I’ve been working recently to increase my savings rate.
A few years ago, I was saving on average about 25% of my income.
Which is good, but I knew I could better.
I’d been reading books and listening to tons of podcasts about personal finance and the FIRE movement, and figured some of the principles would be easy enough to adopt.
As I adopted more frugal living principles, I started coming up with my own that just made good sense.
On average right now, I’m saving 42% of my take home pay, and every now and then, incorporating a no-spend month where I can hit ~65% savings rate.
Now it’s important to recognize that these numbers won’t be attainable for everyone and for others they’ll be fairly easy to surpass. There are a lot of factors at play like your salary and your city’s cost of living. The idea here though is you compete against yourself to see how high you can get that number.
As you challenge yourself to increase your savings rate, you’ll find it helpful to adopt some new ways of thinking. Here are the mindsets I’ve adopted over the last few years that will help you live a little more frugally and put more money in the bank.I promise!
Classic over trendy
Have you noticed everything we buy now follows trends?
Very few consumer goods don’t.
An obvious one is fashion. But similar things can be said for furniture, home decor, and technology.
Heck – I’m a proud plant mama and I’ve even noticed plants come in and out of style!
Let’s look deeper at our fashion example. Where there used to be 4 seasons in fashion each year, the fast fashion industry now has 52 – a new season every week. All in an effort to make you feel like you’re out of style so that you’re constantly updating your wardrobe and forking over more of your hard-earned moola.
And we buy into it!
When we buy things that are “on trend” this season, we’re buying an item with an expiry date. Even if we keep the item past its expiry date in your closet, the odds of you wearing it are slim. Just like the expired food in our fridge that sits at the back untouched.
Instead, look for items that are classic.
The styles that have been around for years are the ones that likely aren’t going anywhere anytime soon. Skinny jeans, a white button up, little black dress, leggings, flannel shirts.
These items are classic and evergreen in your closet. You’ll be able to hold onto them for years and are generally versatile enough to create different looks as your tastes change.
Like my favorite style icon, Tan France, says, “Fashion changes season to season. I don’t give a crap about fashion. I care about style.”
Adopted this mentality in different areas of your life. You might not be the most fashion forward person in the room, but if you curate carefully you’ll look great, your style will be timeless, and your wallet will thank you.
Investment pieces
Some things are worth buying high quality.
Others aren’t.
And it’s about knowing the difference.
Let’s go back to the fashion example above.
I’m ashamed to admit I definitely buy fast fashion every now and then. On occasion, if there’s a trend I really like I’ll buy into it. But I’ll find the piece as inexpensively as I can, because I know I’ll only get one to two seasons of wear.
For everything else, I try to spend a little bit more to buy investment pieces. If I know the thing I’m buying is classic then I know I’ll have it for a while and I’ll want it to stand up to wear and the washing machine.
Items that aren’t used, but rather are there for asthetics, like home decor for example, can generally be bought cheaper. They won’t endure wear and tear and they don’t need to be functional. They can be made from cheaper material, as long as they look good.
Keep this principle in mind to spend your money where it counts.
Experiences over things
Hopefully this one isn’t new to you.
Read any article or watch any documentary about achieving happiness and you’ll hear that happiness that comes with a new purchase is fleeting. You’ll get a quick rush of endorphins but within days, the excitement that came with you owning that new thing wears off and you run back out to the store for your next hit.
You’re going to spend some fun money, so put it to good use and spend your money on experiences. Something like travel or a novel activity with friends.
Next time you’re in need of a hit of endorphins, go find a free or cheap activity to do with friends instead of heading to the mall or to amazon.
Not only are you creating memories that will last a lifetime, but you’ll save money when you shift your mindset away from things and towards experiences and relationships.
The 48hr rule
Have you heard the rule of thumb to help curb impulse purchases?
If you see something you want in the store or online, make yourself wait 48hours before you buy it.
This one has been tremendously helpful for me.
Let . me . tell . you!
