Do you dread taking a peek into your bank account?
Do you try to find excuses to delay paying off your bills, secretly knowing that there just isn’t enough money in your bank account to cover the bill?
And finally, do you always ask yourself “Where the heck did all my money go?”.
I can bet a million dollars that the answer to all these questions is a resounding “Yes”.
The good news is that you aren’t alone.
This also happens to be the story of billions of people worldwide.
People who work hard at their jobs and are still too afraid of checking their bank accounts for fear of what lurks in there.
(By the way, most people’s biggest nightmare is a negative account balance or the dreaded non-sufficient fee (NSF) charge.)
Hell, even I was in that boat till 2008. a decade ago.
Now, let me tell you something which will probably shock you a little.
Getting out of this situation is simply a matter of reading every single word of this article & then taking decisive action.
Yes, it might sound too good to be true but this article just might change your life.
Let’s face it: Most of us know next to nothing about our finances.
Here is where our financial knowledge ends: Get a good education and line up a good job, Make money at your job, pay off student loans and your bills, miraculously save a little, put some into a retirement fund & maybe invest in a house for when you get married.
I hate to break it to you, but if you don’t want to slave away at your job till you’re 70, you will have to put in a little more effort than that.
I’ve been where you are, and it took many complex trials and errors before i realized the simple truth; This is why I have written this definitive guide, which can save you at least $6,000 per year – guaranteed.
Please note that the $6,000 amount I mentioned is the absolute lowest you can save – if you & your significant other have decent jobs, that figure climbs to a whopping $10,000.
Also notable is that the money-saving strategies I mention in this article do not require you to make sacrifices. No way, we all get only one life, and I am all for living it to the fullest.
On the contrary, these strategies will save you money and dramatically improve your life & lifestyle.
This is exactly how I turned my life around and became financially independent.
In order for this to have maximum impact, I want you to put aside all your preconceived notions & dive deep into this article. If the stuff in this article can help me transform my life, it can do so for you as well.
So let’s get cracking.
Strategy #1 – Don’t drive yourself to death (literally):
How far do you live from work? 30 minutes away? 60 minutes away? In Canada, it is a norm to drive at least 2 hours to and from work every day. This results in at least 2 hours wasted every day, along with the stress that comes with driving for such a long time. It also dramatically increases your expenses – you burn gas and your car depreciates (loses its value) much faster.
Research shows that 2 hours of driving every day, results in a total cost of $2,300 in gas per year as well as $4,000 per year in depreciation of the car. This does not even include the potentially fatal situation of getting into an accident.
The solution:
Move within a 5-10 km distance from your office. Ask your manager to allow you to work from home a couple of days per week.
Potential savings per year: $2,300 + $4,000 = $6,300.
Strategy #2 – Pay your credit card in full every month:
If you carry over a balance on your credit card, it makes the credit card company very happy. They are able to charge you 19% to 22% interest on the entire balance outstanding. In fact, they have been able to do so religiously for the past 50 years, allowing them to generate billions of dollars in profit.
If you have $2,000 balance on your credit card, you will pay $800 just in interest over the years if you just keep making minimum payments.
The solution: Either don’t buy things you cannot afford, or make sure that you pay for them before the due date on your credit card.
Potential savings per year: At least $500
Strategy #3 – Change the terms of your mortgage:
If you, or your family, owns your home, there’s a good chance that there is an outstanding mortgage on it. If that’s the case, you are most likely making your mortgage payment per month or bi-weekly, which in this instance means every 2 weeks.
There’s another way to go about it which will save you tens of thousands of dollars of interest during the life of that mortgage.
The solution: Book an appointment with your bank. Tell them that you want to pay the mortgage in a bi-weekly or weekly accelerated manner. This means that you pay slightly more every period, but as you are making the payments at quicker intervals, you get charged less interest.
Don’t worry if this doesn’t make sense. Just talk to your bank & tell them to revise the mortgage agreement.
And no, you won’t have to pay the bank a fee to review the agreement.
On a standard 25 year mortgage, you should be able to save $10,000 to $30,000 by making this very small (but meaningful) change.
Potential savings per year: You save a decent chunk in interest every year: At least $600.
Strategy #4 – Stop poisoning yourself with fast food:
Fast food (think McDonald’s) is extremely unhealthy. This type of food is full of artificial flavors, fats & hard-to-digest elements. If that wasn’t bad enough, this food also lacks nutrients.
