Go After the High Hanging Financial Fruit

fruit ladderNot long ago I wrote about low hanging financial fruit. These are the easy things you can do to save money that don’t require a lot of time, effort, specialized knowledge, or lifestyle alterations. Now I’d like to move on to the high hanging financial fruit.

Once you’ve gotten into the habit of saving money and you’ve mastered the low hanging fruits, you’ll probably find yourself eager to take your savings strategies to new levels. That’s where the high hanging fruits come in. These are the actions and ideas that are more difficult to master. They may require some lifestyle alterations or upfront money to put in place. They may require some risk or sacrifice. You may have to invest some time in learning new skills or concepts in order to fully master some of these strategies. They may take longer before you realize the savings, as well. And you may determine that some of these are just not for you.

The trade off for the increased level of commitment is a higher rate of return than the low hanging fruits. These high hanging fruits typically save you more money over the long term than the lower hanging fruits. So what are some high hanging fruits? Read on.

1. Grow your own fruits and vegetables and compost for fertilizer.

2. Learn about and begin investing apart from your 401K. Getting more involved in the markets carries some risk, but the potential for great rewards is there, too. Take the time to educate yourself about the pitfalls of investing before you go gung-ho to reduce your risk.

3. Learn DIY skills and do more home/auto maintenance and repair projects yourself, rather than calling someone.

4. Downsize your big gas guzzler for a smaller car.

5. Downsize your house and save on electric, maintenance, and mortgage.

6. Use public transportation, carpool, walk, or ride your bike to save on gas.

7. Learn new cooking skills and cook more meals at home. The better you get at cooking, the better tasting food you can turn out which, in turn, further reduces your desire to eat out.

8. Ask for a shorter work week (work four ten hour days, for example) or the ability to telecommute to save money on commuting costs.

9. Get a second job and use the money to pay down debt or save for larger goals like a car, vacation, house, etc.

10. Save your raises or bonuses. Sock away any extra money you get and continue to live on what you did before the windfall. You’ll see a huge jump in your savings this way.

11. Add insulation to your home. Better insulation in the walls and around doors and windows will save you big money on your electric bills.

12. Install low-flow water devices and save on your water bill.

13. Buy energy efficient appliances when the time comes for replacement. The more energy efficient, the bigger your savings.

14. Install solar panels to reduce energy costs. This is costly in the short term, but if you can afford it, solar can save you big over the long term.

15. Line dry your laundry.

16. Invest in a chest freezer and start buying in bulk.

17. Get rid of your landline phone and use VOIP for long distance.

18. Evaluate your friendships. If your friends are spendy people and you feel pressured to spend beyond your comfort level, consider finding new friends who have values similar to yours.

19. Go meatless at mealtime. Even cutting out meat from a couple of meals a week can be a real savings.

20. Find new purposes for things that you previously would have trashed. Get better at refurbishing and repurposing items you normally throw away.

21. Save up and pay cash for your cars.

22. Learn more about the tax code and maximize your tax savings. Don’t cheat, but do know what deductions you are entitled to and don’t hesitate to take them if you qualify and can prove it.

23. Raise your deductibles on your insurance policies in exchange for lower rates. Only do this once you have enough saved to cover the higher deductible.

24. Use a flex spending account or other tax advantaged plan to pay for medical expenses.

25. Stop smoking, eat less, and/or consume less alcohol. All of these have positive impacts on both your health and your wallet.

26. Eliminate the gym membership and work out at home/outside.

27. Rethink the holidays. Don’t give gifts or, if you do, drastically reduce the amount you give. And don’t participate in every holiday ritual out of a sense of obligation. Only do what you find meaningful and important.

28. Get rid of one car and save on gas, insurance, and taxes.

29. Aggressively pay down debt. A low hanging fruit approach to debt reduction is to pay just a bit above the minimum payment. A high hanging fruit approach is to aggressively throw any additional money you have at your debts until they are all paid off. You can work a snowball plan or pay on whatever debt you want to be rid of first, but you are paying well above the minimums in an effort to retire the debt quickly.

30. Generate passive income. Passive income is money that you make from prior actions. It’s the best kind of income to have because you continue to get paid, even though the initial work is done. You can generate passive income from wise investments (interest income), royalty payments, real estate rentals, or other entrepreneurial activities in which you generate a product that continues to sell.

31. Eliminate some of your bills. Rather than simply reducing your cell phone, cable or Internet bills, eliminate them altogether. Use the library for Internet service and find other ways to entertain yourself aside from TV.

Once you know how to pick both the high and low hanging fruits, your savings will grow by leaps and bounds. Once you master these, you will be well in control of your finances and more aware of where your money goes and how to make it work for you. You don’t have to master every one of the high hanging fruits to see big results, either. As I said, some of these are difficult or unappealing for some. But if you do just a few of these in addition to the low hanging fruits, you’ll see a difference in your finances.

Image courtesy of //Rutger

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One Response to Go After the High Hanging Financial Fruit

  1. Lori says:

    Wow, good list. While we are doing some of these items, and others we can’t do at this time (renting, so cannot alter the home), there are some great challenges. Thanks!

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