STOP SPENDING, START INVESTING! - Free E-Book

Here are the brutal facts about the average American household’s finances:

The harsh reality is that a significant portion of Americans are not keeping their heads above water financially and they are stacking up debt by spending money they don’t have. With interest in investments like stocks, crypto currencies, and real estate at an all-time high, we have compiled a list of our top tips for reducing your spending and maximizing your savings for investing.

Making changes to your spending habits may feel like swimming against the current, but BELIEVE us when we say, it’s worth it. With some minor (and some MAJOR) tweaks, you will be well on your way to taking control of your investing future and bankrolling your own trading empire.

We have compiled Shark Invest’s top strategies for Reducing Spending and Increasing SAVING. Here they are in no particular order…

One of the cornerstones of success is MOTIVATION. You must be clear about your goal and keep it top of mind whenever you reach for your wallet or click your mouse.

You goal may be to pay down your student debt, open a stock trading account, buy a new home, or prepare for your retirement. Regardless of your current financial status, a clear, measurable, and realistic goal is vital in changing your spending habits.

Motivation and Goal-Setting are topics that been exhaustively studied and many excellent publications exit to support you in this vital stage. Check out a few of our favorites:

Shark Investor knows their environment. They see everything and don’t miss a single minnow. You must do the same with your spending in order to master your finances. This is probably the most difficult part of the entire process, yet, if you commit entirely, it will have the greatest impact.

Anyone who has ever been on a diet can attest to the fact that logging calories forces you to THINK about everything you put on your plate. The same goes for spending – studies show that you are LESS likely to spend when you know every dollar is being tracked and accounted for. Ultimately, this is entirely on you, but if you are dispassionate and relentless in executing this step, you are practically guaranteed to see results.

Habits take time and effort to form, so let’s get serious and commit to phase 1: tracking your spending for a minimum of 30-60 days. Sounds like a drag, huh? Well tough. The business world wants to hide your spending from you so it is easier to lose track of. Fortunately, there are also tools for those who are ready to beat the system!

HERE ARE SOME OF OUR FAVORITES:

Check out our favorite Spend Tracking Tools:

Phone Apps

o PocketGuard, a free budget app, connects your checking, credit and savings accounts and detects recurring bills and income

o Mint lets you track all your bills in one place and reminds you when upcoming payments are due

o Honeydue allows you and your partner to see both financial pictures in one spot, including bank accounts, credit cards, loans and investments

Notebook: old school, but you’ll think twice about buying that daily latte when you see how quickly you get tired of writing down $4.78 each morning. This one is ready to roll with per-templated pages:

Spreadsheet

o Not very portable, but a great way to consolidate and track data! Templates for budgeting available in Excel

Again, this one seems like a no-brainer, but you’d be shocked at how many people skip this important step in reining in their finances. Your favourite team wouldn’t go to the Superbowl without a game plan, right? Here’s a secret – your financial future is going to affect you far more than the outcome of any Superbowl will.

There are just as many ways to make a budget as there are people to make them. You’ll need to try a few and see what works. The right budget is one that supports aligning your spending with your goals, reduces your high-interest debt, and allows you to plan for the future with solid investments.

Here are some of our favorites:

Writing out your budget or creating a spreadsheet is a vital exercise to gain a true understanding of your financial health. It will also allow you to more easily prioritize items and justify changes in spending behavior – “The Budget Says No” or sometimes, “YES! We budgeted for this and we CAN afford it!” Having a budget also allows you to better remove the emotional aspect of spending as it is a little like self-parenting… your calm rational self made the budget, and what the budget says, goes!

Of course, the best laid plans will crumble entirely if you ignore your own good advice. The budget is only as strong as your compliance with it.

For those who find it absolutely soul-crushing to create and follow a formal budget, the 50/30/20 plan is the next best thing. This ratio, adjusted to your requirements, allows a 50% allocation of income to needs, 30% to items classified as ‘wants,’ and the remaining 20% to SAVINGS / INVESTING. Sharks like these proportions as they are what we use to build our financial future. A key element of this strategy is to really tighten the bolts on spending and make your ratios non-negotiable (even with yourself!).

The rise of online shopping and digital payment has made it easier than ever for business to part you from your money. Connecting your credit card to your phone for one-click checkouts, tap payments, or e-transfers are advertised as wonderfully convenient tools for the modern spender. If you have an inclination toward over-spending, you must resist these ‘conveniences’ with every fibre of your being.

Retailers and sales people KNOW that the more work you need to put in to make a purchase, even if it’s simply finding your wallet and entering your card number, the less likely you are to impulse buy. Companies spend millions of dollars creating solutions to make it easier to spend your money.