So if you eat junk food twice a week, not only are you setting your cash on fire, you are actively helping increase your health expenses 10 years down the road (because you will be sick).
Fast food also causes obesity, which is directly related to extremely painful & debilitating illnesses.
If you are a fast food junkie, watch the movie “Fast Food Nation” – it will help bring things into perspective.
I used to love junk food but I stopped cold turkey.
It has been 5 months and counting, and I haven’t been to a single fast food restaurant.
If I can do it, so can you.
Remember, it’s not that some people have the willpower and some don’t. It’s that some people are ready to change and others are not.
The solution: Stop eating this crap. Switch to vegetables, less red meat, more olives and best of all, preparing food at home.
Potential savings per year: At least $2,400, assuming a ridiculously low amount of $200 per month.
Strategy #5 – Cut the cord:
Let’s face the facts, who even watches Cable TV, in this day and age?
Here are some excuses you might be thinking of:
“My family loves cable! How can I just get rid of it? We all sit together everyday and watch Dr. Phil tell 13-year old girls to get a life!”
“Uh, I love watching the news & falling asleep on the couch.”
The fact is that Cable TV is a relic from the past when you didn’t have the facilities to not watch 40 minutes of advertisements, and 20 minutes of actual content.
Remember, if you have Cable TV, you are paying a lot & essentially burning through your hard-earned money to make your cable provider rich (at your expense) as Cable TV companies make a boatload of money because this market segment has very high profit margins.
Cable TV also promotes an unhealthy lifestyle, where you veg out on the couch waiting (and wasting time) channel surfing in the hopes of something worth watching coming on. (But that’s an issue for another article/ that’s neither here nor there).
The solution: Switch to Netflix. They have a ton of movies, TV shows and documentaries. It costs only $9-10 per month, not to mention the time you save not channel-surfing or watching advertisements.
For news & other stuff, just go online and check them out for free.
Potential savings per year: Assuming that you pay just $60 per month for cable (I know many people paying over $100 per month), the total savings would be $720.
Strategy #6 – Stop making car companies rich:
Do you have a BMW, Mercedes, Audi or maybe an Aston Martin?
Ask yourself “Did I buy this car because it makes me happy or because I wanted to impress other people?”
Chances are, your self-esteem is at least a little dependent on the car.
This means that you bought this particular stallion of a ride to get validation from others.
You might be getting that validation but remember that it is you who is working hard every day to make the payments on that car, not your neighbors or friends.
The solution: If you bought the car for the wrong reasons, see if you can get rid of it without taking too much of a hit. Go to Autotrader.com, Kijiji.com or Craigslist.com to talk to potential buyers.
If it is a lease, call up your car dealership and see what can be done to get out of it. Then buy a 5-8 year old, common vehicle such as Honda Accord or Honda Civic for as little as $7,000.
Potential savings per year: Assuming that you make an average monthly payment of $600 on your car, you are spending $7,200 per year on the payments alone. If you are able to sell this car & buy an older version like mentioned above, you will save at the very least $5,000 per year.
Strategy #7 – Cut down on drinking and smoking:
Yes, I understand it is a habit.
Yes, I understand it is really difficult to stop.
But do you understand the costs of not doing so?
Someone who smokes a pack everyday is spending $3,600 on cigarettes every year.
Someone who drinks 2 beers everyday is spending $1,440 per year.
But that isn’t even the total cost.
These 2 lifestyle habits will also most definitely hurt you down the road.
Smokers & alcoholics pay a lot more in health insurance and are statistically likely to fall sick in their 40s and 50s. Their treatments can cost over $100,000 depending on the intensity of their addiction.
The solution: Stop indulging yourself in these habits & replace them with something more constructive.
Potential savings per year: Assuming that you smoke and drink, if you cut down only halfway, you will save $2,520 per year.
Strategy #8 – Stop making your cell phone company rich:
Chances are, you have a cellphone. And statistically, you are probably paying $80 to $100 per month for these services.
This happens because you are paying mostly for things you don’t use but which make the cell phone company more money.
Are you really using 5 GB of data every month? If you are, you are doing something wrong.
Are you using all those long-distance minutes?
Do you really need that unlimited text message package?
Remember, you can do just fine with a lot less in this case. You may think you need them, but you really, really don’t.
