How to Start Spending Less and Saving More

Episode 6

In today’s episode we discuss the sneaky ways money might be slipping through your fingers—and what you can do to slow the spending and really start saving.

 

Connect with an insurance pro that could save you over $700 a year!

Find a real estate agent to make you more money on the sale of your house.

Use our mortgage payoff calculator to see how fast you can pay off your mortgage.

Show Notes

How to Start Spending Less and Saving More

Any spenders out there?

You are my people. I love spending money—hello Target!—but I also like the feeling of having money saved. You know, after the fact.

Maybe you’re like me.

Or, perhaps you’re not so big on spending money. Maybe you’re one of those crazy—I mean, inspiring—people, like my husband, Winston, who naturally loves to save.

Either way, it stinks when we’re working hard to curb our spending and up our saving but we’re still not quite hitting our goals. Have you been there before? I think I know why.

In today’s episode we discuss the sneaky ways money might be slipping through your fingers—and what you can do to slow the spending and really start saving.

Spending a Little Bit of Money Here and There Adds Up

We talk a lot about taking control of your money so you can create a life you love. And most of the time, we focus on how big money decisions can make or break your financial future. Stuff like:

And this stuff—the big stuff—matters. It totally matters.

But if we’re not careful, we can miss all the little opportunities to evaluate our spending and save big over the course of our lives. Because the truth is, if we want to think big when it comes to saving money, we need to think big picture not just big decisions.

So, in today’s episode, we take a hard look at expenses we consider normal and talk about ways to save.

Real Life With Rachel

But before we do all that, I have a confession to make. Are you ready?

I once spent $131.09 on a fitness app. It was well-intentioned, I promise!

Here’s what happened: This past January, I decided it was time to start working out again. A blogger I follow recommended a fitness app, so I checked it out and saw they were offering a deal on a year-long commitment. I love a good deal, don’t you?

So I signed up. Imagine my surprise when a few weeks later Winston showed me the bill for my already-forgotten exercise program. They’d charged me for a full year up front! Yikes.

I definitely had to move some things around in my EveryDollar budget that month. Dang you, fitness app!

Learn from my mistake, you guys. Read the fine print.

Challenge: Stop Wasteful Spending

I tried just about everything to cancel the fitness app and get some of my money back, but no luck. It haunts me to this day. Especially since I only used it maybe twice.

But it made me think: There’s got to be a subscription out there that I CAN drop to stop some of my wasteful spending.

Sure enough, I realized I was paying $2.99 for iCloud storage I never use. Goodbye, iCloud. Hello, an extra $2.99 a month.

What about you? Want to join me in completing this challenge? Take a look at your apps and streaming services. Do you watch shows on every option you pay for or do you tend to stick to one or two favorites? Or maybe you’ll reconsider your gym membership, magazine subscriptions, or Amazon Prime benefits.

Bottom line: If you use it and can afford it, great! If not, drop the subscription and put your money toward a better purpose.

Give Yourself Permission to Spend With EveryDollar

You might be thinking, How do I know what I can afford? Great question!

I stay on top of my spending by creating a monthly budget. And before you turn your nose up at the dreaded B-word, know that a budget is just a plan for your money. It puts you in control. That means you get to decide, up front and on purpose, how you’ll spend your hard-earned cash.

My favorite way to budget? The EveryDollar app, hands-down. You guys, it’s so easy. You can create your budget in just a few minutes, and then you’ll know exactly how much you have to spend on groceries, restaurants, clothes, entertainment and everything else.

And, as the month moves on, you can keep track of your expenses and make adjustments to your budget right there in the app. An EveryDollar budget gives you permission to spend. Can I get an amen?

How Much Do You Really Know About Your Spending Habits?

Before we can start saving more, we need to take a closer look at our spending habits. When we know where we’re spending money and how much we’re spending, it can help us figure out if we’re spending more than we need to. And that’s money that could be saved!

In today’s episode we have some fun asking folks on the street about the nitty-gritty aspects of expenses. Tune in for their answers to questions like:

  1. Are you paying for subscriptions you don’t use?
  2. What’s your car insurance premium?
  3. How much do you think the average American pays in overdraft fees a year?
  4. Do you ever go over on your cell phone bill?

How to Reduce Your Expenses

Whether I’m talking with folks after a live event or with my closest friends, it seems like there are a few key areas where overspending happens the most.

