Do you know anyone that got a pretty decent promotion and almost immediately increased their standard of living? They most likely went out and bought themselves a fancy new car (to fit the role of their fancy new job) and maybe even moved into a larger executive home as well. Instead of shopping at a discount grocery store, they begin to buy their food at the more upscale store down the street. Everything just seems to become bigger and better, so what do you think happens to their overall cash flow? Most of the time their cash flow (the money that they have left after the bills are paid) goes unchanged or even goes down a little! If you want to stay rich, you need to think cheaper.
Think Cheap, Yet Effective
When I was 20 years old, my goal was to increase my discretionary income to $500 a month so that I could lease a brand new Mercedes. Thankfully, I wasn’t able to meet that goal before my mind developed and I realized that that would be really stupid. Driving a Mercedes can feel pretty cool, especially when everyone at work is drooling over your ride. However, is a Mercedes really necessary when all you’re doing is driving to and from work each day? Of course not. And actually, now that I think about it, a Mercedes is really never necessary!
The best car I ever owned (and actually still drive) was also the cheapest car I ever bought. I have owned my 2001 Honda Civic LX for almost 2 years and the only problem I had with it was the water pump, which cost me $360 (which included the timing belt that I replaced at the same time). I have heard that if you keep your repair expenses to less than $1,500 per year then you are doing good, so I feel like I am doing awesome! If I owned a Mercedes and had trouble with the car, it would probably cost at minimum $500 for even a minor repair! By thinking cheap, I have purchased a very affordable car (it was $2,500 by the way) that is so common that there is absolutely nothing more inexpensive to fix!
Think Cheap About Everything
This year, I have been super frugal since I have the audacious goal to pay off my entire mortgage by the end of the year. To reduce my living expenses, I have cancelled my escrow, switch auto and home insurance companies, negotiated my phone plan to a lower rate, and most recently have cancelled my lawn service.
Back in 2012, I really didn’t have the motivation to mow my own yard. I had just purchased my house and had many repairs to make inside, so mowing the lawn was nowhere near the top of the to-do list. Also, I felt like it would cost me a large amount to start mowing the yard myself. I would have had to first purchase a brand new mower and then I would have had to build a shed to house it (since I only have a one-stall garage that I park my car in). This would have cost me nearly $1,000 just to get started!
This year, I rethought this scenario like a frugal wealthy person instead of a stuck-up wanna-be rich dude. All along, I thought that I would have to buy a push mower at the very least, which would not have fit in my garage. However, when I got into the right mindset of “how can I get rid of this $300/yr lawn service, but keep my own lawn mowing costs down?”
When I changed my mindset, I found my answer. A reel push mower. You know, the old school kind that don’t have a motor. My yard is small so it wouldn’t be that big of a deal. Plus, it makes for a nice quiet mow and will easily hang on the wall in my garage! After searching on Craigslist this winter, I found a nearly-new reel mower for just $30! By thinking cheaper and trying to retain my wealth, I was able to reduce my lawn service bill by $270 in one year alone. Over the course of 10 years, this will be a $3,000 savings!
Are you in the right mindset to think cheaper and reduce your living expenses?