The solution: Call your cell phone company & ask them if they have any deals going on. Tell them you want to change your package to the “basic” one. It shouldn’t cost more than $45 per month.
If they refuse, you can tell them you want to cancel the plan and move to another company. They will send you to their customer retention department, where you will be treated like royalty.
Potential savings per year: Assuming that you were paying $90 per month & you were able to get a basic package for $45 per month, you are saving $45 per month. In a year, that adds up to $540.
Strategy #9 – Check your credit card statement:
When was the last time you actually sat down and checked your credit card statement? If you are like most people, the answer is “Never”.
The thing is, you might be paying for things you never bought, or things you had bought in the past but are no longer using – but if you don’t check your statements, you won’t know for sure.
I can guarantee that there are at least 3 charges on your most recent credit card statement which are either fraudulent or which you have forgotten about.
The solution: Log in to your bank account & check the statements for the last 3 months. If you find anything suspicious, call your credit card company and have those payments reversed.
Your credit card company works for you (and not the company you bought from), and will do everything to ensure that you are not losing money through these activities.
Potential savings per year: At least $600.
Strategy #10 – Cancel subscriptions which you aren’t using (and don’t plan to either):
Gym memberships, grooming kit memberships, magazine subscriptions, Cable TV subscriptions, home phone subscriptions etc. – if you aren’t using it, it isn’t benefiting you. Just call the company & cancel these subscriptions.
Even if you are in a contract, you are still losing money because you keep paying for these things and you don’t use them.
Hell, I used to pay $160 per month for a beautiful, classy all-inclusive gym in Mississauga called Lifetime Athletic.
In 2016, I decided it wasn’t worth the price so I canceled it, saving over $1,920 a year.
The solution: Do yourself a favor and cancel memberships you aren’t using. Check your credit card statements – there will be at least 3 charges on there that you keep paying for but aren’t using at all.
Plus, you have to remember, you live in a convenient world where resuming any of these services is hardly an issue. If you ever need to restart any of these habits, it’s all barely one form and a payment away.
Potential savings per year: At least $600
Strategy #11 – Keep “Consumerism” in check:
Let’s assume that your family wants to go downtown to this fancy new Italian restaurant with raving reviews & delicious food. You make a plan simply on a whim and leave with your family at 6:30 PM.
First of all, you encounter a lot of traffic on the highway – you keep idling in traffic & reach the restaurant by 8:00 PM.
This has resulted in undue stress and a higher gas expense (not to mention a major waste of time).
You now realize that you have to find parking.
Because it is peak hours, you are only able to park 1 km away and pay $12 per hour for the parking (for 2 hours).
You walk to the restaurant, get seated and place the order.
Because the restaurant is busy, you wait 40 minutes for the food.
After eating, you pay $100 at $25 per head, assuming there are 4 people with you in total.
You then also pay 10-15% in tax for a total of $115.
You then also tip the waiter the customary 15% because “hey, he deserves it!”.
In the end, with parking, food, taxes and tips included, you paid a grand total of $154.
This expense does not factor in the cost of depreciation on your car, the time you stayed stuck in traffic etc.
When all is said and done, you were just paying for “consumerism” and “a fancy ambiance”.
Was it worth it?
Put it to you this way, the answer would probably be no.
The solution: Understand that TV, radio and online ads have brainwashed us into becoming mindless consumers.
From “Man, I really need that BMW!” to “Cuba does look inviting – it only costs $500 per person”, we are constantly coerced into making financial decisions which haunt us years down the road.
So before you “take a trip”, figure out what the real costs are & then plan accordingly.
You will save over 50% in expenses if you don’t go to places which are “tourist traps” or where the prices are “commercially inflated” because everyone wants to go there.
Want to visit a new country? Go in the off-season and don’t book a hotel – book an apartment using AirBnb.
Want to book a flight? Book 6 weeks in advance.
Want to go to a concert? Book 4 weeks in advance & don’t get seats right next the stage – they are a rip-off.
Potential savings per year: Depending on how lavish your lifestyle is, you should be saving at least $4,000 to $8,000.
Strategy #12 – Stop paying atrocious bank fees:
Here’s something you might not know – your bank is charging you $10 to $30 per month to service you.
This does not include any ATM withdrawal charges, charges for sending money, for getting a certified draft etc.
If you are using all these additional services, you are paying your bank at least $50 per month.
It doesn’t sound much, but this amount adds up over time.
