The best way to save money?

Rental Property Investor · Norman, OK · Member since 2018 · 158 posts · 529 votes

Yet another chance to be featured in the next issue of BiggerPockets Wealth Magazine!

Calling all finance savants: What money-saving strategy do you swear by?

By responding here, you're allowing us to print your name and response, if chosen, in the next issue of the magazine. We're excited to hear what you have to say!

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Matthew Irish-JonesBusiness Member

Real Estate Agent · Buffalo, NY · Member since 2017 · 2k+ posts · 2k+ votes

@Kaylee Walterbach Shut down your Amazon prime account

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Russell BrazilBusiness Member
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Real Estate Agent · Washington, D.C. · Member since 2012 · 17k+ posts · 30k+ votes
4y
Too many people in personal finance circles focus on how to save money. You need to have an adjustment in the way you approach finances. Learning to grow your income is 10 times more powerful than learning to scrimp and save pennies.
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22 Reply
Barney Davis
Rental Property Investor · Jackson, MS · Member since 2019 · 33 posts · 9 votes
4y
@Kaylee Walterbach live on less than you make, invest the leftover. Always have leftover…
1 Reply
Account Closed
Rental Property Investor · Brooke Park Drive · Member since 2018 · 1k+ posts · 2k+ votes
4y
I would recommend starting with rich parents, and when you’re old enough make sure you marry rich.
5 Reply
John Clarken
Contractor · OR · Member since 2021 · 42 posts · 33 votes
4y
Here are a few tips!
Be thrifty:
Buy clothes on sale, look for second hand furniture, estate sales, cook at home and meal prep, rent books/movies from library- makes sure to check if it is a need vs want
Contractor Bids:
shop around, get at least three and make sure the scopes are the same. Include questions on durations and start times. This is the best way to judge the pricing. If they are all close call and ask questions to try and understand better. Get bids way ahead of when you need them. If not you could be forced to pay a premium due to time constraints Watch videos on the specific tasks to understand scope and time.
2 Reply
Brandon Hicks
Investor · Avilla, IN · Member since 2013 · 796 posts · 769 votes
4y
@Kaylee Walterbach
When someone says “save money” it means that they’re attempting to save some of the money/income that they already have.
The amount that you can save is finite...the absolute most that you can save would be 100% of the money/income that you already have. That is of course, not possible.
If you focus on creating more money/income you’re dealing with a potential number that is infinite.
I’d rather focus on that.
3 Reply
Robbie Tillman
Rental Property Investor · Chapel Hill, NC · Member since 2021 · 8 posts · 4 votes
4y
@Kaylee Walterbach
Move the bulk of your $ to your savings account (or other account that makes funds hard to access) and only leave yourself a low percentage to sit in your checking every month. If you have it, you’ll spend it.
2 Reply
William Walker
Investor · Wilmington, NC · Member since 2016 · 211 posts · 262 votes
4y
I heard this on some program about people paying off debt. Take the amount you need to pay and create an excel spreadsheet of just boxes representing the amount you need to pay off. If you owe $10,000, create a sheet with 100 boxes. Every time you pay a $100 off the debt, color in a box. Gives you something to look at instead of just numbers and creates a personal competition to fill out more boxes.
I do this with savings instead. For my last purchase I wanted to save $30,000. I printed a sheet with 300 boxes. Every time I moved $100 in to savings I colored a box. When I was going to buy something silly I’d move the money to savings and color a box. Had the sheet filled in less than a year, probably would have slowly taken me at least 3 years otherwise.
11 Reply
Curtis Mears
Property Manager · Raleigh, NC · Member since 2014 · 729 posts · 596 votes