The first year or so that I followed this rule, I was surprised to find that usually after a day or so I realized I didn’t really want the item that bad. More often than that even, I completely forgot it existed. Only about 5% of the time did I actually go back to purchase it.
My favorite part? I don’t need the rule anymore.
Now when I’m shopping, I’ve gotten pretty good about knowing which items will past the 48hr test. Most of the time I say, “You know what. I don’t need this.” I walk away without a second thought. On the rare occasion where I have found something great, I just know – yes, this one I really love and/or will get tons of use out of.
The point is to get mindful about your purchases, esp when you’re the shop-a-holic type like me. This rule will help you get there.
Make it yourself
Generally, we buy things because we either don’t know how to make it ourselves, don’t have the means necessary, or we can and we’re paying for the labour for someone else to make it.
I’ve adopted the mentality that if I can do a decent job making something myself, have reasonable access to materials needed, and it doesn’t take too long, I’ll use my own labour. Of course this saves me money, but it also makes me appreciate things more than I would had I purchased them.
A good example of this would be our kitchen table. Had we bought a table similar to ours from a furniture store in the city, we would have been paying somewhere around $800. Tables are pretty simple though, and we knew it was something we could do ourselves. We ended up making one for about $400.
We’d go over to my partner’s parent’s house to make it (we didn’t have the outdoor space) which meant more time spent with them. To top it off, it’s an experience that my partner and I will cherish forever (see #2).
I also take this approach with a lot of my beauty and personal care products. Again, most of what you’re paying for is labour, packaging, and shipping, Things I don’t need to be paying for. I make most of my own products now from a handful of simple ingredients. They work well enough, and I save hundreds of dollars a month now that I was spending at the drugstore.
If you’re even the teensiest bit crafty, you’ll also find that making stuff yourself becomes a hobby. That’s how we spend a lot of our Saturday’s and Sunday’s now, which also means we’re not out doing expensive activities around the city.
Fix things, don’t replace them
In North America, we’re way too comfortable replacing something the minute it’s no longer in optimal condition.
Our grandparents’ generation got it. They’d mend things, repaint them, replace a part.
We need to adopt that mentality.
I used to be really bad about this.
I had a few terracotta plant pots, for example, that were covered it white calcium deposits. I allllmost threw them out. Luckily I came to my senses before I had a chance and found tips online to get them clean using vinegar.
Over the years, we’ve also collected a lot of hand-me-downs from grandparents. Furniture, table lamps, artwork. Most of it doesn’t entirely match our style. Rather than toss it in the trash though, I give it a coat of paint. This brings new life to old pieces and only costs $8 for a can of spray paint.
Everything’s a work in progress
This has been the hardest mindset for me to adopt but I think it has a lot of value.
As soon as we start making a little money in our careers, it’s really common to feel like we can afford to have nicer things. We start the inevitable process of replacing hand-me-downs and imperfect items with new things that better suit us.
It’s as if as soon as we have a steady salary, the game of “what do we replace next ?” starts and it doesn’t stop until you die.
I’ve gone through this process with the contents of my kitchen, with my furniture, with my clothing, etc. You can spend thousands of dollars doing this though, and there is good reason to hold off.
More recently, I’ve waited to purchase a number of things I “needed,” and in the mean time I’ve been offered a hand-me-down version that was perfectly good.
I held off on buying a coffee maker for example and inherited one from my partner’s grandmother.
I held off on buying nice beer glasses and adopted my brother’s after he got a new set for Christmas.
I held off on buying a computer monitor even and adopted one from my parents.
You see – everyone else is participating in the game of, “what do we replace next” and as a result, tons of great very gently used stuff comes up for grabs on the regular.
If not handed down from someone else. A lot of these things could also make great gifts for you if you just hold off. We’ve needed knives, dishes, and a kettle in the past and have received each as a gift that we now get tons of use out of.
That’s it!
Adopt these habits one or two at a time. They’ll make such a difference in your life that you’ll quickly start looking for even more tips like this. There have honestly had the most positive impact in increasing our savings rate and because of that, we’re well on our way to living the quiet country life we’ve been dreaming of.