5 Ways to Save BIG Money without Skipping Lattes |

WARNING: This is a long post, but it's chunky. If saving big dollars is a priority for you, I urge you to take the time to read it.

I hate wasting money almost as much as I hate wasting time. Years ago, I loved to spend money. If I wanted something, I bought it, simple as that. And then I ran out of it, lost everything and got divorced.

I wasn't always like that, though.

Growing up, I learned the value of delayed gratification. Mind you, it was easier back then, mostly because credit cards weren't so easy to get. But my parents also instilled in us, not by their words but their actions, the value of waiting for what you want and paying cash for it.

Because of this, they never had a mortgage. Instead, they took lots of overseas holidays.

One of my dad's old workmates used to call it ‘blowing money out the arsehole of a 747'. He'd done well with his investments and only worked so he'd have something to do each day. That, and he wouldn't have to see his wife every day, probably.

Somewhere in my twenties, I discovered easy debt and decided I should have some. And then some more. And then more still. Much of it went into appreciating assets (five properties), but plenty of it was squandered on ‘lifestyle' purchases, too. When the company I worked for starting going south and my income halved, my over-geared lifestyle soon collapsed.

Then my divorce took care of the rest.

These days, I'm rediscovering my old ways (the ones before I lost everything), and I have to say, it feels pretty damn good.

So, just in case you're headed towards the same financial abyss I just crawled from, I've come up with a chunky list of the top five ways I've dramatically reduced my spending. Plus, I don't want you bumping into me on your way through!

Ready? Here we go.

1. Don't Commute

Before you skip to the next one thinking ‘this doesn't apply to me', there are two very different ways to achieve this.

First, if the nature of your work doesn't demand your presence at a specific location every day, there's a good chance you can work remotely.

This is why Upwork, Freelancer, Hubstaff Talent, and Fiver are booming.

If you're looking for an ongoing employment relationship with outsourced talent (as opposed to a one-time project hire), then Outsourcely is worth investigating.

They're offering an extremely generous 30% discount off any of their plans with the promo code ‘staff30'. I haven't used them yet but I'm impressed with how they've designed their platform . If you happen to use them, write to me and let me know how it went and perhaps we can write a story about your experience with them.

Thanks to the Internet and tools like Basecamp, Slack, Dropbox, Harvest, Skype and Facetime, millions of people are working from wherever the hell they like. Just today, I worked from three different suburbs.

My main employer, who I converse with daily, rarely knows where I am.

We have the occasional face-to-face meeting, but 90% of the time I could be at home, in the mountains or in a coffee shop – it makes no difference.

Before we go on, I should explain that it didn't start out this way. Initially, I reported to the office like everyone else. But over time, I negotiated more and more time away from the fluoro-lights and orange cubicles. Soon, they acknowledged no difference in my productivity, so agreed to let me do it every day.

Besides, it freed up a desk in the office, and because I came off the payroll (I bill them once a fortnight), it reduced their taxation, WorkCover and superannuation overhead. A win-win.

Thanks to this arrangement, I hardly need to drive anywhere. Sometimes my car will go unused for almost a week, saving me fuel, maintenance and precious time. This means I can get up at 6:30, have some breakfast and be ‘at work' by 7. You can't beat that with a stick.

You can't beat that with a stick.

I mentioned there were two ways to skin this cat. Well, the second one is to live close enough to work that you can either walk, cycle or train/bus it there. A friend of mine, Angelo, has a tram stop 100 feet from his front door. This has allowed him to go from two cars to one. That's a big saving each year.

And it's not just the cost of the vehicle, but the fuel, tyres, parking, maintenance, insurance and registration. Then, of course, there's the depreciation. If he's ever stuck and in need of rescue, there's always Uber.

Kylie, over at The Thrifty Issue, saved $30,000 a year just by moving from the outer suburbs into a city apartment. Thirty grand!

When she travels, she rents it out through Airbnb, plus she rents out the car space since she no longer needs a car on site. She still has a car, which she keeps at a friend's house in the suburbs, but it's rarely used. Almost all her expenses have plummeted, including transport, parking, groceries (thanks to the city food markets), health and fitness, entertainment and utilities.