With just a little bit of information and action, you can cut needless spending in the following categories:

Subscriptions

Want an easy pay increase? Cancel subscriptions you aren’t using. And don’t fall for the discount-to-stick-around trick. Nope. Say goodbye to monthly fees and hello to more money in your pocket. If you haven’t used the app or service in the last three months, cancel the subscription and get some money back in your budget.

Car Insurance

So many people just set it and forget it when it comes to their car insurance. And it’s costing them . . . BIG time! Stop paying more than you have to. Get a quote to see if there’s a lower rate available. If you’re not sure where to start, check out our recommended insurance professionals. On average, they help their clients save over $700 a year.

Billy even wrote in and said, “Thanks to our Endorsed Local Provider, Jayna! She saved us $2,400 a year on auto insurance and $350 a year on homeowner’s.”

If you’re looking for a quick way to save, get a quote today!

Overdraft Fees

Did you know the average person pays $225 a year in overdraft fees?(1) You guys! That’s like me handing a couple of hundred-dollar bills to my toddler and letting her loose on the playground. There’s a better and easier way to keep that hard-earned money! Create a zero-based budget in EveryDollar and make your money go further!

Of course, you can also avoid overdraft fees by paying with cash instead of your debit card. Use envelopes or clips to hold cash for categories you tend to overspend in—like groceries, restaurants or clothes—and commit to spending only that money on those items each month. When the cash is gone, it’s gone!

Cell Phone Bill

I hate to have to say this, but we should all be sure to check and double-check our cell phone bills each month. Because hidden fees and random charges happen. If you find one, give your provider a call. Ask for an explanation and, if necessary, a refund.

Another easy way to save is to pay attention to your data usage. Are you going over every month? Maybe you need to upgrade your data allowance, consider a family plan (even with your friends!), or cut back your time online.

And lastly, fellow technology-lovers: Don’t give in to iPhone envy. It’s real, you guys. If you can’t afford the latest and greatest phone, for the love, don’t buy it! Love your iPhone, not theirs.

What do you say? Let’s all work to stop wasting money and focus on creating a life we love!

MAKE SURE YOUR FAMILY IS TAKEN CARE OF AND

GET A QUOTE WITH ZANDER

 

Easy Hacks for Saving Money on the Go!

Of course, to really get the best bang for our buck, we have to focus on both spending and saving. So, on today’s show, I also share a few of my favorite tips for saving money when you’re on the go doing things like:

  • Grocery shopping
  • Making a Target run
  • Having fun

Do you have creative ways you save on groceries, target runs and entertainment? I want to hear them! Join our Facebook community and share them with us!

Paying Off Your Home Early Is the Opposite of Spending Money

Okay, sure, you have to send in those checks to your mortgage lender. But, you guys, when you pay off your home early, you open yourself up to actually keeping MORE of that money for yourself!

Let’s look at some numbers together:

  • The average mortgage payment in America is $1,030.(2) If you invested that money instead of sending it to the bank for 15 years, you’d have $475,000!
  • If you have a 30-year mortgage and make just one extra payment every three months, you could pay your home off 11 years early!
  • The average price of a home in America is $268,500.(3) If you chose a 15-year mortgage instead of a 30-year mortgage at the current interest rate of 4.5%, you would save $120,000—on the same house!

I hope those numbers got your gears turning! When it comes to home mortgages, our goal should be to keep as much of our money as possible, right?

Feel free to play around with the math yourself. Maybe you’d like to see your options when it comes to buying a home, or perhaps you want to see what it would take to pay your home off early. Give our a try!

If you’re feeling like you’re in over your head with your mortgage, consider selling your current home and downsizing to a more affordable place. Give yourself a head start by contacting one of our real estate Endorsed Local Providers. On average, these agents help sellers earn nearly $5,000 more!

How One Woman Cut Her Mortgage Length in Half

If the above examples still sound more like a fantasy than a possibility, stay with me.

We’ve got an awesome guest named Cole with us on the show today. She’s a 35-year-old, soon-to-be mom with a paid-for house. Wow.

Cole bought her house in 2005 when she was a senior in college. She did what lots of people do: offered a small down payment, got a 30-year loan, and moved on with her life.