Have overdraft protection? If you manage your finances well, you don’t need it so it doesn’t make sense to keep paying for it.
Have an insurance from the bank? Chances are, you don’t need it because your credit card as well as your employer are probably covering you for the same issues.
The solution: Give your bank a call & ask them how much they are charging you monthly. Then tell them to switch you to the basic package.
Once they do, make sure you understand what this package covers – you don’t want to go over the limits imposed in the basic package, otherwise you will be charged more, defeating the purpose.
Potential savings per year: Assuming a monthly saving of $20, it come to $240 per year.
Strategy #13 – Go to the movies sparingly:
Yes, we have have an urge to watch every new blockbuster movie that comes down. However, doing so puts you flatly in the “consumer” category since if you are going to the movies as soon as they are released, you are also paying top dollar for popcorn, drinks and nachos bought at the cinema.
While this might sound like a small expense, it can be eating you alive.
Let’s work the numbers:
Assuming you and your significant other wants to partake, it will cost around $11 per person for a movie ticket.
You will then buy nachos, popcorn or drinks for at least $10 each.
Add it all up and it comes to $42 per person.
But you forgot tax!
Let’s add another 13% on it to get a nice rounded-up figure of $50.
I bet that number doesn’t look so small, huh?
The solution: Learn to resist the urge to buy or consume things which are “new”. This applies to movies, cars, vacations – you name it.
When something is “new” and “just released”, you are always paying top dollar for the novelty of it.
This also means that the movie you go to might be crap (even though it was just released), but you threw away $50 for the “experience”.
Want to save a small fortune?
Watch slightly older movies on Netflix for free.
Potential savings per year: Assuming that as a couple you go to the movies 2 times a month, in a year you visit the movie theater 24 times for a total cost of $1,200.
Strategy #14 – Stop binge-shopping clothes & accessories:
Ladies, I am talking to you, although sometimes men are guilty of this too.
I want you to do something: Go to your wardrobe and look at it.
I mean, really look at it.
You will see that the vast majority of clothes in there have been worn once or maybe twice.
Yet, there is this urge to keep up with the fashion trend.
This is nothing but “consumerism” at play again.
Subways, malls, giant billboards – all these places have these big fat ads which brainwash us to part with our cash in order to make the rich even richer.
The fact is that financially intelligent people only go for classic, time-tested clothes, shoes and accessories.
This means that these can be used for decades, assuming that they are taken care of.
So ladies, the next time you see that Louis Vuitton handbag, understand that you aren’t really paying for the handbag, you are paying for the illusion of social status & also for the advertising budget of LV.
Gents, that $1,500 Rolex watch will not improve your social status in the long-run if you have to slave away an entire month at your job just to pay for the watch itself.
The solution: Google up “classic clothes for men/women” and study the listings which show up.
Then go to the mall (or order online) and buy only those items.
You now have a new wardrobe and you can use it for the next 10 years, at the very least.
Potential savings per year: Assuming an absolutely low figure of $250 per month that you spend on clothes, shoes and accessories, this comes down to $3,000.
Strategy #15- Use stuff you have no choice but to pay for:
This one is huge. Did you know that you pay (in one form or another) for the development of the area where you live?
Let’s assume you live in Houston, US.
If you own your property, your property taxes pay for the libraries, hospitals, parks and community centres in that area. If you rent the property, your landlord does so and therefore charges you for it.
Since you are already paying for these facilities, why not use them?
The sad thing is, most people don’t.
Ask yourself, “When was the last time I went to the library, the park next to my house or to the community center for swimming or playing squash?”.
Chances are, the answer for you is “3 years (or more) ago”.
If you aren’t using these facilities but are still paying for them, it can mean only 1 thing: You are subsidizing this for other people, at your own expense.
The solution: Use the facilities you pay for.
Don’t buy new books from Indigo. Go to the nearby library & get the book, read it and then give it back.
Don’t go to avenues where they are charging an arm & a leg for entertainment, go to your nearby park, biking trail and community center instead.
Potential savings per year: At least $2,400.
Strategy #16 – Ditch your landline:
If you are like most people, you almost never use your landline because you have a cellphone.
Yet, because of tradition, you keep the landline active.
The honest truth is that you don’t need one but you are spending $35 to $60 per month on it.
The solution: Call your landline provider and cancel the plan. They will try to keep you signed up by reducing the price. Don’t give in to it. Just get rid of the landline.
