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Leo Babauta: How I Save Money

Contributor:
Leo Babauta
Leo Babauta

I think I’m a fairly frugal person. I haven’t always been this way,
and it’s taken years of simplifying and cutting back on little things,
one at a time. And while there are definitely many more things I can
scrimp and save on, I’m proud of how far I’ve come already. Here’s how
I save money:

1) I cut my own hair. I
bought a $20 buzzer, and it lasts about a year. I used to get a haircut
every month, at a cost of $20 (including tip, not including gas money
to get there and valuable time spent there). So I save the cost of
about 11 haircuts a year. I do the same for my three sons, saving
another 36 haircuts (at $10 each). Annual savings: $580.

2) No pay TV. We watch
DVDs, or read. I don’t spend much on DVDs either (probably less than
most people, per month). Satellite costs about $50 or more per month. Annual savings: $600.

3) Became vegan. I eat a lot
of fresh fruits and veggies, which are expensive, sure, but you are
supposed to eat those whether you’re vegan, vegetarian or a carnivore,
so I don’t count those as extra expenses. The real comparison is
between meat, and the protein substitutes I use. Most of my protein
comes from tofu, although I do eat beans and soy protein such as fake
ground beef or soy burgers. Overall I believe I save about $2-3 per day
not eating meat. Annual savings: $900.

4) Don’t use the gym. I used
to be a member of a gym. Didn’t use it much, and still got charged for
a full year. Now I get a lot of exercise, but I do it at home and on
the road. I do strength exercises in my living room and jog (and will
soon start cycling and swimming). Annual savings: $420.

5) Rarely go to the movies.
I used to go out to the movies at least once a week, and sometimes
more. I slowly made it every other week, and now I don’t even go once a
month. Now we take the kids to the park or out to do something more fun
and creative. I figger this saves me at least $15 per week, although
it’s probably more when you factor in the cost of my kids’ tickets, and
concessions. Annual savings: $780.

6) Quit smoking. I quit over
a year ago. I smoked a pack a day, plus a soda or tea or coffee to go
with the cigarettes, at a cost of about $5 per day. Annual savings: $1,825.

7) Don’t drink much. I never
did, really, except maybe in college. But for some people, drinking is
a major expense. A beer or two a day can add up, and for the sake of
these calculations, I’ll count it. Annual savings: $800.

8) Never go out. I don’t go to clubs, or the theater, or ballet, or opera. I guess I’m just not that type of person. Annual savings: maybe $500.

9) Stay healthy. As
mentioned above, I’m a vegan, a runner, and I don’t drink or smoke
anymore. I never go to the doctor, and if I keep up this lifestyle, my
likelihood of getting the most common diseases are greatly lowered. Annual savings: probably $1,200.

10) Don’t go shopping. We
used to hang out at the mall a lot. It was convenient, and had a lot of
great stuff to look at, and a food court. The food court alone costs
$30 for us, and if we bought stuff that would be another $25-75.
Cha-ching. Now I rarely ever, ever, ever go to the mall. I hate it
anyway. I only go to the mall or Kmart if I need something, and even
then I try my best to avoid it. Annual savings: probably $2,600.

11) Have only one car. We
are a married couple with six kids, soccer practice, choir, school
functions, many many family gatherings, running events, martial arts,
and much more. But we get by on one car. We are looking to get a used
van with better fuel economy, and I am going to start commuting at
least a few times a week by bike. Annual savings: unknown, but perhaps $5,000.

12) Bring my own lunch. My
co-workers eat out every day, at a cost of $8-20 per lunch. I bring
leftovers or a sandwich and fruits and pretzels and stuff. At a cost of
probably less than $5. Annual savings: $1,800.

13) No magazine or newspaper subscriptions.
I used to have the paper delivered. Now I read it online or at work. I
used to subscribe to 1-2 magazines. Now I read the Internet. Annual savings: $360.

14) Rarely buy new clothes. I use my clothes and shoes until they are threadbare. Really. Ask my wife and kids. Annual savings: maybe $400.

15) Never travel. I would
like to travel. When I am out of debt and my savings accounts are nice
and healthy, I will travel. But for now, I skip it. Others I know take
at least a trip per year. Annual savings: $1,500.

16) No more lattes. I used to get a latte every day. At a cost of about $4 per latte. Sometimes I’d get two. Now I make my own coffee. Annual savings: about $1,000.

There are more little ways that I’ve learned to save, like getting
my books at a used book store, cooking most of my meals (aside from the
above-mentioned lunches), power-saving measures, no long distance
calls. There are also ways I can still save, including eating out less
(we eat out 1-3 times per week, mostly fast food like pizza or Taco
Bell or Wendy’s, all of which I can do without).

Estimated total savings: $20,265.

Now, I’m not sure if most people spend the full amounts listed
above, or if I ever did. But at some point, I did come close, and I
think many people do as well. But however you look at it, I’m proud of
how far I’ve come. Does this all go into savings? Of course not. Other
expenses have gone up, because I now have six kids, and our income has
temporarily gone down. Also, we’re now putting money into debt, and
once that is freed up, more will go into savings.

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