Million Dollar Portfolio
Real Strategies for Making Money Online

I’m a big fan of finding sensible ways to spend less but a recent tweet directed at Ramit Sethi from iwillteachyoutoberich.com got me thinking how much I hate “saving” money. I’m not talking about clipping coupons or buying things on sale you normally buy. I’m talking about all these tiny little everyday things you can change to “Save you hundreds if not thousands” per year.

Here’s the illustration I saw on Twitter today that inspired this post: http://quicken.intuit.com/personal-finance-tips/budgeting-basics/Budgeting-How-Small-Cutbacks-Lead-to-Great-Savings.html

While there are a few sensible tips that may cut down on your electricity bill or your water bill, most of these are the little things in our day that make the day bearable.

Sure, I don’t eat breakfast out every morning (I work from home so there’s that) and I don’t eat dinner out more than twice a week and when I do, it’s going to be something I enjoy and I don’t stress about it.

I also think most people already use energy saving lightbulbs. I’ve had the same bulb in my kitchen for like 2 years now; you know it’s one of those twisty incandescent deals.

There are two things in this illustration that anger me though.

First, the idea of cutting out all soda. I would advise switching to sugar-free soda if you drink the regular stuff because that will save your waistline more than anything but frequently we get 5 cases of what we drink for the price of 2 when they go on sale, so we just stock up and that lasts a while.

Could I “save” the $5 bucks i would spend on a case of soda? Sure, I could but would I really? At the end of the day would I sit down and figure out how much soda I should normally be drinking and then transfer that “saved” amount to my bank account? Not likely. We don’t think or act this way.

It isn’t a natural thing to divert every day spending money into an account that will actually earn money for us. Why? Because nobody wants to spend that much time and energy scrutinizing their expenses. After a long work day which most people have, the last thing they want to do is sit down and go over daily expenditures. If I’m gonna do that, I’ll hire an accountant and then all the money I’ve “saved” will end up going to her anyway so what’s the point?

Then there’s the Netflix argument. By getting rid of your cable, satellite or what have you, Netflix is only $20. They have an instant watch feature which is great and there’s also HULU which has some stuff. But if you like shows that HBO has you’re out of luck. Yeah, the library is FREE but the hassle of getting down there, actually finding something they have in stock (if you even have a decent library anymore) and then having to go down there again to return it…not for me, thanks. Plus, you can’t keep anything you get from the library for more than 2 weeks. With 2 kids in the house it’s just not reasonable. I’ll keep my satellite service and my DVR, thanks.

Get rid of your land line? That’s not a bad notion if you have a cell phone but since I work from home I need both so I’m not tying up my land line all the time.

So if you can’t out-frugal your way to riches what can you do? Well, that’s what Ramit Sethi talks about all the time at his blog I Will Teach You To Be Rich and his program Earn 1k.com. I’m not getting any money for mentioning these sites if that’s what you are wondering. They are great sites and if you’ve read his book I Will Teach You To Be Rich you know he’s got some great advice.

The key thing to having more money is to find a way to EARN MORE THAN YOU SPEND. Weird huh? Most people try to SPEND LESS THAN THEY MAKE.

Then by setting up automated bill payment and saving methods you don’t have to worry about spending money on $5 lattes, sodas and movie tickets.

I can’t recommend this book enough. It’s changed the way I look at not only the money I earn but how my ideas can make more money so that I can be happy and not stressed out because i’m going “overbudget” by seeing a movie or having a slice of pie.

So, are you one of these uber-frugal people? Do you actually put away the money you are “saving” by not buying these little things? I’d like to hear your thoughts. Now, watch this video to understand what I’m talking about.