Thomas: Sarah, what are you good at?
Sarah: I am good at saving money while promoting a happy family lifestyle.
Thomas: Splendid. Tell me more about that.
Sarah: Your lifestyle is basically the way you spend your money; it’s all in your expenses.
How can you decrease your expenses?
There are only two basic ways.
The first is to simplify or downgrade your lifestyle – in other words, consume less. Almost everyone finds this method very painful. It usually takes some strong outside force to make someone consume less. This force can be in the form of financial restriction, or powerfully influential ideas that change the person’s beliefs and perceptions. It’s either take away the person’s freedom or change their mind. Hard things to do, in reality.
The second way to reduce your expenses is to make better deals. Buy the same quantity of goods for less money. This can be done by following one or more of the following strategies:
- Wait for prices to go down. Postpone purchase of the gadget you like for half a year, and you may find it for half the price. Purchase seasonal items out of their season, etc. I have to tell you, though – prices for some goods do increase over time (as we already talked about) so if you’re applying the waiting strategy, you have to be smart about your price expectations.
- Bargain. Bargaining is all about having good market information and being cheeky. Utilize technologies to find lower prices, try to get volume discounts by managing purchases and consumption, and know your sellers’ margins so you can negotiate a reasonable markup.
- Trade your time and efforts for goods. If you have spare time you could use it more efficiently, you can trade it. Many companies are trying to increase client engagement by giving products away in exchange for answers to surveys and other easy activities. By doing what such sellers ask, you can receive discounts or free products.
Thomas: There is a third way to reduce expenses; to me, it’s the most important one. It is called efficiency. For example, you can buy products which consume less energy – less of your own energy, or less electricity or gas so you spend less on those things, etc. Or you could save on internet expenses by sharing your access with others and sharing the cost. Also, by keeping your expenses below your income, you can invest the surplus in proper assets and ultimately increase your material WEALTH.
Some questions for you:
Can you think of other ways to save by getting better deals?
Can you think of other ways to save by using resources more efficiently?