Seven years later, she decided to refinance. You g

Read the full transcript

– On today’s show, we’re talking about common things that people are overspending on and don’t even realize it, like this little guy! We all have one of these, but do you know how much this thing is actually costing you? Well, hey you guys. I am so excited about today’s show. You know that my message in my heart is all about getting you guys on a budget, being intentional with your money, getting out of debt, saving up for an emergency fund, investing it for the future, all of the above, right? Like, really big things. But what we have to stop and realize, is that in order to make those big things happen, the decisions we make day-to-day can really affect our outcome. And so the small decisions that we probably sometimes waste money on, mm-hmm, can affect the outcome. I’m like, it’s crazy how many small things that we just waste money on that we don’t even realize. I was even just doing our EveryDollar budget last month, and I have this line item for subscriptions, and like, we’ll put our Netflix subscription in there, and all this, and I’m paying $2.99 for iCloud that I don’t even use. Like,I haven’t used this iCloud for my pictures in like, six months. Like, I transferred to Dropbox, I don’t use it, and I’ve not canceled it, and every month, Winston’s like, “Babe, you need to cancel it. “Like, it’s $2.99, and we’re not using it.” I’m like, “I know, I know, “I just haven’t gotten around to it.” And I realized, ah, that $2.00, even though it’s just three bucks a month, little things like that, over time, they really do add up. And like, let’s not even talk about Amazon. I mean, uh. I love technology, like, I really do. Like, our iPhones, and how convenient everything is. It’s great, I bought travel contact solution just yesterday off Amazon. It was wonderful. I don’t have to go to Target and go. I can just go on Amazon. But we have to be careful because we can get lost in the black hole of technology and think, “Oh well, it’s just not that big of a deal,” but again, those little purchases really add up. And that made me think of the most recent money mistake that I made. All right, let me take you back to January 2018. I was making my New Year’s resolutions, like everyone in America does. And I said, “You know what? “I’m going to start working out again. “I’m gonna start, you know, really …” I was actually honestly, just feeling so like, ugh. Caroline was like six months old. I was so tired. Every time on the monitor, she would cry in the mornings. I was like, dragging myself out of bed, and I was like, “I just, I need to be energized. “And I remember when I used to work out, “I’m like, oh, I had so much energy. “I was up at four a.m., and I drank coffee, “and I worked out, I was like, this is great.” So I decided I’m going to start that. I’m gonna get up, and I’m gonna start working out. And so, this blogger I follow was talking about this app where she looked great, she had all this energy, and I was like, “I need what you have.” So she keeps talking about this dang app, and I was like, “This is gonna solve my problem. “I just need this app.” Well, I went to purchase this app, and it said that you get a better deal if you buy like a yearlong membership, versus paying for the app month-to-month. And you know me, I like a good deal. I saw saving money, and I thought, “Well, that’s smart, sure, why not?” So I clicked on it, thinking in my head that I was gonna pay a smaller fee month-to-month. I did not realize that it was going to charge me the whole thing right then. So I go about my day, you know, thinking about, you know, all the workouts that this app that I bought, not knowing that you can have free apps that give you this information, but I was like, “I’m gonna be so great and so happy and so energized.” Well, our iTunes bill came through the email, and Winston was like, “Who spent $131.09?” And I thought, “That’s crazy!” “Who did, I don’t know.” And I looked and saw it was that dang app that I bought, and this is in February, and I was like, “Oh, I didn’t realize it was gonna “charge me the whole thing.” And Winston was like, “Well, I mean it’s fine. “Like, are you using it?” No I wasn’t. I opened that app about two times, and I didn’t use it. Guys, guys, read the Terms of Agreements. I tried to cancel the app, no-go, definitely no-go. So the app is still on my phone, haunts me to this day, just the conviction that like, tears through that iPhone every time I open it. Man, am I still working out? No, absolutely not. So in all things, just a bad cycle. Man, $131, you guys, that’s a lot of money! Gone ’cause I didn’t read the fine print. Small decisions can affect your future. That coulda been a dank date night that Winston and I woulda gone on. But I know I’m not the only one that has wasted money or overspent some money. So my team and I decided to go out on the streets and figure out what you guys are overspending and wasting your money on.

– Yes, I definitely pay for subscriptions I don’t use.

– I was paying for Hulu after the free trial.

– I was paying for Ipsy, and I wasn’t using it.

– Planet Fitness, yeah.

– Okay, subscriptions, yes. Gosh, a great way to save money is to go in, take time, and cancel your memberships or subscriptions that you’re not using. Now, some places are going to pressure you into like, giving you a great deal not to cancel, or they’re gonna bug you to stay signed up, but don’t fall for it, okay, don’t fall for it. Cancel those subscriptions, and save that money. And something else that you may not realize you’re overspending money on is insurance, specifically car insurance.

