For someone who’s planning to retire really
Figure out what’s the least you need something to do, then get the cheapest thing that satisfies all criteria.
Example 1
For example: when I moved to China, I had to sell my bike in London, and what a beautiful bike it was. I wanted a new bike and I need it to have these things at the least:
- Working brakes
- I can sit and pedal without risk of injury
- Somewhere to attach carriers
I could have easily purchased a great new bike here for under $150 (3% of my monthly salary), but instead, I used an old bike that a different teacher left behind. There were a lot of things wrong with this bike: the handlebar was literally loose, the front brake didn’t work, the basket is super dented, the chain was mostly rust, and the ‘license plate’ read “BS”. But, with a $10 trip to the bike shop, it managed to fit all the criteria.
Looking beautiful was not one of the items on the criteria list, so it didn’t factor into my decision. Bonus: the bike had rear seats AND a basket! I saved over 90%.
Example 2
When I first started working I found I needed a bigger pencil case. The reason was, as a math teacher, I required a calculator to be on hand at all times. I wanted it to do two things:
- Fit my calculator
- Fit three pens and an eraser
The cheapest item that fit the criteria? A used plastic container from a pre-made dinner. Because it was free (aside from my initial purchase of it for food), it’s infinity savings. It definitely doesn’t last as long but when it finally cracked I just replaced it with another free plastic container.
Example 3
I once spent an extra $50 on a microwave because it had more defrost and warming options over the next cheapest model. I have used the functions 0 times because I didn’t care enough, so really I might as well have set $50 on fire.
This taught me that if I buy more than I need, I won’t always get the best use out of it. If I needed the additional functions I would have added it to the list.
These three examples are relatively small but realize that you and I make a lot of purchasing decisions, and the bigger the purchase, the better this method works. These are some of my saves from this past year:
- $500: staycation in the UK vs. another skiing trip
- $200: picking vacation activities that don’t require money
- $300: bought my camera and another lens second-hand, and a cheap balancer.
- $360: stopped ordering salads and just cooked for myself
- $100: bought a no-name hiking backpack
- $100: didn’t buy a rice cooker or microwave, a pot can do both’s jobs with a bit more effort
- $140: no new bike
- $50: no new stationery, I just use whatever the school provides
- $100: chose not to buy lamps for my dark living room and just turn on all the lights in the house to compensate.
- $480: hosted dinner parties at my place instead of going out to eat (as a result of the London finance review).
- $80: brought one less suitcase of stuff to China and avoided luggage fees. I don’t miss it.
Total: $2330
I will use that $2330 this year either in my investments or fund a month-long backpacking trip in July. I’m sure you have goals that can use a $2k boost.
This tip won’t help you if you think everything is a necessary purchase. If you’re buying things left and right and justifying it however you wish, you need to ask yourself if the things you’re buying bring you true happiness or if they’re just a way to dull the pain of living an unhappy life.
*Mostly because I live very cheaply in China. I estimate that my living costs for 10 months can be covered by 1 month’s worth of salary. Hmm, might be a fun project to do for April, track my total living expenses.