When my resident peers learn that I’m putting 23.5k away annually as a resident or that I’ve already paid off my student loan, many people’s response is “I’d rather enjoy life now.”
I totally agree with enjoying life”always.” I also believe that saving NOW is not mutually exclusive with enjoying life NOW. I would like to share a few ways to save and enjoy simultaneously.
- Rain check: We have pretty high standards for what we eat, we strive for organic, non GMO, no processed, and fair trade whenever possible. This also means that our food cost much more than the alternatives. Because organic foods frequently cost 100% more expensive than it’s non-organic counterparts, we are always on the look out for sales. For instance, when organic cluster tomato goes on sale for 98 cents/lb at Sprouts (normal price 2.99/lb), we clear the shelf and ask for rain check. John will request a rain check and I will request one, which allows us to purchase organic tomato at the amazing discounted price in the future. But what do I do with 50 tomato? Brings us to the next point. Freezer
- Freezer: I roast all the tomato, then jar and freeze them for chili, marinara sauce, and anything else needing a tomato base. Freezer is also very cost effective when you buy high quality meat in bulk on sale or diary products such as organic cheddar cheese, Ricotta cheese, etc.
- Ibotta: it’s an iPhone app that allows you to get cash back on certain items you purchase. The categories are wide, ranging from grocery, apparel, electronics to home and office and more. I’ve earned $100 cash in 4 months.
- Prioritize your savings: if you are going to save $100 dollars/month anyways, make sure you run the number to decide where to put it: student loan vs. home mortgage vs. car loan vs. credit card debt vs. retirement account. My order of attack is student loan, then ROTH (post tax) retirement account, then kid’s college fund 529. Make your $100 earn you the best return possible (be it a guarantee return of 7% on student loan or an average 8% over long term investment.)
- Prioritize your spending: Figure out what brings you the most happiness and enjoyment. Research has demonstrated “experiences” usually render more lasting and more profound happiness than “objects.” This is why I rather spend $$300/mo on Mini Wise Money’s art workshops than buying her more clothes or toys. I don’t mind spending a couple thousands for her summer camps but I also don’t buy her little trinkets that cost $2 per piece.
- Take advantage of interest free (or NEGATIVE interest) money. One reason that I am able to contribute 23.5k towards my retirement on a resident income is that I’m borrowing money from credit card companies at 0%. In fact, taking into account the 1-5% cash back and the $100-$500 bonus I get from credit card perks, I have been borrowing money from credit card companies at NEGATIVE 1-5% interest rate to pay off student loan at 7% AND THEN to fund my retirement. This sounds too good to be true, doesn’t it? The main caveat is that you need to be on top of this game. You need to know when you need to circulate your fund so you can pay off that 0% soon to be 16.99% credit card debt. But during the 21 months of 0% interest, enjoy watching ANY growth in your ROTH, 529, or even CD! When time comes to pay off the credit card, your options are plenty: money you saved that’s been growing in a brokerage, CD etc., balance transfer to another credit card with 3% transaction fee for 0% interest rate lasting 18 months (effective annual interest rate of 2%).
- Employee discount: check your company/hospital’s HR / benefit website. There’s power in number. You get discount in as many categories as you can imagine. I get my movie tickets on employee discount and plan to get future cruise or Disneyland trips with employee discount too.
- What do you do to save money beyond “make more and spend less?”
- What are your non-negotiables? Have you found ways to maintain the quality you desire in these aspects of your life without breaking your bank?