We’ll show you the absolute best way to save money by following the CEO approach. Saving money doesn’t have to be painful afterall.
There’s really only one way to save money. You have to spend less than you earn. For most people that means cutting back on lattes and going out less, but there are actually much better strategies for spending less than you earn.
At IWT, we believe the best way to save money is by utilizing the CEO approach.
Money Saving Tip #1: Cut Costs
Most of us know what it means to cut costs. But cutting costs doesn’t have to mean giving up everything you love.
The best way to save money is by focusing on cutting costs only on things you don’t really care about or don’t use. This way, the change is more likely to be permanent. The two best ways to save money by cutting costs are with the A La Carte method, or the envelope method.
There’s a good chance you’re WAY overpaying for these things.In fact, a conservative estimate shows that we spend over $1,800/year on subscriptions alone.
The convenience is undeniable — subscriptions are a fantastic way to automate our lives.
But when was the last time you scrutinized your monthly subscriptions and canceled one?
Probably never. Yet compare this to any time you went out shopping, saw something you liked, but didn’t buy it.
Read that again. It’s the key to cutting your spending on subscriptions.
The Envelope Method
The envelope method works by putting cash for all your monthly expenses (e.g., gas, going out, shopping) into dedicated envelopes.
For example, you might have an envelope for “Restaurants,” so everytime you go out to eat you’ll take money from it to spend. Once you’ve used all the money in the envelope, you’re finished for the month!
This method is flexible in terms of being able to dip into other envelopes if there’s an emergency. However, there’ll be less money to spend for the month on that category of expenses.
Money Saving Tip #2: Earn More (the BEST way to save money)
As Ramit always says, there’s a limit to how much you can cut, but there’s no limit to how much you can earn.
Before you roll your eyes and skip this step, it is ALWAYS possible to earn more. Even if there’s a recession, even if you’re broke, or busy, or don’t know where to start.
According to Ramit, there are several ways to start earning more. You can ask for a raise at your current job, find a higher paying job, or start a business or pick up freelance work.