Help yourself resist the buying urge by making it more difficult to execute a purchase: unlink your credit card from your online shopping accounts. It’s kind of like putting speed bumps in your own driveway. Painful, perhaps, but the more trouble you need to go to when spending your cash, the less likely you are to follow through!

Have a look at these SHARK NETS and some SAFER BETS:

SHARK NET: Phone connected to Credit Card

SAFER BET: Purchase pre-paid credit card for online shopping / payments

This will prevent you from exceeding your budget and will force you to be more conservative with your purchases

SHARK NET: Overdraft protection

SAFER BET: Never use overdraft as a credit line; disable overdraft on your accounts

Fees and interest will accrue quickly

SHARK NET: Pay-Day Loans / Check-Cashing

Massive interest rates and huge fees

SAFER BET: Direct deposit to bank by your employer can help you avoid “rich on payday” syndrome.Low interest LOC for EMERGENCY USE ONLY

SHARK NET: Living beyond your means

SAFER BET: Set your budget to exclude any bonuses or future raises

Act as though your savings are a someone else’s money (future you!) and do not compromise!

When Covid starting making waves in early 2020, people began hunkering down at home, unable to go anywhere and, by extension, spend any money. Of course, there is still online shopping (which has increased dramatically in our household) but the number and frequency of SPENDLESS DAYS has increased. These days are a gift to your bottom line and can really accelerate your saving.

Can this continue when the world opens and we rush out for retail-therapy? It sure can. Logging a few days each month where you challenge yourself and family to spend zero dollars can be fun and can be a great demonstration to your children of how committed you are to building a financial future.

These days are by no means a loss – quite the opposite! Planning an activity that includes meals made from scratch, a family movie night at home, and free outdoor activities such as biking or hiking, can bolster your savings and bring you closer as a family. For those who are flying solo, packing a bag with snacks and a good book, your camera, or even a musical instrument can be the foundation of a grand SPENDLESS adventure on the town.

For those who are REALLY ready to amp up their savings, an entire week or even a month of SPEND-FASTING can carve out your debt in a hurry. Cooking at home, buying only essential items, and focusing on activities that you’ve already invested in (anyone have an old soccer ball or set of oil paints in their basement?) are good places to start. You can even make it a challenge with a friend or partner and amp up the motivation. Take it one step further and consider a trade of sorts to maximize savings and explore different hobbies: lend your guitar to a chum and they can lend you their favourite book series.

These ‘spendless days’ (or months!) can also help you break wasteful habits like morning lattes from Starbucks or dumping money into lottery tickets.

This method forces you to employ your creativity to meet your entertainment needs rather than throwing money into the air and watching it fly away.

This one seems simple, but you’d be stunned with how much money you may be dumping into subscriptions that could be going into your stocks. Do you truly need Netflix, Prime, Crave, AND Hulu? No bro. You don’t. You’ve got one set of eyes and one brain. In a home full of people you may have different viewing tastes, but this is the time to get on the same page / screen. Got cable TV or satellite programming? Ever hear of a digital antenna? You would be stunned with how many HD channels you can pick up with a digital antenna. They cost about $25 and plug into your TV. Most channels with a ‘B’ in their name are required to broadcast their signal FREE OF CHARGE into the airwaves. We cut our cord years ago and haven’t missed a night of news or an episode of Jeopardy!.

If you MUST have paid content like sports and movies, consider this: most sports networks now have subscription services for their content only that you can stream on TVs, smartphones, and tablets via your wifi.

Find the best, cheapest wifi provider with unlimited data and sign up for only the content you actually watch. You’ll be stunned with how much money you have been paying for channels you don’t even watch. If there is a UFC event you MUST watch, find a bar to watch it at and be mindful of your beer budget.

Also – and this is purely a statement of fact – there are plenty of sources streaming (Reddit comes to mind…) and for digital downloads using a VPN connection that are free to those who look for them.

Trim off streaming services for other forms of entertainment as well. Find free media, like podcasts or books, that you enjoy. Libby is a fantastic resource to borrow e-books from your local library.

Not every spend-curbing trick involves cutting out entertainment. You can improve your financial health in many other ways by reducing spend on items you have long ago forgotten are costing you serious bucks.

How many transactions a month are posted to your account? Is it worth the monthly fees you’re currently paying? Banks will list their available banking plans online, so compare and find the best one to suit your needs. It is also a good idea to periodically go over your bank statements (at least once a year) and reassess your bank plan.

Another way to reduce excess spending is by consolidating your insurance policies. Shop around and see which company can provide the best coverage (we also recommend this be done annually). Finally, give your credit card statements a scrub, highlight any monthly charges, and find a way to get rid of anything non-essential.