Plus, with all the time she saved, she's managed to pursue many different projects of her own, some of which have delivered handy profits! This highlights the enormous opportunity cost of commuting, too. When you're no longer sitting in traffic or a lengthy train ride, you can put your mornings and evenings to more productive use.

2. Switch your Mortgage to Interest Only

A lot of people want to own their own home. Personally, I don’t see the value in it. To me, it misses the biggest opportunity most of us have for leverage and wealth creation.

Your home is more than just a roof over your head. It’s also the best source of the cheapest finance available – equity.

Personally, I’d rather buy real estate or index funds with my equity, and let my money make money. Every mortgage I’ve had has been an interest-only one.

The equity in our properties comes from the growth in value, not the principal repayments. And since we never speculate with real estate, our properties have always trended upwards.

Rather than applying a principal payment to the mortgage, I prefer to use that money to buy another house or invest in an index fund. If I use it to buy another property, I then have not one, but two houses growing in value.

Let me explain this a bit.

A $350k loan over 25 years at 4.5% will cost you $633 a month less if it's interest-only vs principal and interest. If you invest that $633 each month for those 25 years in an index fund netting an average of 6.5% p.a., you'll end up with $474,000 (of which $284,000 is profit). Not bad, huh?

What's more, if the house you purchased with that $350k loan is worth $450k on day one, and grows by an average of 6% p.a., it'll be worth over $2M after 25 years. Even if your mortgage rate is 7% instead of 4.5%, you'll make a gross profit of more than $1.1M, despite the fact you never paid one dollar off the loan.

Paying off my house before I’m 70 does nothing to improve my life. Reinvesting the accumulated equity in my home plus the principal payments I’d otherwise waste does improve my life. It grows the pot and makes money while I sleep.

If this scares you, then do this instead.

Assuming you have a principal-and-interest loan, split your monthly mortgage payment in two and pay it fortnightly. A $500k mortgage over 30 years at 6.5% will cost you $3,160 a month, and $637,722 in interest. Pay $1,580 a fortnight instead (half of $3,160), and you’ll pay off your mortgage six years earlier and save $146,869 in interest!

That’s a lot of free money!

3. Get a Cheaper Car and Pay Cash for It

This one is really simple. Don't buy cars to impress other people. No one really cares what you drive.

Seriously – play the anti-Joneses game. Shock people with your maturity and wisdom by spending well below your means.

Look, I love cars. I always have and probably always will. But I refuse to buy anything to impress others, and I see no value in buying a new one, either.

Be smart about this. A four-year old Beemer, Benz, Audi, Jeep, or Bentley is almost as good as a new one. But much more than that, it's often a third of the price. A third!

Unless your investments are up to scratch, your future is set and you can survive without your personal exertion income for a few years or more, don't squander your money on a new car. And for goodness sake, don't borrow money for ANYTHING that plummets in value. And that's 99% of all cars.

Buy what you can EASILY afford and pay cash for the damn thing. Look after it and feel the joy of no monthly car payments. I've lived this way for about five years, now, and I'll never go back.

4. Embrace Contra Culture

In the days before money, people bartered. Example: I would re-shoe your horses and in exchange for that, you'd supply me with all the eggs I could eat. I'd then swap some of those eggs with the local potato farmer for a handful of spuds, and on and on it went.

It was cumbersome but it worked for thousands of years.

What a lot of people forget is this is still a great way of doing business – especially if what you provide is a service, where your only sunk cost is a few hours here and there.

I mentioned before that I love cars. The thing is, though, I don't like to spend money on them. That's why I've hooked up with a few key clients to provide services in exchange for parts and maintenance. I don't pay anything to service our three cars because I create ad campaigns every week for the business who maintains them.

I'll give you another example. A couple of years ago, I gave my dad the last car I ever purchased with a loan – a Benz E430. It's been fully repainted by the same company that repairs McLaren, Aston Martin, Tesla and Rolls Royce motor cars. The interior has been fully redone in high-grade leather by a show car specialist. The suspension, the wheels, tyres and lights have all been upgraded with high-quality German parts.

All of it was done on contra. I built websites, created marketing campaigns and even a 15-metre montage for a used car showroom. I gave them my time and my skills, and I ended up with the best E430 in the country. Well, my dad did.

