeling it —
it’s a relatively small transfer that I barely notice, and I save about
$2,000 a year on top of my larger bi-weekly savings transfers.
- Stay home. Going out makes you more likely to
spend unnecessarily. You eat at restaurants, go to the mall, stop at
the gas station for snacks. It’s hard to avoid spending when you’re on
the road. Instead, stay home, and find free entertainment. It’s also a
great way to bond with your family.
- Don’t get catalogs. Or emailed announcements from
companies trying to sell you stuff. Their announcements of sales or
cool new products make it very tempting to buy something you don’t
need. Instead, stop the catalogs and emails from ever getting to you in
the first place, and you’ll spend less.
- Keep a 30-day list. If you have an impulse to buy
something you don’t absolutely need, put it on a 30-day list. You can’t
buy anything but necessities — everything else goes on the list, with
the date that it’s added to the list. When the 30 days are up, you can
buy it — but most likely, the strong urge to buy it will be gone, and
you can evaluate it more calmly.
- Cook at home. I know, it seems more difficult than
eating out. But it doesn’t have to be hard. Throw together a quick
stir-fry with frozen veggies and either boneless chicken or (my
favorite) tofu with soy sauce or tamari. Make home-made pizza with a
ready-made crust, some sauce, cheese and veggies. Put some spices on
something and throw it in the oven while you cook some brown rice. Not
only is this much cheaper than eating out, but it’s healthier.
- Exercise. Staying healthy is the best way to avoid costly medical bills later.
- Use the envelope system. It’s the same idea as
using cash for spending, but in addition you use envelopes to split
your spending cash into categories. My non-bills categories are
groceries, gas and miscellaneous spending. Three envelopes, and when
they’re empty, I’ve spent my allotment.
- Talk with your SO weekly. It’s important that you
and your significant other be on the same page. You should have the
same financial goals, and from there you should agree on a general
spending plan and a policy for impulse buying that won’t have either of
you wanting to choke the other. Make sure you both know what bills have
been paid, what your balances are, etc. A weekly meeting of just 20
minutes accomplishes that. Communication is key.
- The spreadsheet tracker hack. There are expensive
programs like MS Money, Quicken, and the like that will do amazing
things with your financial information. There are even free ones, on
your desktop or online, that can do all kinds of things. Trouble is, I
don’t need all that. All I want is a way to track my money easily, with
no other bells and whistles, and a way to access that online so that I
can view it from anywhere. The best way I found to do that is through
Google Docs and Spreadsheets. I created a simple spreadsheet to track
my bank accounts, that does everything I used to do with MS Money. It
has the date of each transaction, the title and amount, a little field
for memos, and a running balance. What more do I need? Keep it simple. Update: View a sample I put online here.
- Pay savings and debt first. When you sit down to
pay your bills (I do them all online), make the first bills you pay be
your savings transfer and your debt payments. If not, if you pay them
last … you’ll often end up shortchanging them. But if you pay them
first, you’ll make sure you still pay your rent or mortgage, utilities,
groceries and gas … so you’ll just cut back on other spending.
- Exercise at home. Some of you will disagree with
me on this, which is OK — everyone should do what works for them. But
I’ve saved a lot of money that I used to spend on gyms by just running
at the local track or on the roads in my neighborhood, and buying some
simple weights and a chin-up bar. I do a lot of body-weight exercises
(pushups, Hindu squats, lunges, pullups, dips, etc.) and I don’t need a
gym for those things.
- Cut out cable TV. I’m not saying I don’t watch TV
— I watch DVDs, so that I’m sure that what I’m watching is something
great, rather than the useless stuff you find on TV most of the time.
And there’s a lot of it online for free if you look. Not a huge
savings, but it adds up.
- Declutter. By getting rid of all the excess stuff
in your home, you not only make your life much simpler and more
peaceful, but you make it harder to buy stuff that will just clutter
things up again. Once you’ve simplified your home, you won’t want to go
- Lend and borrow. Give books and clothes and toys
you don’t need anymore to your friends and family. If you need
something, send out an email asking if anyone has it. Chances are,
they’ll give it to you for free if they don’t use it anymore.
- Barter. It’s a lost art, but lots of people will
take your services or goods instead of money, especially if you’re
friends or at least know each other. Get into the habit of offering to
barter, and you’ll find yourself saving a lot of money. My website
design was done through the barter system, so I saved well over $1,000
there, for example.
- Use online savings. I use Emigrant Direct, but ING Direct is also popular, as are a bunch of other online banks. Not only do you
earn like twice the interest of a normal bank savings account, but if
you don’t get the ATM account it’s not as easy to withdraw money …
making it less likely that you’ll get money out on an impulse.
- Try frugal gift-giving.
Giving people gifts is one of the most wonderful traditions, as it
shows generosity and caring. Until it becomes commercialized. Then it’s
just really really expensive. Instead, try giving the gift of spending
time with someone. Try giving them something you baked or made
yourself. Try giving them services they’d appreciate. It doesn’t have
to cost a lot to be generous.
- Teach your kids about advertising, saving, earning, and gift-giving.
If you have kids, educating them about money will save you a lot of
money in the long run. If they know about how advertising influences
them in tricky ways, they’ll be less likely to demand (OK, beg and
plead for) the latest fad toys. If they know about saving and earning
money, they’ll respect the money that you earn, and that you are trying
to save. If they know that gift-giving doesn’t have to be about
spending a lot of money (see above), they won’t necessarily want
- Find happiness in life, not spending. Many times
people buy stuff because they think (subconsciously perhaps) that it
will bring them happiness. They just HAVE to have the latest gadget or
shoes or cars. It’s so fun! And yet, you buy that stuff, and you’re
only happy for a day or two at most. Then you just need to buy more.
It’s a never-ending cycle. Instead, learn to love life. Find joy in
nature! In the people around you! In doing something you love! In
exercise and meditation! There’s so much in life to make us happy,
there’s no need to find it in spending.
“I’d like to live as a poor man with lots of money.” - Pablo Picasso
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