Potential savings per year: Assuming a base price of $35 per month, you will save $420 per year.
Strategy #17 – Stop the daily coffee habit:
OK, now you must be thinking “This is it! Telling me to stop getting my daily mocha is just rude!”.
Let me ask you a question: Do you get your coffee (or tea) daily from a place like Starbucks?
If the answer is yes, you are probably paying $3-4 per cup per day for it.
This translates to $90-120 per month and $1,080 to $1,440 per year.
If you are earning $30,000 to $36,000 per year, this is a fairly big chunk out of that amount.
That being said, I am not saying you stop drinking coffee, just that you stop making someone else rich at your expense.
The solution: Get a coffee brewing machine from Amazon for $45 and make your own coffee.
Potential savings per year: At least $1,080 per year as described above.
Strategy #18 – Stop getting ripped-off by mutual funds:
Mutual funds are a rip-off – plain and simple. People who do not know much about handling their finances “invest” in mutual funds.
Wealthy people simply do not do so and for good reason.
Mutual funds invest in baskets of stocks and bonds, which are investments with very low and sometimes even negative returns.
Also, irrespective of whether you make money or not, your bank will keep charging you a fee for “managing” your funds.
This can be 1% to 2.8% of the total funds you have invested.
As an example, if you have $50,000 in mutual funds, your fund provider will charge you at a minimum $500 every year to manage your fund.
Worst case scenario, you will be paying a management charge of over $1,300 if the fee is higher.
The solution: Stop investing in mutual funds. Instead, use a discounted online brokerage where you don’t pay a fee at all.
Potential savings per year: At the very least, $500.
Strategy #19 – Get a credit card with reward points:
People usually preach getting rid of credit cards. I don’t. I love credit cards & would encourage you to use them as well.
Credit cards help you keep a track of your expenses, allow you to build credit history so you can borrow to buy things down the road and help you benefit from reward points.
Long story short, when you buy things using your credit card, you accumulate points, which you can use down the road.
I have a travel reward points card from RBC called “Infinite Avion”.
I buy stuff using that credit card because with the amount I spend, every year I am able to book a return flight from Canada to Pakistan for a total value of $1,850.
Not a bad deal at all.
So if you are paying for things using debt or even worse, a debit card – stop.
Using cash or a debit card does not help you build a credit history or get reward points, both of which are self-defeating in my opinion.
The solution: Call your bank and ask them about their credit cards. Tell them which one you need – they most likely offer different cards for different purposes like travel, cash-back, grocery shopping, cinemas etc.
Potential savings per year: Depending on how much you spend using your credit card, anywhere between $300 to $3,000.
If you have read so far, you are committed to improving your finances, saving money & dramatically improving your lifestyle.
I congratulate you.
Just to recap, this is how much you will save at the very least every year, if you were to put all these strategies into action:
Strategy Minimum savings per year
Don’t drive yourself to death $6,300
Pay your credit card in full every year $500
Change the terms of your mortgage $600
Stop having fast food $2,400
Cut the cord $720
Stop making car companies rich $5,000
Cut down on drinking & smoking $2,520
Stop making your cell phone company rich $540
Check your credit card statement $600
Cancel subscription you aren’t using $600
Keep consumerism in check $4,000
Stop paying atrocious bank fees $240
Go to the movies sparingly $1,200
Stop binge-shopping $3,000
Use stuff you have no choice but to pay for $2,400
Ditch your landline $420
Stop the daily coffee habit $1,080
Stop putting money in mutual funds $500
Get a credit card with reward points $300
Grand total $32,920
Yes, you read that right. This is a pretty big number.
This number might give you the answer to “Where did all my money go?”
And a family of 4 in the US or Canada statistically does burn through this much cash on pointless stuff every single year.
No wonder most people are all the way up to their eyeballs in debt and are living paycheck-to-paycheck.
Now, admittedly, some strategies I mentioned might not be for you for one reason or another.
Even if you put half of these into action, you still save $16,460.50.
Let’s be really conservative with this scenario.
Let’s assume you are not able to use only 20% of these strategies to improve your life.
In that case, you still save $6,584.20.
Remember, this is the absolute worst-case scenario.
Now that you have a step-by-step checklist for saving at least $6,000 per year, I suggest you start putting this into action.
If this guide helped you think in a radically different manner, please share it with your friends & family since they deserve the best in life as well.
To your success,
Yasir Khan