Personal Finance

9 Ways to Save Money You Have Probably Never Tried

Expertise: Landlording & Rental Properties, Real Estate News & Commentary, Personal Finance, Real Estate Investing Basics
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You know all the common savings tips: cut the cord on cable and your landline phone, pack your own lunch for work, stop buying $5 Starbucks lattes, quit smoking, have your spouse cut your hair.

All good advice worth taking. But if you’ve heard it before, you’re either already following it, or choosing not to do so. So what else can you do to save money, beyond the easy and the obvious?

Try the following ideas to move the needle on your savings. They aren’t necessarily easy—but they can save you thousands of dollars a years, and in some cases thousands every month.

1. Move Overseas

You can live a better quality of life overseas for a fraction of the cost of living. I know, because I do it.

The thought never even occurs to the average American, but today most knowledge workers can telecommute. That means they can live and work from anywhere in the world, no longer shackled to the high-cost-of-living city where their employer is based.

My wife and I live entirely on her teacher’s salary, funneling all of my income into investments. Investments that generate passive income, helping us near financial freedom in our 30s.

Meanwhile, we visit an average of ten countries a year. Or at least we did, before the coronavirus pandemic temporarily skidded international travel to a halt. We spend several months of the year in the US visiting family, and the rest in South America.

It helps that my wife’s employer provides us with free housing. But even if we had to pay for our own, housing in many parts of the world costs far less than in the US.

2. Score Free Housing with a Live-In Flip

Imagine you buy a fixer-upper that costs you $1,500 per month as a mortgage payment, or $18,000 per year. You spend the next year fixing it up in your spare time, as a fun and profitable hobby. You then sell it for a modest profit of $20,000, giving you effectively free housing for that year.

If you keep the property for at least one year, you pay the lower capital gains tax rate on your profits rather than the full income tax rate. Better yet, live in it for at least two years and you can avoid capital gains taxes on the first $250,000 ($500,000 if you’re married) through the primary residence exclusion.

Known as a live-in flip, this model lets you use owner-occupied financing with a low down payment, and lets you tinker and upgrade the property on your own schedule.

3. House Hack

If you don't like working around the house, you can also score free housing through house hacking.

That could mean the traditional multifamily model of house hacking, of course. Or you could get more creative, and find ways to house hack single-family suburban homes. A few ideas include housemates, renting out storage space, renting out parking (whether for cars, boats, or RVs), setting up a basement- or above-garage apartment, building a detached “granny pod,” or something else entirely.

Because if you want to reach financial freedom in five years or even ten, you need a massive savings rate. Aim to live on half your income at most, and better yet, aim to save and invest 60% or 70% of your income.

That kind of rapid wealth-building leaves no room for “average” or “normal” behavior like blowing 30% of your income on housing.

4. Ditch Your Car

The average car in the US costs $9,282 per year to own and operate. That includes costs such as insurance, maintenance and repairs, fuel, parking, and the car payments themselves.

Once again, it’s hard to achieve a 50%, 60%, or 70%+ savings rate when you’re blowing nearly $10,000 a year on a car.

When I lived in the US, my wife and I each owned a car. Six years ago when we moved overseas, we decided to try out sharing one car between us. It worked just fine, and when we started looking to move to our second country abroad, we bounced around an even more “radical” idea: foregoing a car entirely.

We knew it would require living in a walkable area, and we kept this factor in mind as she interviewed with international schools. Eventually we found a school and city where we could walk or bike to restaurants, grocery stores, bars and cafes, and other amenities. On the rare occasions when we travel further than a couple miles from home, we take an Uber. If we want a long weekend away, we rent a car for the weekend.

I thought I’d feel trapped or isolated without a car. Instead I feel liberated, never having to hassle with parking, car insurance, car accidents, filling up the tank, car washes, or cleaning out the car.

But it requires lifestyle design, choosing a place to live with intentionality.

5. Move to a Lower-Tax County or State

Your savings don’t have to come from simply spending less on lattes and housing. It can also come from saving money on taxes.

State and local governments tax you in many ways, but the three largest include income taxes, property taxes, and sales and excise taxes. To compare apples to apples, you need to take all three into account as the “total tax burden,” as some states charge less of one but more of another.

Seven states charge no income taxes: Alaska, Florida, Nevada, South Dakota, Texas, Washington, and Wyoming. Two more (New Hampshire and Tennessee) don’t tax earned income, but they do tax investment income—an increasing problem, the closer you get to financial independence.

Five states charge no sales tax: Alaska, Delaware, Montana, New Hampshire, and Oregon.