5. Don't Treat Shopping Like Entertainment

For a lot of you, this is the most important one.

Working your arse off to buy stuff you'll soon forget, or to distract yourself from not living the life you once dreamed, is an absurd thing to do. We run around buying trinkets, hoping and praying that each shiny new object will finally make us happy. But you know how it always ends.

As I said in my book, Breathe Again, most of what we consume is nothing more than a distraction. It’s entertainment, not pleasure.

Entertainment tends to be a fleeting experience, like a cheeseburger. Pleasure, though, is something you feel at a deeper level, and with none of the follow-on guilt, either – like Wagyu steak.

It might be hard for you to accept, but there's a world of pleasure out there that doesn’t cost a thing. The best things in life don’t come with labels stitched to them or brand names across the front for your friends to admire. No, many of the best things are priceless and free.

Remember, broke people stay broke by living like they’re rich. Treating shopping like a sport is a sure-fire way to stay broke while looking rich to your equally broke friends.

Bonus Tip – Create a Home Office

If you have a spare room or a defined area you can nominate as a home office, you could start claiming tax deductions on a range of home expenses. To be clear, the area or room must be a dedicated space for the operation of work-related activities, so the dining room table doesn't really qualify.

Whether you run a home-based business or perform a lot of your work-related duties from home, this could be a real boon for your tax bill. Check with the IRS in the US or the ATO in Australia for more details.

Actually, if you're in the US, I found an excellent plain-English article that outlines all the home office deductions available to you and how to get them.

Enjoy your Latte

The title of this post might seem a bit facetious. But many of us only look for small wins (like giving up our favourite drug to save $6 a day) instead of the big ones. The thing is, the big ones are often easier to execute (tried giving up coffee lately?) and they dramatically enhance our lives for years to come.

But people are lazy and sceptical. I think they're mostly sceptical because they're lazy. They'll avoid thinking at all costs, and as for changing old habits or beliefs – forget it.

But you're not like that, are you? You're not going to nod your head as you read this, then forget all about it tomorrow… I hope you don't.

I'll leave you with one last thought. If you knew I would give you $25,000 cash at the end of next year just for implementing a couple of these ideas, would you do it?

Think about that, then start executing.

Shock people with your maturity and wisdom by spending well below your means Click To Tweet



This is the book I've written about killing off your debt in 3 simple steps. It's now available in paperback and Kindle, and I promise it'll pay for itself a thousand times over. If you have debts, you need this book. If you don't like it, I'll give you your money back.

Related Articles

5 Reasons it isn’t too late to Change Your Life
Happiness is a Game of Subtraction
Why I’m Embracing Minimalism
Why The Joneses Will Hold You Back
How it Feels to Live on Your Own Terms

The Tools I Use and Recommend

Tools and Resources for Solopreneaurs

Books Worth Reading

How To Grow A Multi-Million Dollar Property Portfolio in Your Spare Time – by Michael Yardney
Minimalism – Live a Meaningful Life by The Minimalists
Everything That Remains by The Minimalists
Unshakable: Your Financial Freedom Playbook by Tony Robbins


Thanks for stopping by and I hope we get to hang out more in the future. And in the meantime, please feel free to share your own experiences. You can email me directly at peter@midlifetribe.com. I respond to all emails. If this was beneficial to you, please consider subscribing and sharing with someone you think would also benefit. 

Disclaimer & Disclosure: I'm not a psychologist, and I'm not a financial advisor's elbow. This material doesn't constitute financial advice but rather a collection of personal opinions, based on my own experiences. Some of the links on my site are affiliate links, which means that if you make a purchase, I will earn a small commission. This commission comes at no additional cost to you. I provide links to services or products I have used and liked or researched and recommend. Please do not spend any money on these products unless you believe they will be beneficial to you

Also published on Medium.

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Showing 2 comments
  • Kylie Travers (The Thrifty Issue)

    I love how you laid it all out. Those are some big numbers but many never sit down to do the math in it. Thanks so much for including me too!

  • Peter Fritz

    Very true. I’m learning a lot from your Instagram posts, too, actually. You’re very thorough with your thriftiness. Thanks, Kylie. 🙂

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