How to Spend Less on Some of Your ‘Needs’

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How many times have your children said, “I need this?”

Or how many times has your spouse said it?  What about you?  How many times have you said it?

At the risk of dragging out the old, “I had to walk to school uphill both ways in the snow,” argument, what Americans consider a need today is much different from the past.

In addition, Americans have created a culture in which the concept of “need” is much different from anywhere else in the world.

Enough about historical comparisons and international economics.  Let’s look at a few examples of what Americans today consider needs and just how ridiculous (and expensive) they are.  While we’re at it, let’s consider some common sense alternatives.

How You Can Spend Less on These ‘Needs’

Bottled Water

The water that comes out of your faucet might have a slightly strange taste but the facts are that it’s still much better for you than water in countries around the world.  The difference is that savvy marketing has convinced you that you need bottled water in a (possibly toxic) plastic bottle from a secret mountain spring in Washington.

According to the International Bottled Water Association, the average person drinks 167 bottles of water each year.  That’s $225 per year. At an average cost of $1.35 per bottle, it would take 10 years of refilling a water bottle with tap water before you spent $1.35.  One more fact: If your tap water cost the same as bottled water, your monthly water bill would be about $9,000. (Based on San Francisco water rates.)

If you can’t live without filtered water, the cost of a water-purifying pitcher is about $50 annually.

Starbucks

Spend less on your needs.

Spend less now and save lots in the long run!

Something feels trendy about getting your daily dose of Starbucks.  (As if the glorious taste isn’t enough.)  Conservative numbers look like this.  If you purchase one latte daily, that’s about $1,460 per year.  Over 30 years, counting investment income you could have made if you saved that money, you would have an extra $239,891.

You’re probably not going every day but even half that amount is a lot of money.

Are you one of those that “have to have your caffeine to function?”

Maybe your expensive taste for hoity-toity coffee means that old school coffee maker on your kitchen counter needs an upgrade.  Let’s get you a Keurig coffee maker and load you up with those little K-cups.

The machine will cost $58 and each K-cup, somewhere around 60 cents.  If we divide the cost of the machine over three years, that makes the yearly cost of your daily coffee about $239.00.  Even if you add in some other ingredients that make you the ultimate barista, it’s still far less than hitting the Starbucks drive through.

[Editor's Note: My preference is to buy my own beans and make coffee with a French Press which you can buy for about $20.]

Cellphone

Calm down.  We’re on your side.

In a world where the landline is going the way of the VCR, the cellphone is quickly becoming a necessity.  Professionally, employers expect that they can reach us almost instantly and we want to have constant contact with our family.

Here’s where it all breaks down.

Do you globe trot in a private jet?  Do you live on a multimillion-dollar estate?  Do you drive a Ferrari?

Probably not and that’s because you can’t afford those items.  You’re not upset that you don’t have them.  You’re perfectly happy parking your couple-year-old Honda in the driveway of your modest home.

The truth is that you probably can’t afford the Ferrari of cell phones either.  The reason you have one is that cellphone carriers allow you to pay most of the cost of your phone over a two-year period.

If you head to Verizon and pick up the cheapest iPhone 5 and activate it with a bare-bones plan, it’s going to cost you about $1,800 the first year and $1,600 the next.  If you add all of the bells and whistles, it’s going to set you back more than $3,400 for the first year and about $3,000 the second year.

Can’t live without a smartphone?

That’s OK.  You can pick one up at MetroPCS for $99 and sign up for its $40 per month basic plan (contract free) and spend about $648 for the first year.  A smartphone is certainly not a need, though.  You can pick up an even cheaper phone and save more.

Restaurant Food

The drive through is a glorious thing and sitting down at your favorite restaurant after a stressful day at work might be even better.

Oddly, this idea that nobody has time to cook anymore has made eating out a necessity in the minds of too many.  Without factoring in alcohol, an average dinner for two at a chain restaurant is $27 including tip.  That’s a little over $2,800 per year if you eat out twice each week.  Eating at home would cost that same couple about $11 per meal or less than half the cost of eating out on an annual basis.

What about the notion that there is some premium to consider where the amount of time you don’t spend cooking is time you can spend earning?  That could be true in rare occasions but does it really take that long to heat up a steaming bowl of vegetable soup or a plate full of homemade spaghetti?

Finally

Here’s what is worth noting: Americans don’t believe they’re winning the money battle.  They feel like prices are rising, wages are falling, and saving is impossible.

That, to a large degree, is true.  What so many Americans fail to recognize is that their perceptions about what is essential and what isn’t, are flawed.  It’s a lot easier to cut expenses than it is to make more money.  Start by reducing one expense and see what happens.  Then cut or reduce something else.

Small reductions add up to big savings.

Gerrid Smith is CEO of the charity-focused coupon website, Save1. They provide coupons and deals from over 5,000 online stores! Each time a coupon is used, they provide a meal to a child in need.
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Published or updated May 6, 2013.

Comments

  1. Restaurant food is my downfall although I don’t often sit in a restaurant. I am a big fan of take out and drive through because restaurants frown on people wearing fuzzy slippers and pajamas and I like to change my clothes as soon as I get home from work.

    I have to stop being so wasteful. It is ruining my budget and my waistline.

    • Glen Craig says:

      If I ever open a restaurant I’ll make sure it’s fuzzy slipper-friendly!

      What helps is is having a few go-to meals we know are easy to make. Also making extra for the bigger meals to have the next day.