4y
@Kaylee Walterbach
Prioritize need vs want.
Do you want the flashy house or need it? Do you need to pay to watch TV or want it?
Also, watch out for monthly fees. $100 may not be alot of money until you pay it every month for 10 years. Then that same $100 is $12,000.
1 Reply
Jack Perfett
New to Real Estate · Philadelphia, PA · Member since 2020 · 65 posts · 30 votes
4y
The best way that I found for myself was to take a designated amount out of my paycheck the second I got it and deposit it in the highest yield savings account I could find. Having the money out of my checking account didn’t make me miss it and certainly didn’t allow me to spend it!
3 Reply
David Shakhunov
Investor · Sacramento, CA · Member since 2020 · 33 posts · 19 votes
4y
I want to echo all the other budgeting responses. It is super important to budget.
Benefits of budgeting:
1. can plan on how much you can save every month
2. don't feel guilty on spending money on fun/entertainment (you don't overspend in this category as well)
3. when every dollar is budgeted, you see where you can cut expenses
4. having a plan and approximate time when you will save X amount by Y date is motivational
2 Reply
Jonathan R.
Investor · Wichita, KS · Member since 2017 · 584 posts · 813 votes
4y
Buy. Borrow. Die. Explanation: Buy-You buy an asset, start a business, or inherit a fortune. Borrow-Rather than selling the asset you let it appreciate over time (If you sell you pay taxes on the gains). You borrow against the asset to continuing buying more assets. You live on borrowed cash. You keep your income as low as possible for tax purposes. Rather than paying yourself a salary if you own a business, you borrow against your assets as that money is tax free. Die-You work with an estate planner to pass along your assets to your heirs so they can rinse and repeat.
7 Reply
Jon KellyPro Member
Investor · Bethlehem, PA · Member since 2016 · 929 posts · 951 votes
4y
@Kaylee Walterbach write down your goals, repeatedly. It starts with the mindset of committing to your goals. While this isn’t a tactical answer (many have already provided fantastic tactical options), it’s a great place to start. If your goal is to buy “X” number of properties within 12 months and you remind yourself repeatedly, then your focus shifts solely on the goal. You don’t allow the temptation of buying the new car or a new piece of jewelry to sink in.
0 Reply
Mackenzie Grate
Interior Decorator · Ulster County, NY · Member since 2020 · 204 posts · 177 votes
4y
One of the main strategies I use in my renovations to keep costs down and increase value is repurposing. I am constantly looking for ways to save on material costs because that is one of my biggest line items. On my Airbnb renovations, often times the items I take out can be reused in my long-term rentals (older mirrors, older lighting fixtures). Any wood that is pulled out, I either repurpose in the build or use as firewood at my Airbnb rentals. Old bricks that are removed are repurposed into landscape design. And one of my absolute favorite renovation hacks is to join the local "Buy Nothing" list serve on Facebook. These are groups where people believe in the "gifting economy" which means simply giving away things you don't need anymore. So I'll see stuff pop up that will help furnish my Airbnb or help in a long term reno and I'll ask to take it off their hands. If there is an item I am removing and don't have a purpose for, I'll list it to give to someone else in need and save on dump fees. Overall, it's a win/win.
3 Reply
Todor Ialamov
Real Estate Agent · Burlington MA · Member since 2018 · 114 posts · 142 votes
4y
@Kaylee Walterbach
The best way to save money is to make more money.
Find out how much you need to live, then go out there and make as much as possible.
Save the difference!
1 Reply
Dale Degagne
Investor · Canada · Member since 2021 · 38 posts · 29 votes
4y
Tap into human psychology by paying with cash and tracking every single dollar spent. Sound laborious and inconvenient? It is!

