You want more money. Even Warren Buffet, who has a lot more money than you or I, wants more money.
When it comes to saving money, or that nasty word budget, it’s a safe bet you have negative associations with the practice. You might think of the cocktails you won’t be having with friends, fishing trips you’ll be missing, and delicious foods you won’t be enjoying. Cheer up, man! I’m here to tell you there’s a way to spend less by spending more!
The principle comes down to one basic rule. Don’t make any big purchases of new items that won’t pay for themselves in the future. For example, a new house will likely appreciate in value over time and provide you with useable equity in a pinch, while a new car will depreciate in value, usually losing a fifth of its worth after just the first year.
In fact, Brian Tracy says in his book the Million Dollar Habits, that most self-made millionaires never buy a new car. They wait until it’s three or four years old, have it checked out by a reputable mechanic, and then drive it for eight to ten years.
This philosophy goes for things that cost a lot less. Don’t buy a new phone. Don’t buy a new computer. Don’t buy new clothes unless they’re on sale. With so many websites like eBay (which I know isn’t always reputable) and amazon, there’s greater opportunity to find like-new items that are marked down well below 50% of their original value. Remember, new is a scam. It’s a marketing technique that’s been ingrained by years of advertisement. If you buy new things, you’re cool.
That’s simply not true. If you have money, are not in debt, and have a well-thought-out investment strategy, that makes you cool. With that said, here are some notable exceptions of things you can buy new, when you can’t find them used, that will save or make you a boat load of money in the long haul:
- Energy efficient appliances such as washers, dryers, and water heaters cost more upfront but will save you thousands in the long run. High efficiency (HE) washers use about half the 40-gallon payload that standard washers use. Because of this, the spin cycle gets the clothes much dryer than a standard machine. This allows the dryer, which is the second biggest energy expense behind the refrigerator, to get clothes dry in half the time with half the energy. Heating water accounts for about 15% of your home’s energy use. High efficiency water heaters can save you up to 50% on water heating costs.
- Green modifications to your home such as blinds, insulated siding, and xeriscaping your home (beside saving you money) also have the additional benefit of possible tax deductions.
- Eating healthy is the ultimate preventative maintenance for the biggest expense you will ever incur: a hospital bill. Even with insurance, the financial ramifications of getting cancer, Type 2 Diabetes, or heart disease can be disastrous. When it comes to food, spend away! Don’t feel bad about going to your local co-op or Whole Foods to do your grocery shopping. A couple hundred bucks at the checkout line might seem like a steep price, but there is no price too high for having more energy and time on Earth with your family and friends.
- My favorite spend-money-to-make-money tactic is to buy that one appreciating collectable you can enjoy. Indulge in something that would otherwise be utterly impractical. Civil War pistol. A P-51 Mustang. An original Star Wars collectable. A classic car. With any collectable, make sure you store it properly so it can appreciate. Auto storage for cars, display cases for smaller trinkets, humid-free safes for stamps and firearms, and whatever laser guarded trap for your Star Wars things.
Now is the time to invest in your future. Energy efficient upgrades will add value to your home as well as save you money on water and electricity. Eating healthy will keep you alive long enough to actually reap the benefits of your investments. And occasionally enjoying your appreciating collectable will bring you the gift of immediate happiness in the here and now. What are you waiting for, start spending and start saving.
About the Author:
Juan Pablo Hernandez is a story teller and a learner. He loves Boise. Hates tinkering with his car (unless it works). Despises bottle necks. Hearts going fast. Aspires to punch a great white right in the mouth. Yearns for a Ferrari which he can drive the absolute wheels off. Listen’s to his heart while climbing. And can hear his soul when listening to Lana Rey. He figures if you get up every morning and chase the fox… you just might catch the damn thing one day.