– Do not know what my car insurance premium is, no.

– I have no clue what my insurance premium is.

– I don’t know what my car insurance premium is. It’s automatically drafted out of my account.

– I’ve never shopped for better insurance rates. It is what it is, like, I just haven’t.

– I have never shopped for car insurance premiums, or you know, like, price-compared or anything.

– The last time I shopped for better insurance rates was last Tuesday after never.

– Tuesday after never. I can appreciate that. Yet see, a lot of people, maybe even you are spending more on insurance than you need to. ‘Cause listen, it’s so normal just to set it and just pay it. So I don’t want you to settle for just the same rate every year. Really, shop around you guys, and get the best rate. I actually have a list of recommended pros on my website. They’ll work right beside you to get you the best rates and coverage to fit your family’s needs every year. I mean, some people I know have saved up to thousands of dollars doing this, so make sure to check it out. And something else that we waste money on: overdraft fees. Some of you, guilty as charged.

– Yes, I’ve overdrawn my bank account.

– I overdraft my account all the time.

– I’ve overdrawn $300.

– I remember once I overdrew a thousand bucks.

– Overdraft fees, guilty as charged as well. Yes, back in the day one of my famous stories is that I wrote checks, back in the day, when you can write checks, and bounced like three checks and overdraft. It was just terrible. So I know the feeling, but listen, if you get it under control, you don’t have to be like the average person that pays $225 a year in overdraft fees. You guys, don’t do it, don’t do it. Stick to a budget, and use EveryDollar. I know I talk about EveryDollar all the time on here, but seriously, get on a budget ’cause this is gonna help you give every single dollar a name. You know where all you of your money’s going so you’re not having to depend on just, “Oh, I hope that I don’t overdraft.” No, no, no, you’re keeping up with everything. And those of you that aren’t used to budgeting or overdraft a lot, use the envelope system. I always like to say the clip system, where you go and you take categories in your budget that you tend to overspend on, so for a lot of people that’s like, groceries, that’s restaurants, that’s clothes, any place that you overspend on, cash out the category, and say, “Okay, I’m gonna spend X amount this month on groceries.” Cash that out, and get an envelope, and write, “Food” on the front, and stick that money in there. Or get a clip and clip that money together, so you know this is just my money for food. And this really, really will help you not only stay on budget, but not to have those messy overdraft fees that you’re wasting $225 on a year, on average, no. Now, something else we usually waste money on is our cell phones. Mmm, a love-hate relationship with the cell phone, but it is true, a lot of us overspend on our cell phones.

– The one thing I do go over on my cell phone bill is the data charges.

– Yes, I go over on my data.

– I do go over, I go over my data.

– I used to go over on my cell phone bill whenever I had a restricted data plan.