When we use cash there is a greater sense of loss as we physically see and feel the money exiting our possession. Tapping or swiping a card (especially a credit card) is too convenient and is much less likely to trigger an emotional response during a purchase.

Tracking everything adds an extra level of understanding to our finances (we spent exactly $623.54 on eating out last month. WHAT?!?!?). It also keeps us accountable to ourselves and our partners. Like they say, what gets measured, gets managed!
1 Reply
Josh Shaughnessy
Member since 2021 · 88 posts · 86 votes
4y
Decrease spending. Cut that subscription you aren't really using, then set up your bank accounts to automatically transfer that amount to savings monthly. You don't feel the pain because that money was already going somewhere, now it's just going somewhere more productive. It also puts an additional hurdle to resubscribing because now that $17 comes out of the decreased budget.
0 Reply
Gabriel Craft
Investor · Dallas, TX · Member since 2017 · 14 posts · 14 votes
4y
#1: Actually audit expenses. Sit down each month, look at where your money is going, discern if you are actually getting the value you seek out of all the expenses, and "kill" subscriptions unceremoniously - you can always get them back later.

#2: Cook. It is fun.

#3: Attend virtual real estate events where it makes sense rather than fly around the country every week going to every in person event. We do syndications and need to network. We do not always need to attend in person to grow our network effectively.

#4: Don't ever "run to the back of the room" during a real estate "pitch" event. I have spent plenty of money on mentors but only after research, hearing from people that have both good and bad feedback about program, and ensuring that it is the right fit. Don't be one of the 30-40% of people who blow money on mentors that they could be using to invest in great deals.

#5: Make a commitment to adding additional revenue streams and improving your skills so you can make more money. Focus on growing top-line when it makes sense rather than just cutting expenses. Get out of your own way and build skills that lead to rewards and results.
2 Reply
Conn G.
Rental Property Investor · Cincinnati, OH · Member since 2019 · 120 posts · 68 votes
4y
House hacking near your work. I did my first house hack last year on a quadplex that's 5 minutes away from my work. This allowed me to have a savings rate of 60-70% on my post-tax income. Plus, with close proximity to work, I'm able to focus my time on more important activity than driving mindlessly.
2 Reply
Eric Nintzel
Rental Property Investor · Sayville, NY · Member since 2019 · 7 posts · 5 votes
4y
Here's some steps I employ to maximize putting my money to work.
1. Track all of your income and expenses using Toshl free app. I'm a high earner and have been doing this nearly 3 years, and the first few months were eye-opening. The simple act of tracking everything will put you in the right mindset. I never stress about money or obsess over any purchases, but I see where all of my $ is coming from and where it is going.
2. With respect to item #1 don't just focus on the expense side and trimming the fat; focus on ways to increase your income. I see every new income property as "giving myself a raise."
3. Do NOT succumb to the income creep. Keep your good habits and maintain your lifestyle. "Employ" those additional dollars by putting them to work to bring back even more passive income.
4. "Pay Yourself First." I do 10% pre-tax to my 401k - at least maximize your employer match. I also do 10% (maximum allowed) to my company's ESPP. Coupled with my employer's very generous RSU program, as my stock holdings grow and appreciate I have the option of selling and buying more rentals.
5. Leverage your equity to create more passive income. I use 2 HELOC's to fund all of my REI activity. The HELOC's are on my primary residence and another local rental property and I use them to make out-of-state acquisitions (I live in NY), either buying properties with "cash" or to fund the down payment.
6. "Paycheck Park." All of my W2, rental and other income immediately goes as principal only payments against my HELOCs (higher interest rate HELOC first), so I never ever have any liquid $ sitting in a checking or savings account. I pay all my bills online and draw against the HELOC as needed. This reduces my interest exposure.
7. Use credit cards wisely. Coupled with paycheck parking, I pay for everything on credit card to keep my cash in my HELOC and always maximize my rewards. I have an entourage of rewards credit cards, honestly probably more credit cards than most people would be comfortable with, but most of my purchases fetch me 3, 4, 5% in cash back rewards. And if I don't have a card with a bonus category for a particular purchase I have multiple 2% on everything cards as my default fall backs.
8. Get creative. I use 4 business credits and an online bill payment service to pay down my HELOC. I time it right so my payments post the day after my credit card statement closes and with that I essentially have ~60 days of interest free $ sitting on my credit cards and reducing my HELOC insterest (another ~30 days for the next CC statement to close and then another ~30 days before the payment is due). I pull back out of the HELOC to pay the CC in full. Rinse, repeat. Since they are business credit cards it does not impact my personal credit. And I have my rewards category set such that the rewards actually outpace the fees charged by the bill pay service. So I actually make money doing this, nothing to write home about, but in addition to saving hundreds on HELOC interest my credit card rewards less bill pay fees is actually a net positive.
9. Let it snowball. As you start stacking income properties and avoid the income creep, you will see your portfolio grow exponentially. Every time you "give yourself a raise" by buying more cashflow it gets easier to pay back down your HELOC to the point where you are reloaded and ready to give yourself another raise. At this point, I basically work for my health benefits and RSUs - I can live off of my cashflow if I tightened my belt a bit, but I enjoy my job and I can use nearly all of my W2 earnings to fund my real estate businesses.
10. Set goals and get competitive. Sometimes I set mini goals like this month I want my excess income to be at least $X. But I also have long-term goals in place. I have a 5-year goal that I am currently marching towards and when I achieve that I already know what my next 5-year goal is, and it's a lofty one!
5 Reply
Dave Van HornPro Member
Fund Manager · Wayne, PA · Member since 2009 · 1k+ posts · 1k+ votes
4y
If anyone is looking for a strategy that works both personally and in their business, I'd have to recommend the book "Profit First" by Mike Michalowicz.

