Guide to Cheap Living – 10 Rules to Live by

Cheap living can be accomplished very easily, but it requires you to make adjustments to how you spend. Breaking bad spending habits takes a conscious effort and self discipline. I can’t give you the discipline, but I can provide these ten principles as a guide to cheap living.

1. Interest sucks (unless you’re earning it) – If you are currently in debt and paying interest, you are throwing money away. Focus on getting out of debt and then only buy things you can afford.

2. Don’t discount discounts – Sometimes we just don’t pay enough attention to discounts, sales, specials, rebates, and coupons. All of these may be marketing gimmicks, but if you’re savvy and disciplined, you’ll save bundles of cash. Just remember not to buy things you don’t need just because it’s a good price (unless you know you can profit from it).

3. Arm yourself (no, don’t shoot the bill collector) – In this case, your weapon will be information. Before you spend money, you need to know the value of what you are buying. Sometimes sales and discounts are bogus. Knowledge is one of the keys to cheap living.

4. Record it (I’m not talking songs here) – Keep track of your spending. Knowing what you spend and where your money goes will really help you see areas to improve.

5. Generic is king (or queen) – Many name brand items are overrated. Arm yourself and buy quality substitutes.

6. Be conservative (and I’m not recruiting Republicans here) – Conserve energy and save money. There’s nothing like living cheap and green at the same time.

7. Waste not, want not – Avoid wasting anything. Don’t use more than is necessary to do the job, such as tooth paste, detergent, etc. Never throw something away that is feasible to repair. Use products up completely. For example, when your shampoo is empty, add water to the bottle and you’ll get a couple of more uses from it.

8. Used, but not abused – Quality used items can save you a great deal of money. Another key to cheap living is recognizing quality, especially when buying something that is used. A good example of a used item that will save you a lot is an automobile. A brand new basic Toyota Camry will cost you 19K before taxes and fees. The Bluebook value of a 2006 Camry in excellent condition is only 10K, for a savings of $9000. Chances are, the 3 year old Camry will do the job and last you quite a long time.

9. Location, location, location – This rule is a difficult one, because your location isn’t always easy to change. Consider cost of living versus income and you may decide a move is a good idea. People on a pension can live much better in Texas than in California. My money goes farther when I live in the Philippines than it does in the US. But, you don’t even have to make such a drastic move. Even in your local area, the property taxes and housing costs may be cheaper in another county or town. I know of a case where two friends lived less than a mile apart and one guy paid twice the property taxes of the other guy for a house of the same value. The reason for the difference had to do with city limits. So, arm yourself with information before you decide where to live.

10. Timing is crucial – The timing of a purchase can make a huge difference in the price you pay. Never buy the latest gadget when it is first introduced. Also, buy things out-of-season and you can save quite a bit, because in many cases the stores reduce prices to make room for another season’s inventory. Buy fans and BBQ grills at the end of summer, Christmas decorations in January, and travel during off season. I’m sure you can think of a ton of ways to use this principle.

Some of these principles to cheap living have been mentioned before, but I thought having them listed all together might be helpful. Feel free to share your thoughts. Live cheap and prosper.

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One Response to “Guide to Cheap Living – 10 Rules to Live by”

  1. I must say this is a great article i enjoyed reading it keep the good work :)