I don’t know about you, but I look at the world around me, and struggle to make sense of it. While military conflicts rage across the world, there is also a very real worry that artificial intelligence could take away several jobs, perhaps even yours or mine. These are important things to think about, but it is even more important to acknowledge that unless you are Donald Trump or Sam Altman, chances are there is nothing you can do about the outcomes of these issues. I often find that there is freedom in accepting what I cannot control.
However, when I am faced with challenges far above my paygrade, I focus on the things that I CAN indeed control. In this circumstance, it means focusing on my budget, finding ways within it to save money, and then rerouting that money to savings, thereby building a more robust emergency fund or savings account which provides a bulwark against any financial catastrophe.
(Note: Your bulwark could be as robust as ‘The Wall,’ the Great Wall, or Hadrian’s Wall. The most important thing is that you have a wall. You can always build on it in time!)
I can already picture some of you rolling your eyes. I understand, in these times of rising inflation and out of control prices, how can anyone save more! Actually, I have a few ideas, some that I personally follow, others that I have tried from different cultures around the world. Not all of these ideas will work for everyone, but I hope you get some value out of a few. In no particular order, here are my top tips.:
Japan: The Kakeibo Method
Anyone who has read my column knows how much I love budgeting, and because of that, I’m constantly looking for new ideas and ways to budget. In my research, I came across the Japanese Kakeibo method. Pronounced Kah-Keh-Boh, this is both a physical written household budget, and also a way of life for those who intensely follow it. It was created in 1904 by Japan’s first female journalist, Hani Motoko. Simply put, you write down your income, expenses, and savings targets, and then enter your actual expenses at the end of the month. You also include your own analysis, as a form of journal entry.
Tip 1: Ask yourself four questions before you make any discretionary purchase – How much money do I have? How much do I want to save? How much can I spend? How can I improve?
Tip 2: Wait a while – leave those items in your cart for about 24 to 48 hours. If you still want it after some time has passed, and you can afford it, then consider it.
Japan also has a culture of mottainai, or mindful consumption, which “embodies the principles of reduce, reuse, and recycle, fostering respect for the objects we use and the environment they come from.”
Tip 3: Waste not, want not – try to reuse, reduce, and recycle when you can.
Tip 4: Learn basic repair skills – you don’t have to be the best at it, just learn enough to help yourself when you need it.
Tip 5: Marie Kondo your financial life by getting rid of subscriptions and monthly charges you don’t use, especially the ones that don’t spark joy!
Sweden: Ikea, Fika, and Lagom
If the story of Goldilocks could be distilled into one word, the word would be “lagom” a Swedish word that means “not too much, not too little, but just the right amount.” It could also be a way to consider doing things mindfully, while also avoiding excesses, or even excess frugality.
Tip 6: Make sure your budget is enough for you – not too much, not too little.
Tip 7: Consume enough. Just what you need, and some of what you want, not all that you want. You can also find meaning and joy in non-material things, so sometimes, consider that!
Tip 8: Sweden’s neighbour Norway has friluftsliv – or “open-air-life” which involves enjoying nature. In many places, this is free so that’s a bonus.
Tip 9: Scandinavian countries are big on exercise. When you can, cycle or walk. Saves gas money or transit fees, and makes you healthier.
The Chinese Great Wall
Chinese households have a high savings rate. There’s plenty to learn from that culture.
Tip 10: Make savings non-negotiable.
Tip 11: Bargain and negotiate. Whether it comes to phone plans, internet providers, or many other things, just ask for a better rate. Who knows, you could save hundreds over the year!
Tip 12: I’ve spoken before about the Chinese tradition of “Hóngbāo” or red envelope/pocket. Money is a great gift!
The Philippines: Children Are the Future
In Filipino culture, children are taught to save at a young age, usually using alkansiya, or piggy banks.
Tip 13: Start early, start small. Even if it’s just a little bit a month, saving is mostly better than not saving.
Tip 14: Teach your children to save too. They can start saving up from their allowance, it’s a continuation of the previous tip.
Tip 15: Help others. Bayanihan is a foundational Filipino cultural tradition where everyone helps a community member in need – often financially – without expecting much, if anything, in return.
The Benefits of Urban Living
Rural communities have their own benefits, upon which I will touch in a little bit. However, when you live in a large or mid-size city, you often have different options for saving money, including these:
Tip 16: Use public transit. It is often cheaper than driving, when you consider car costs like parking, and gas..
Tip 17: Shop multiple times a week, if not daily, for groceries, so that you buy only what you need and will use in that day or two. This reduces wastage.
Tip 18: Use public facilities such as urban parks, public libraries, and other things that are oftentimes free, if not cheaper than private comparables.
Tip 19: Meal plan, bring your lunch to work If you know exactly what you are going to eat, you won’t go overboard on purchases or eating out.
Tip 20: Patronize your farmers markets. This lets you know who is growing or caring for your food, and helps build local roots.
Tip 21: Invest in a clothes horse. Air drying clothes makes your clothes last longer, and reduces your utility bills. Win-win!
Embrace the Joys of Rural Communities
Living away from the hustle and bustle of big cities comes with myriad benefits – clear skies, less pollution, tighter-knit communities. It also comes with unique opportunities for saving money.
Tip 22: Grow your own food, when you can, especially herbs and vegetables.
Tip 23: Extend the life of your food. If you live far from cities, chances are you have more access to space. Which makes it easier to can, pickle, ferment, and make your produce last longer.
Tip 24: Forage, if you have your own land. You could find fruits, mushrooms, nuts, or wild herbs.
Tip 25: Lean into your community and build relationships so you can share things like tools and equipment.
Universal Tips for Everyone
Tip 26: Do an annual financial audit of all subscriptions, monthly expenses, recurring expensed, and memberships. Analyse if you truly use and need them and be ruthless about culling.
Tip 27: Check your home for money sucks. This includes drafts that let out (or in) cold air, leaky taps, always-on appliances and others. Then fix them.
Tip 28: Pay yourself first. That means saving first and then spending what’s left. And sticking with this point –
Tip 29: When you pay yourself first, make sure you know your salary. This means setting aside a fixed amount or % of your income for savings. That way you know exactly how much you need to save each month.
Tip 30: Be smart about where you save. If you’re a high earner, a Registered Retirement Savings Plan, or RRSP, is often a better choice than a Tax-Free Savings Account (TFSA.) Find out more about each here.
There you have it! 30 tips to save money. I hope you find at least a few that resonate.
Disclaimer
This communication should not be considered as advice and/or a recommendation to purchase or sell the mentioned securities or used to engage in personal investment strategies. Tax, investment and all other decisions should be made with guidance from a qualified professional.