Property taxes are typically set at the local level, but there are still obvious trends between states. Take a look at this interactive map of property taxes by county:

Combining all three tax types, the states with the lowest total tax burden are Alaska, Delaware, Tennessee, Wyoming, and Florida. The highest taxed state (New York) siphons off roughly 2.5 times as much of residents’ income each year as the lowest tax states (Alaska). That comes to a difference of many thousands of dollars a year, which is precisely why so many Americans are moving from high-tax states to lower-tax states.

6. Switch to a High-Deductible Health Plan & HSA

If you’re relatively healthy, there’s no reason to spend top dollar on health insurance. With the money you save on monthly premiums, you can pump it into the nation’s best tax-sheltered account: the HSA.

Health Savings Accounts (HSAs) offer triple tax protection. You can deduct every dollar you contribute in the year when you do so, then the money grows and compounds tax-free, and then you also avoid taxes when you withdraw the money. In other words, you get both the tax advantages of a traditional IRA and a Roth IRA, in one single account.

Instead of losing the money forever by handing it over to a health insurance company, you keep it—and invest it to compound tax-free.

Skeptics say “Yeah, but you have to spend the money on health-related expenses.” To which I reply: “Do you have any doubt that you’ll incur hefty health-related expenses in retirement?”

Consider HSAs a second retirement account, except with better tax benefits. And no need to wait until 59 ½ to withdraw from.

7. Score Free Accommodations While Traveling

No one says you have to blow money at a hotel or Airbnb when you travel.

You can stay for free through home swaps, through petsitting, through housesitting, and a range of other creative ways to score free accommodations when you travel. Yes, it takes a little work up front to learn how to do it. But it can save you thousands of dollars each year on travel.

8. Pay for All Discretionary & Variable Expenses in Cash

Do you know why nearly every retailer in the world accepts credit cards, eating the 2-4% fee charged by your card company?

Because saps like you and me spend more when we swipe plastic rather than counting out cash bills.

If you want to spend less each month on variable expenses like groceries, clothes, coffees, restaurant tabs, happy hours, and so forth, try leaving your credit card locked in a drawer at home. Go on an all-cash budget for all of these variable expenses, and compare your spending at the end of the month to your regular monthly spending. You’ll be amazed at how much more reluctant you’ll be to part with money when you have to count out each bill.

Try the cash envelope budgeting system. Before you complain that it sounds “old fashioned” or “low tech” or “inconvenient,” remember that’s exactly the point: to make your spending more tangible. Which works as a psychological trick to help you manage your budget like an adult rather than a teenager with her daddy’s credit card.

9. Eliminate PMI

Private mortgage insurance (PMI) can cost you over a thousand dollars each year, yet does nothing for you. It protects your mortgage lender, not you.

Consider paying down your mortgage to 80% of your home value, then contacting your lender to remove PMI from your monthly payment. You may well save over $100/month by eliminating PMI alone, which says nothing of the life-of-loan interest savings and the shorter payoff horizon for your mortgage.

Final Thoughts

I got serious about reaching financial independence when I was 37. I hope to reach it by 42, no longer relying on active income to pay my family’s living expenses.

The only reason it’s even a possibility is our extraordinarily high savings rate, which we achieve through many of the tactics above.

It’s neither simple nor easy to build a seven-figure net worth in just a few years. It requires lifestyle design to plan out your ideal life and budget from top to bottom. Most of you won’t seriously consider the “radical” ideas above. And most of you won’t become millionaires within the next five-to-ten years either.

What creative ways are you exploring to save more money and build wealth faster each month?

Join the discussion with a comment below.