– Oh, cell phones. Overspending is so easy! Okay, a couple of things to help you not overspend on your cell phone. Number one: look at your cell phone bill! It’s amazing when you look at all the itemized things, you may see, “Oh, they charged me like, “four extra fees here.” You can call, get your money back. And actually looking at your bill, be like these people over here, where you’re like, “Oh, I’m overspending on my data so much, “and they’re charging me all of this. “Maybe I should switch plans altogether, and get unlimited data versus not, and looking at it all. But looking at your bill is key. Also something that you can do is actually get on a family plan with your friends. That’s right, mi familia, mi amigos, we’re all one, right? Now, if you do this, you have to make sure that they are friends that you trust and that are responsible, okay? Don’t go get all your friends that are crazy with their money and be like, “Yeah, let’s just share a cell phone plan,” and then you end up spending more money. No, no, no, responsible friends only if you want to do it. And last but not least, a way not to overspend is don’t always feel like you have to have the brand new cell phone, okay? Love your cell phone, not theirs. Cell phone envy is a real thing, and certain companies like, launch their big new phone, and it’s like, “Oh my gosh, I can’t wait to see.” And yes, does it have a better camera? Sure. Does it have a better screen? Yeah. Does it have a better operating system? Sure. Don’t know what an operating system really is, but sure, I bet it’s better, right? It’s a better phone, I get it. But if you don’t have the money, don’t buy it. So bottom line is, if the budget doesn’t allow it, don’t buy it. Guys, let’s be real. Being a parent is hard work. Now that I have two daughters of my own, it feels like the to-do list never ends. And as every parent knows, your priorities change, and you have to make important decisions for your child’s future. That’s why term life insurance is a must for every parent. It’s so easy to get, and it’s affordable. What you’re looking for is 10 to 12 times your annual income to make sure everyone in your family’s taken care of. Winston and I use Zander Insurance. They do all the work for you to find the best prices and options. So go to Zander.com to get started on a quote today because that’s who we trust to take care of our family. For all you shoppers on the go, here are a few shopping tips that you need to have. I figured I’d start here at the grocery store because it’s the biggest budget buster that we have! Guys, we talk about this a million times. So number one, when you’re grocery shopping, make a list, and stick to it. And if you go to places like Kroger here, you can actually use Kroger ClickList, and it’s great ’cause you make your list online, you can see your total, and it’s usually worth the small fee for them to shop for you, it’s fantastic. Number two, making it easy’s great because on average, a recent study shows that you spend $2.71 every minute you’re in the store. So get in, and get out. And number three, make dinner simple. You guys, it’s summer. Who has time to cook a big meal anyways? So do a BLT, a salad, or breakfast for dinner. Make it easy. And another shopping tip on the go is for all you Target-lovers out there. Yes, I’m here at my mother ship. Okay, number one is to make sure to get the Cartwheel app. This is like a whole new way of couponing. You can see the great deals going on at Target. And number two, get the Target Red Card. This is not a credit card. It is Target’s debit card, and it’s amazing. My sweet mother actually is so scared to get this because she thinks it’s a credit card, and it’s not. It’s a debit card, and you get 5% off, and free shipping, which we all love. Go into Target, and only get what you need. Yes, only get what you need, okay? It’s a black hole of goodness, we all know that. You go in for mascara, and you end up spending like 150 bucks, okay? So just make sure you go in and get exactly what you need. And these tips really can be for any store ’cause there’s a lot of stores out there that feel like a black hole. So we want to have fun this summer, so number one, date nights. You can do this really inexpensively. Winston and I, we love going to happy hour because everything’s half-off, from the appetizers and all. Or you can even go to Sam’s or Costco if you think ahead of time, and you can actually get gift cards cheap for restaurants. It’s amazing. Or even just go get dessert somewhere, but you can get out together inexpensively. Number two, your local library. It has air conditioning, which is amazing, a relief from the hot summer weather, but also, you can rent more than just library books. You can do movies, it’s a whole experience. And last, but not least, your local drive-in. Okay, it’s not really local where I live, so you have to drive, like, an hour, but you guys, this is so fun. You get to watch a movie, even two movies for the price of one, and the food there is usually really cheap. So you get this whole experience of a drive-in. It’s like you’re going back in time, it’s wonderful. And those are my summer money-saving tips on the go. So let’s head back to the studio. Another place that people are losing money that you may not even think about is when it comes to your mortgage. Yes people, it’s so normal just to get a 30-year mortgage and go about your day, and not even think about it. Do you know how much money you’re wasting, when it comes to payments and interest, and all of that, versus getting a 15-year? So what I did is I went into my Facebook group, and I asked some of you questions, and in my YouTube community because I wanted to test your smarts when it comes to paying your house off early. And it was very interesting. So, according to the Census Bureau, the average mortgage payment is $1,030. Now, if you invested that money instead of paying it to the bank, how much could you have in 15 years? Let’s see what you said. Oh interesting, 34% of you got it right! The correct answer is $475,000. Mm-hmm, you heard me right, almost half a million dollars, you guys! If you didn’t have a mortgage payment, and you invested that, half a million dollars, amazing. All right, next question is, if you had a 30-year mortgage, but made one extra mortgage payment every three months, how much earlier could you have a paid-for house? All right, this one was a little bit trickier, but most of you thought the answer was five years, but it’s actually 11 years, yeah, 11 years. That’s the difference of looking like this when you have a paid-for house, or looking like this. If paying an extra full mortgage payment doesn’t work in your budget, then just simply switch to paying half of your mortgage bill every two weeks, instead of just once a month, and you could still pay off your home eight years faster. Isn’t that crazy? All right, final question is, the average price of a home in America is $268,500. Now, if you had a 15-year, instead of a 30-year mortgage, at the current interest rate, that’s 4.5%, which of these things could you buy with the money that you would’ve saved? A. A designer handbag every six months for 30 years? B. A nice beach vacation for your family for the next 30 years? Or C. A water jet pack? Let’s see. Oh, everyone got this one right. Yep, the answer is any of these! Yes, if you just got a 15-year instead of a 30-year, you would’ve saved