Friday, May 11, 2007

Save money, get rich -- Part 1: Be a cheap date

Several months back, Arex (not to be confused with Alex) sought advice on saving money, or how to get rich. I prepared a lengthy and obviously insightful response, but something broke down and my comment didn't go through. Although I don't remember what I had written at the time, my guess is that the basic points were to avoid doing too much of #1 and #2 (below) and how. Nevertheless, I think most of our recent expenses fall under one of the following categories:

1. Social/leisure: eating out and going out
2. Goods: buying and having stuff
3. Living: overhead (food + utilities + rent)
4. Travel: going places and transportation
5. Getting married: paying for a wedding

We are more frugal in some of these categories than in others. It's rare that we eat out, but we sprung for a Nintendo Wii at above-market price. The general philosophy that we live by very compatibly includes that a) we have money in order to use it, and b) money should not be needlessly used, so when reasonable, save.

Today I will share my thoughts on sector 1 : eating out and going out.

Eating out (decrease).
Granted, if you happen to live in an area abundant in Chinese food (countries with a Chinese cultural history, or Arcadia or the San Gabriel Valley), eating out can be very, very cheap. But it is SO, so easy to go to the Cheesecake Factory with friends and drop $20 for dinner after tax and tip. And you might not even be getting any cheesecake. Friend's birthday dinner? Now you can include part of their meal (you can't let someone pay on their own birthday). Also please include miscellaneous drinks, appetizers, and desserts that other people have gotten but you are now paying for because someone suggested an equal split for the tab. $25.

This is not to say that we never eat out, but the less often you do, the more you will save. It is often appropriate to eat out if it is the most convenient way to dine with friends, or when celebrating a special occasion. But since one of us is vegetarian, it's usually easier to eat in than to eat out. Not eating out will be more difficult to accomplish for the foodie or if you are employed as a professional food blogger.

Compared to my first year in grad school, I've also improved a whole lot as far as packing my own lunch to bring. Via lifehacker, save $988 a year by packing your own lunch. I've also cut back substantially on the money I pay Starbucks for coffee by brewing my own. Savings: $300-$800 per year, depending on your coffee drink of choice.

Finally, the added bonus of making your own food instead of eating out is that it is bound to be healthier 9 times out of 10. I totally just made that statistic up.

Going out, like, to play (decrease or cheapen). Much to the disappointment of my former roommate, we don't go out very often, and when we do, we tend not to spend much money being out. I suppose this means we are either Very Boring or Easily Satisfied. I prefer to think of this characteristic as "low-maintenance." It doesn't mean that all we do is stay in and watch TV. We don't actually have a TV (we watch shows via the Internet), so that would be hard. But we do go out for walks in the neighborhood (cheap and good for your health), going grocery shopping (cheap and functional), sailing at the UCLA MAC (free because Alex is a volunteer TA for their classes), reading together or apart at the bookstore, seeing a movie (usually for free with movie passes either of us have gotten from donating blood).

Staying in (increase). Staying in is usually cheaper than going out, unless the main activity is buying things online, or something like that. If you are willing to put in some effort of preparing food and cleaning up, inviting people over to your home for dinner should turn out to be cheaper eats. Especially if people take turns hosting in. We also like to have people over for board or video games (we have spent money buying these), which are more socially interactive than going out to see a movie.

Some links on fun things to do on the cheap:
And, because it's a good article:

piggy bank photo by: kiss kiss bang bang