G. Brian Davis is a landlord, personal finance expert, and financial independence/retire early (FIRE) enthusiast whose mission is to help everyday people create enough rental income to cover their living expenses. Through his company at SparkRental.com, he offers free rental tools such as a rental income calculator, free landlord software (including a free online rental application and tenant screening), and a free masterclasses on how to reach financial independence within 5 years.
    Cody Barna Real Estate Agent from New Hampshire
    Replied 2 months ago
    Thanks for the great article, I found all of it to be very practical advice.
    G. Brian Davis from Baltimore, MD
    Replied 2 months ago
    Thanks Cody, very glad to hear it!
    Ryan Budil Rental Property Investor from Lee County, FL
    Replied 2 months ago
    I agree with you on point #1. I have been taking advantage of the Foreign Earned Income Tax for over 8 years now. I couple that advantage with buying single family rentals, earning passive income and depreciation at the same time!
    G. Brian Davis from Baltimore, MD
    Replied 2 months ago
    Awesome Ryan! It's a fast track to wealth!
    Joshua King
    Replied 2 months ago
    Great article. I have nice military pension coming my way, but I still want a $1 million dollar dividend account. We household, renting our 2 master bedrooms for $800 each. We also have 2 rental properties. In all we are comfortably putting away $6,000 a month. But are always looking at ways to increase income. Thanks for the great article!
    G. Brian Davis from Baltimore, MD
    Replied 2 months ago
    That's fantastic you're putting away so much each month Joshua! Fast track to freedom.
    Thomas Purcell New to Real Estate from Richmond VA
    Replied 2 months ago
    Interesting article. Reminds me how I never really was enamored with cars.
    G. Brian Davis from Baltimore, MD
    Replied 2 months ago
    People blow a massive amount of money on cars. Escaping that loop is great way to build wealth faster!
    Patrick Britton Appraiser from Ann Arbor, MI
    Replied 2 months ago
    only single people or those wishing to become single will give #2 a serious thought... :)
    G. Brian Davis from Baltimore, MD
    Replied 2 months ago
    Haha, depends on your spouse! And how handy and motivated you are.
    David Schwalm Investor from Austin, Texas
    Replied 2 months ago
    Actually #1 on the list is Don’t Have Children. 😄
    Michael Casile
    Replied 2 months ago
    Very true that children cost a great deal. I paid that cost and am glad I did. I am also, however, glad that folks don't assume that they should have children. It creates some interesting home dynamics when they realize that they were not prepared for the sacrifice. Glad for all who have or don't have children if it was the right decision for them.
    G. Brian Davis from Baltimore, MD
    Replied 2 months ago
    Children do cost a lot, but one way of thinking of that cost is as an investment - as you age, children provide an extra layer of retirement security. I'm already telling my infant daughter as I change her diapers that she'll be returning the favor for me one day!
    Wendi Roudybush
    Replied 2 months ago
    Agreed, though most people want them! Statistically it costs a quarter of a million dollars to raise a kid, not including college, cars or orthodontia. I couldn't have been self employed for 30 years, with a feast or famine income, nor made the investments in property and the time in my career, if I'd had them. Almost 60 now and no regrets!
    K McKenzie
    Replied 2 months ago
    Great ideas, except I disagree with the cash only concept. Use credit cards vs. cash. Pay everything you can with credit cards (improvements on rentals, insurance premiums, utilities, etc.) If you have the right cards you can earn 2-6% cash back on every dollar you spend. Don’t buy things you don’t need-and pay off the cards every month. It’s crazy not to take advantage of “free money” back on things you have to pay for anyway.
    G. Brian Davis from Baltimore, MD
    Replied 2 months ago
    Credit card rewards are great - for those responsible enough to pay off their balance every single month. But many Americans aren't at that level of fiscal responsibility, unfortunately.
    Adam Ulm from Mount Juliet, Tennessee
    Replied about 2 months ago
    Agreed. My wife and I run everything we can through 1 credit card and reap the points. We use the points for travel when we can, but what they're great for is gifts. Instead of using money to buy gifts, we use points or miles as much as possible. The point you made (Brian) about using cash to make it psychologically more difficult to spend is an important one that should not be overlooked. We pay our balances off each month, but we still have to be careful to ask ourselves with each purchase do we really need this, or is trading the money for this now worth what were losing by not investing it? Or is this an investment or an expense? I've just started dipping my feet into the FIRE community, so I was happy to see that we have already or are already doing about half of your 9 points, and am interested in a couple we're not doing. Thanks for a good article Brian. If you have any suggestions on where to start for FIRE, I'd love to hear them!
    Neil Aggarwal Lender from Richardson, TX
    Replied 2 months ago
    People without that level of fiscal responsibility will never reach financial independence anyway.
    James C Marston
    Replied 2 months ago