It's sort of like the envelope system but on steroids. In essence you're doing something similar but with separate bank accounts and automatic transfers. The book takes a somewhat radical approach to business where instead of employing the age old formula of Sales - Expenses = Profit, it's: Sales - Profit = Expenses.

It really helps put into perspective the necessity of spending and how we choose to categorize our money in terms of allocation.

And what's savings after all, if not the true profits of your hard work?
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1 Reply
Taylor L.
Rental Property Investor · RVA · Member since 2016 · 5k+ posts · 4k+ votes
4y
Originally posted by @Dave Van Horn:
If anyone is looking for a strategy that works both personally and in their business, I'd have to recommend the book "Profit First" by Mike Michalowicz.

It's sort of like the envelope system but on steroids. In essence you're doing something similar but with separate bank accounts and automatic transfers. The book takes a somewhat radical approach to business where instead of employing the age old formula of Sales - Expenses = Profit, it's: Sales - Profit = Expenses.

It really helps put into perspective the necessity of spending and how we choose to categorize our money in terms of allocation.

And what's savings after all, if not the true profits of your hard work?

I've spoken with/interviewed Mike and a number of his adherents. I have finally gotten to the Profit First book in my rotation and it certainly turns conventional thinking on its head.
1 Reply
Jennifer Jo McCallonBusiness Member
Member since 2020 · 62 posts · 59 votes
4y
I love this question. We are all guilty of wasting money at some level, but is it guilt or is life to be enjoyed? I think the answer is somewhere in between. When I was saving to pay for graduate school and then a house- we had a tight budget, regular paychecks and not a lot of wiggle room. And while I wasn't organized enough yet for a budget, a simple plan was enough to squirrel away about $10 grand over the course of a year. First, I took out a set amount of money from the ATM every Monday. this was my "walking around money" for coffee, lunches, drinks. Set that to about $40. Not much, but what do I really need in a 5 day work week? Second, we only ate dinner out once a week OR got take out. ONCE. Sometimes we'd get lunch on Saturday. There are some more obvious ideas too- don't overspend on a car- get no more than you need, buy used but reliable.
More tips:
Don't overspend on a rental apartment- get the cheapest place that suits your needs while your are saving to buy a house.
Don't stress about buying status items, you don't need $150 shoes, and if you do, you only get one pair.
Don't go on vacation and stay in a $450/night hotel when the budget place or a hostel will do just fine, but do enjoy a vacation, life is to be enjoyed.
DO: get a second job a couple days a week, doing whatever, near your home- make $200/wk- it fills time (which prevents spending), can be fun, and adds up to a lot after a year.
And remember: If you save $27.40/day it adds up to $10,000/yr. That is a pretty easy thing to do.
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2 Reply
Trey Fankhouser
Lender · Guymon, OK · Member since 2018 · 9 posts · 8 votes
4y
I think the best money saving strategy I have is creating multiple income funnels in order to create savings. The goal is to have multiple buckets you can fill as an investor because there are always going to be expenses come up (some that you will know ahead of time and others that are unexpected). If you can find a way to create revenue that you are not actively working for every day, it makes it possible to save money. My suggestion is to use that saved money and then try to create another funnel where eventually the investments will keep multiplying on top of themselves.
0 Reply
Andy RouschPro Member
Investor · Mt. Arlington NJ · Member since 2018 · 251 posts · 143 votes
4y
I like to do side jobs and act like I never see the money
1 Reply
Fay Chen
Investor · Bothell, WA · Member since 2015 · 214 posts · 104 votes
4y
Buying gift cards on discount. I use Gift Card Wiki. And don't buy things you don't need.
2 Reply

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