Hello Grasshoppa,
Optimizing my expenses or looking for ways to save money is always a practice that I do constantly. If you often analyze your expenses, you will find ways to save money. Sometimes, some of the ways of saving money come from just minimizing expenses but some may also come from spending extra & save over a long period of time.
In my early days of reading personal finance books, there was this book that I read that the author was talking about buying a new car can help to save more than driving an old car. At first, it didn’t really make sense to me but after experiencing it in real life, I realized that he made a valid point. When I was driving my old Naza Suria, even though I was done serving my car loan, I had to still pay for constant repair works that cost around RM4000. I remembered spending almost RM10,000 over a period of 12 months just for the repair which led me to change to my current car. Aside from spending money for repair, the time that I wasted coordinating while my car is spoiled is also a pain. Although I am spending slightly more on my new car, I get to enjoy the comfort & also stress-free situation related to repair. Over a long period of time, I am seeing long-term savings in terms of car repair & also fuel consumption savings.
The concept of spending more to save more is not foreign to many of us but accepting it can be hard sometimes. This concept usually applies over a longer period of time instead of a short-term saving. Taking my car as an example, my long-term savings include cheaper car parts, fuel saving & also fewer repair costs but I have to pay a higher car loan. Once I finish paying my car loan, this is where I am able to save more money. Another saving that I am seeing recently is when I spent almost RM700 on a tactical backpack. On a daily basis, I have 3 bags that I carry & with the new tactical bag, I get to consolidate everything into a bag. Aside from that, due to some valuables in the bag, I have to park in the indoor parking each time I go to the gym. Since purchasing the tactical bag, I get to save money by parking outside since I am carrying all the items along with me. My overall savings just from the parking itself is around RM150 a month which I can break even after 5 months of using this bag.
My house renovation has also recently been completed especially in the kitchen area. Previously, I had a challenge cooking in my studio since it was quite inconvenient. Especially when I am living in a studio where the kitchen & bedroom are in the same area, I have limitations in cooking. That resulted in me eating most of my food outside which cost me quite a lot each month. With the kitchen ready, I am preparing 50% of my current meals at home while another 50% is eating out. I never knew how much I was able to save since I have been eating out a lot over the years except during the pandemic period but I am able to see a huge saving for my food expenses as well.
I am a heavy coffee drinker & I also approached the Latte Factor religiously. Even though I love drinking coffee, I will try to save as much money as possible on a cup of coffee. I have previously invested in a coffee machine but after preparing it for a period of time, I realized that the taste can’t match the ones that I drink in a cafe. So I decided to invest in a better coffee machine to minimize my latte expenses but after speaking to one of the cafe owners, it seems that investing in a better coffee machine was not the solution since the good ones will cost RM10,000 & above. Over a 10-year usage, it is also causing me RM1,000 per year which does not make sense even though I am using it daily. Instead, he suggested I invest in a coffee grinder which cost me around RM400. Why a coffee grinder instead of a machine? According to him, to make better coffee, the coffee beans have to be ground fresh instead of grinding in advance. My previous practice was to buy beans from the cafe & get them to grind them. With my new coffee grinder, I get to drink a better cup of coffee which also limits my visits to the cafe. I am able to save at least RM100 or more a month just by having a lesser visits to the cafe.
Conclusion:
Saving money can come in many different forms, all you have to do is to look into your expenses frequently & find the best ways to save money from them. You will often be stuck in the scenario where you think that you cant save since you have fully optimized your expenses. If you do, challenge yourself by looking into some of your bigger expenses to see how can you optimize from there. If you need to spend extra money to have long-term savings, why not? Similar to our financial goals, we should always have a long-term plan instead of only looking at the short-term plan.
OSS!
You can also check out my latest YouTube video on How To Invest Like Warren Buffett:
