Stefan Saves Sacks of Cash (Part 1) - A Guest Blog

Happy New Year everyone! I know that seems a bit belated, but 2009 really is a new year for me. I decided to change my spending and saving habits starting January 1st by utilizing Generation Millionaire’s tips. After 1 month it’s amazing how different my bank account looks and how little my lifestyle has changed.

To start, here are some facts about my earning and spending:

I am earning around $35,000/year (this is GROSS INCOME)
I put 15% of my GROSS INCOME into my 401K yearly
I pay $350 rent/month
I pay $468 in student loan repayment/month (paying more than required to pay it all off in around 7 years)

Knowing that, I can easily figure out how much money I have to work with each month by deducting $818 from my net monthly income. I also have misc. utility costs, food expenses, fuel for my car, car maintenance, etc. However, by using these tricks I have saved more money than I thought I would ever be able to.

1) Use fuel perks to your advantage. This topic and the next go hand in hand because my local supermarket gives discounts on fuel when you purchase groceries from their store. I know that my car needs to be filled up about every 2 weeks give or take a couple days. What my girlfriend and I do is build up our fuel perks and fill up our gas tanks at the same time. The perks can be used for up to 30 gallons of gas, so why fill up one car? Our cars combined only hold about 25 gallons, so we both share the discounted fuel. This is especially critical when gas prices are on the rise.

2) Shop for groceries ONCE PER WEEK. I can’t even stress how important this change has been to my saving. My girlfriend and I sit down toward the end of the week and make dinner plans for every night of the following week. We decide what meat, vegetable, and side dish for every night from Sunday through Saturday, and also figure out if we’re going to have leftovers, because that means we can eat that meal twice for dinner, or for lunch later in the week. We scour newspapers, daily mail advertisements, and the internet for coupons. Coupons will save so much money over time, and they’re free, so not using them is wasting money. Our grocery store has many weekly specials, so we watch for things that will be at a huge discount or buy one get one free so we can stock up. This eliminates the need to purchase that item next week, and saves more money. By shopping in this manner we only go to the store once per week and we have a set list, so this ELIMINATES IMPULSE BUYING! No longer do we go to the store multiple times per week. You’ll find that even if you go in for only a gallon of milk, you’ll leave the store having spent $10-$20. If you only go once/week that’s $10-$20 saved. Our grocery costs have gone down to about $35/week each. That means we’re eating breakfast, lunch, and dinner every day for $5 each (that’s $1.67 per meal).

3) Put away the credit card. In 2008 my total credit card spending totaled over $5,000. That’s not too bad for some people, but for me that was a ton! However, once I started practicing the Generation Millionaire way my spending went way down. The last 4 months of the year totaled less than $1,000 of my spending. I was using my credit card without even realizing it before. Now I only use my credit card for gas purchases. And since I only fill up a couple of times per month, my credit spending is less than $100 each statement.

So those are the only real changes I’ve made. Doesn’t seem too difficult and it really isn’t. Here’s the best part, the part where I have more money. By taking advantage of fuel perks, shopping smarter and using coupons and weekly specials, and by using my credit card less I am literally saving HUNDREDS of dollars each month. No longer do I purchase a burger or a burrito 2-3 times a week for lunch. No longer do I stop in at the store on the way home and walk out with $20 less in my wallet. No longer am I putting lots of purchases on my credit card.

Now that doesn’t mean I’m super cheap. My girlfriend and I still go out for a dinner together once or twice each month. Doesn’t have to be fancy or expensive, but I’m not fretting if we spend $40, because we’ve cut back in so many other ways we can afford it. But because we’ve cut back I can put $100 from each paycheck into a savings account that I plan on using as a down-payment for my first house. And even with that $200 into the savings account my checking account still has more money in it than used to.

Simple steps, easy work, and the only change in my life is that I have MORE MONEY!

I will post again in about a week to discuss the way my girlfriend and I have changed our social spending habits. They say the best things in life are free, and going out for entertainment can be free if you keep your eyes open!!!

Stay tuned...