  2. Starbucks is good, but not that good. I can live without having me a cup of latte.

    • Glen Craig says:

      Not everyone gets a latte there though. But there are ways you can get your coffee for less. A good thermal cup can last hours for hot coffee made at home.

  3. Good insight. We’ve taken care of the water and coffee buy simply putting a water purifier on our faucet (maybe $30 at Costco) and brewing our own coffee at home. Starbucks is nice and all but we actually like ours better and you don’t get the burnt Starbucks taste. The smartphone, however, is my downfall. ;)

    • Glen Craig says:

      We still like going out for a caffeinated drink but we definitely like our home-made coffee the best. That said, I buy better beans too so it costs a bit more per pound but we still save by making it at home.

  4. I don’t understand why people spend so much on all of those items either. I use a filter for my water, just because it tastes so much better. I would say because it filters out a lot of contaminants, but I know most will show up when you shower. I brew my own coffee, and my cell phone plan is roughly $2.50 a month. It’s a every 4 months or my minutes die. Sometimes I forget to renew, because I use free wifi for all my calls. :) Then there is eating out, I love cooking and paid off debt by not eating out. I have a hard time, because I cook such good nutritious food every week. I batch cook, so yes I have to warm up leftovers, but I also can eat something quick that way. I don’t know why more American’s don’t take advantage of all these ways to save.

    • Glen Craig says:

      We like to go with what’s easy but I think we tend to forget what that really costs us.

      We recently bought a water filter for the house that filters the water as it comes into our home. This way we cut out a lot of the contaminants before they hit the shower.

  5. I have brought out the “I had to walk a mile to school in ten feet of snow, uphill both ways!” on several occasions, and nobody around here has yet to notice the physical impossibility of doing that. But when I was a kid, my mother never bought full-priced bread. She always went to the day-old rack and bought it at half price. And I never felt poor.

    • Glen Craig says:

      We’re all so afraid of being called cheap these days aren’t we (and by ‘we’ I mean as a society)? And what does it really get us?

      You know what, we put our bread in the fridge and it keeps longer that way. You can freeze it as well.

  6. Our water is from a well with high sulfur, so we end up smelling like rotten eggs if we don’t filter it! Not a NECESSITY, but more than a bit off putting for those around us if we don’t. :)

    We have cheap (free) cellphones now and no landlines, without data plans, but we’re doing app development which require actually buying smartphones for the first time ever. The expense is a bit gut-clenching, but it’s necessary for app creation!

    • Glen Craig says:

      App development sounds exciting! Hopefully that leads to more income to pay for the phones. There must be simulators online though to test with?

  7. When we decided to live frugally, buying bottled water and Starbucks coffee are among the top list that we eliminated in our lifestyle. If we need some caffeine treat, we simply brew coffee in our coffee maker, add milk and cinnamon and voila!

    • Glen Craig says:

      It’s amazing what we can cut out when we make that choice.

      People talk about cutting out Starbucks but I hope they realize you can buy their beans and brew them at home? Though I guess a lot of people associate SBs with their fancier drinks.

  8. A very long (40 years ago), I started taking my lunch to work. I started one day a week and kept adding a day slowly as I became comfortable with it. Small changes can easily be adapted into your routine. More recently, I used to go to Starbucks every Sunday. It was a treat for me. I used to go next door to the bookstore and look at magazines and books. During the last year, a number of my favorite bookstores shutdown. I guess a lot of people were just reading vs. buying. I cut down my Starbucks visits to once a month. Again a small change!

    • Glen Craig says:

      Great points! You don’t have to do everything at once. In fact it’s better to build small habits that work long-term than make a big change that doesn’t last.

      I did something similar with lunch at work. I never used to get too extravagant anyway with lunch but it was still so much cheaper to bring my own (I did work in NYC so even a salad was expensive).

  9. My perspective might be fueled by the fact that my family immigrated to the US from a developing country, but, believe me — 99 percent of the things we buy ARE NOT needs. Most people would be surprised at how little a person actually needs in order to get by. :-)

  10. Shawn James says:

    While there are lots of ways to save those extra bucks, depends on person to person or family to family which all ways can be followed by them? The ways I have followed is eating less outside and also I have given up my cable TV because we can watch our favorite TV shows through our internet.

  11. I prefer make coffee in my kitchen than buying in starbuck. I prefer cook the food rather than eating a restaurant.

    • Me too, Red.

      I invested in a nice coffee machine so I much prefer the coffee at home vs. Starbucks. My wife is also an amazing cook, so the only reason we go out is to give her a break, not because we’re looking to have better food :)

      Gerrid

  12. I need to solve my cell phone plan (but I am afraid I can’t do much here anymore anyway) and bottled water. I need to convince my wife, that the tap water is fine to drink. She thinks it is not and insists in buying bottled water :( Any tips how I can convince her?

    • Martin,

      Your wife could be right. Maybe the tap water in your area is no good. Do you have ability to get a report from your local health dept?

      If you do need to buy water, don’t buy the small water bottles. Instead, refill the large gallon (or 5-gallon) containers as that is the most cost effective option.

      Gerrid

  13. I have done all of these, but am still working on the cell phone. I am still trying to get a cheaper plan.

  14. Some thing about purchased coffee! The home made stuff is never the same! I have cut out Starbucks though. I now go to McDonald’s for my iced coffee’s. They are way cheaper. Not a big step, but it’s progress.

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