Ppl in high cost states - How do you save money?
I'm in CT now, really my only complaint is the cost. But generally, no wildfires, earthquakes, droughts, hurricanes, gators, endless mosquitos, flooding, tornadoes, extreme temperatures, etc., so it's nice because there's not really any major natural disasters that happen in a big way here. Anyway, two big things are food & entertainment bills. Cut cable & went to Netflix, that saved like $150/mo. Also started cooking way more at home (yay appliances) & recently got a deep freezer to buy food in bulk from Sam's/Costco/BJ's/local grocery sales. It's crazy because your food bill can vary from hundreds to thousands a month depending on how you eat.
If you haven't done it already, start tracking every penny you spend - guessing is useless, you need to know exactly where your money goes, and you do that by tracking everything 100% for awhile. Just a simple gDocs spreadsheet, one worksheet per month, do it for 3 months. Optionally use Mint or another tool if you want to auto-categorize, but as you spend & then look at the numbers & lump them into what groups you're spending on, you'll start to see where you can save money. One rule I have is cash or bust. Only exceptions for debt are a reasonable house, reasonable car, and education/training for job (i.e. college). I've mentioned in another thread we basically do a weekly allowance. Paychecks go to bank, bank auto-pays bills, his & hers reloadable AMEX Serve cards with weekly auto-transfers for set amounts, plus a small $1k credit card for gas (due to the $150 hold they put on these days) & emergencies, which gets auto-paid off monthly. Rent, car, school debt is OK, everything else we save up for & pay cash, no credit or loans. It's limiting in some ways because you don't get instant gratification unless you have savings, but it's also nice to know you own what you own. Plus once you get into the habit of saving up, it's pretty easy...tuck $20 a week away into something like Smartypig & boom, every 2 years you can buy a new $2,000 computer. Then you don't have to shell out $2k up front, unless you're ballin', then it doesn't matter haha.
Being able to afford living in an expensive state is more about where you put your money than how much you make, at least up to a certain point (obviously on poverty level, there's only so much you can manage because the available fundage pool is smaller). I have friends who drink $100 away every weekend, complain about never having any money, but aren't willing to change. I have friends who chain smoke; I think pack minimums are $9 or $10 each (at least) in CT. Those habits can be $300, $400, $500 a month easily. Going out to eat is a huge money drain, even if it's just fast-food - it adds up pretty quickly. More for girls, but shopping addictions are huge. Retail therapy, especially on credit, can really kill your budget (or, uh, Amazon Prime...lol).
Bigger picture, a good starter book is Rich Dad, Poor Dad. The main takeaway is understanding what income, assets, expenses, and liabilities truly are. A house is a liability because it costs you money every month to own & operate (house = liability is a principle a lot of people have a
really hard time grasping). Most people don't have any real assets (i.e. things that put money in your pocket every month, other than a job paycheck). Stuff like that. Another good thing to look into is
FI/ER, not so much for early retirement as much as just getting your financial picture organized & planning ahead into the future.
So other than cutting costs, automating things as mentioned above is another good trick. Spend less than you earn, which you do by tracking every little thing for a few months to get a clear picture, setting limits for yourself (ex. allowance on a separate card), setting rules for yourself (ex. anything that isn't a house/car/school is cash-only, not to be spread out over months on a credit card). I mean, everyone has a different approach, this is just one way, but I like being nearly completely hands-off thanks to the system automation. Never really have to think about it, just a few minutes a week to make sure everything is kosher. Obviously you can get into investments, churning, side jobs, all kinds of stuff, just depends on where you want to put your money & your time.
But anyway, TL;DR: for me, cut entertainment & food costs. Track what you spend so you know what you spend down to the last penny, automate the system, spend less than you make. Regular house/car/schooling debt is OK; everything else is cash-only (from savings or from saving up). I'm not living a life of luxury by any means, but I've got a decent place to live, nice TV, good food, etc. Have to work for a living, but that's life eh?
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