    I agree with using plastic to get the cash back. The card i use most often not only gives me good cash back, but I can use that cash to get discounted gift cards for places I need to buy things from anyway. The refrigerator in our kitchen was paid for with all rewards money and discounted gift cards. It takes a certain mindset though; I hate using plastic just as much as counting out cash, but most people aren't the same way. (No, I wasn't looking in my wife's direction when I wrote that, and if you say I did I'll deny it to the death! ;)
    Tom J. from Littleton, CO
    Replied 2 months ago
    I like your out of the box approach. 💪
    G. Brian Davis from Baltimore, MD
    Replied 2 months ago
    Thanks Tom, much appreciated!
    Michael Casile
    Replied 2 months ago
    Very good ideas. It does take agreement from a very flexible family ... but they are some innovative ideas.
    G. Brian Davis from Baltimore, MD
    Replied 2 months ago
    Very true - your family must always be on board, or you'll spend all your energy pulling against each other rather than pushing in the same direction.
    Cheri Jones Rental Property Investor from Las Vegas, NV
    Replied 2 months ago
    I retired and moved from California to Las Vegas in 2018. I turned my primary residence into a rental and purchased a condo. I didn't own a car at the time either. I sold the condo in 2020, paid off all my debt and purchased another property where I plan to repeat the process. I love Vegas and the live-in flip strategy!
    G. Brian Davis from Baltimore, MD
    Replied 2 months ago
    That's awesome Cheri, congratulations on the successful retirement!
    Justin Famulari Rental Property Investor from Charleston, SC
    Replied 2 months ago
    Nice article with some good ideas! I’m going to take a look at my own savings rate and attempt to get it up over 50%; I’m currently at 35%
    G. Brian Davis from Baltimore, MD
    Replied 2 months ago
    Thanks Justin! And I love the ambitious goal!
    Rick Grubbs Rental Property Investor from Salisbury, NC
    Replied 2 months ago
    I very much enjoyed your emphasis on frugality as a way of life. It can be just as satisfying to save money as it is to spend money. The single best one line statement I ever heard about money was that the difference between those who are financially successful and those who are not is that unsuccessful people see money as something to spend, while successful people see it as something to save. Also, I would give counterintuitive advice that most would not agree with. As Christians, my wife and I believe what the Bible teaches that in the context of marriage, children are a blessing from God. We allowed Him to bless us with 12 of them! They have not been a financial liability as so many will claim. But as a real estate investor they have been an asset to us. My children all grew up learning a work ethic that says you work for money instead of having it given to you simply for breathing. They start young getting a penny for every cigarette butt they pick up in the parking lot and advance from there. When they leave for college they don't have to get a fast food job, they can put down flooring or have their own painting or landscaping business with the skills they learn while working for me. 3 of our 4 who have left home, already own their own homes and one is already a landlord. Frugality pays off as a lifestyle. It is even more rewarding when it is tied to a higher cause and can be passed on to the next generation!
    G. Brian Davis from Baltimore, MD
    Replied about 2 months ago
    Great point about children Rick! Thinking of kids as financial liabilities is the wrong way of looking at it.
    Brilynn Rakes from Palo Alto, CA
    Replied 2 months ago
    Great article! G Brain Davis, are there any cities in particular in South America that you would recommend?
    G. Brian Davis from Baltimore, MD
    Replied about 2 months ago
    Thanks Brilynn! We haven't done as much travel in South America as we'd have liked, given the pandemic, but check out Santiago. It's affordable, surrounded by wine country and mountains (with skiing), and an hour from the coast and beaches.
    George Lui Investor from Palo Alto, CA
    Replied about 2 months ago
    Thank you! Great article! Also serves as a reminder of all the options we have to save $.
    G. Brian Davis from Baltimore, MD
    Replied about 2 months ago
    Thanks George, glad it was useful for you!
    Andrew Syrios Residential Real Estate Investor from Kansas City, MO
    Replied about 2 months ago
    Great list Brian!
    G. Brian Davis from Baltimore, MD
    Replied about 2 months ago
    Thanks Andrew!
    Kevin McLaughlin from Houston, Texas
    Replied about 2 months ago
    Overall, a good article with some flaws. Most people can't just pick up and move overseas or across the country due to our jobs. And that ignores the cost of the move. Ditch the car is not practical in most of the US. To avoid PMI, you can also split your mortgage. We had an 80% primary mortgage, a 15% secondary and put 5% down. Then we beat the crap out of the secondary loan and paid it off in about 3 years. Well written, though - keep it up!
    G. Brian Davis from Baltimore, MD
    Replied about 2 months ago
    Haha, I never said they were easy!
    Raheel Khawaja New to Real Estate from Houston, TX
    Replied about 2 months ago
    I agree with 8 out of 9 points in the article. Paying with cash vs. the credit card is where my disagreement is. Payment via credit card results in points which can be used for either cash back or travel. That is free money. In my humble opinion, medium of payment does not drive discipline, the attitude towards spending drives discipline. One could have an adequate amount of cash in the wallet and still spend everything. I know quite a few FI folks focus on paying via cash but I believe there's a huge opportunity cost there.