First, lets acknowledge that these SALES are tools created by retailers to SELL MORE PRODUCTS. Yeah? For example, the notorious $4.99 Costco Rotisserie Chicken - 64 million sold EVERY YEAR. The margins on this product can’t be that great, so what’s the deal? There is a reason we call Costco “The $400 Store” in our house. Once you are in, cheap chicken or not, you end up impulse over-spending on everything from salad-dressing to chainsaws. Show me the person who will suffer those lineups to buy a single chicken.

Okay, with that out of my system: LISTS, COUPONS, and PROMO CODES.

My biggest challenge in reducing my spending is at the grocery store. First, I generally seem to go shopping at the end of the day, before dinner. Bad move. Shopping hungry leads to a cart full of things I want to eat RIGHT THEN. Solution? Make a list and STICK TO IT.

Appetite and impulse are intrinsically connected. With a shopping list however, your tummy will just have to wait its turn. Again, technology has solutions for you here, with dozens for FREE list making apps available for your immediate use:

AnyList organizes your groceries for you by where items are located in the store, and it has a vast database of items already in the app so you can add food quickly with a single tap

Our Groceries lets you link your Google Assistant so you can add items by voice with any Google smart speaker or Google Assistant app

Out of Milk can scan barcodes, automatically adding them to a list, with no typing required

List-making is a great strategy for other purchases as well. Create your list, confirm the items, find coupons and sales where possible, and execute. Taking impulsivity out of the equation can be tricky: stores are in the business of creating impulse and urgency in shoppers. Be stoic in the face of flashy signs and displays and do not stray from the game plan. We believe in you.

When it comes to larger investments like home renovations, weddings, or big-ticket items, keeping a list and including these in your budget will help you prepare for them in due time, as well as allowing you to keep watch for deals and discounted solutions.

Most people think that reducing spending means NOT buying items, but there are some essentials that can never be cut like household items, food staples, etc. The spend-reducer’s goal with these should be to spend as little as possible, buy a reasonable amount to achieve savings, and to avoid waste. How many people currently have a 10-year supply of toilet paper in their cold room? Sure, it’ll never expire, but honestly, that money could probably be living a better life in your investment portfolio than tied up in TP.

There are hundreds of websites that track coupons and promotions for all of the major grocery and box stores, as well as others that provide promo codes for entertainment and travel. Get familiar with them. Here are a few:

• Bargain Coupon Clippers

• Groupon

• Klip2Save

• RetailMeNot

• Honey

Also, as per the Costco chicken example, be aware that retailers create these promos to sell you more stuff. Don’t buy 40lbs of rice that you’ll never eat just because you’ve got a 15% off coupon.

It is important to consider the actual cost of the things we buy. There are plenty of purchases that bring a host of maintenance and consumable costs with them. Examples include vehicles, pets, film cameras, bread-makers, and more. Are you prepared for the costs associated with your purchase and have you budgeted for them?

Vehicles are an easy example – we’re all familiar with fuel costs, oil changes, winter tires, and insurance. However, have you decided to finance the vehicle? What is your interest rate? What are the payment terms and penalties for missed or late payments?

Yet, consider that a new puppy can be adopted for a nominal fee (and we encourage those who can afford to adopt and care for animals to do so!) but have you considered the ongoing cost of food, healthcare, and insurance? Creating a high-low model for these complex expenses is immensely helpful.

If you are borrowing funds for a major purchase, it is vital to analyze the actual full cost of the loan. You can use a compound interest calculator to determine this based on the principle, term, and interest rate.

If your $700 camera for $45/month ends up costing $1,500 by the time you’ve paid it off, well, you may decide to go another direction or buy a camera you can pay for upfront.

My wife and I used to watch shows like Til Debt Do Us Part. One of the most popular hosts of these money-woes shows was Gail Vaz-Oxlade. Check out her books – she’s a budgeting queen:

Her favorite method of budgeting for financially-troubled couples was the cash-in-jars method. The premise here is that if all your money is in cash and you SEE the actual dollars that you are spending on needs, wants, and crap, you will be more motivated to reduce spending and follow your budget. If the entertainment jar is empty for the month, well, I suppose someone is going to dust off the old oil paints instead of hitting the pub for wing-night.

Plenty of studies back up Gail’s methods and this program has the distinct benefit of shutting down spending money you don’t have. It’s visceral. It’s painful. It’s finance baby!

Setting up automated payments for your savings and bills and taking the remainder in cash can fast-track your spending habit reprogramming. I’ve tried it and it’s effective.

If you want a virtual version of the cash-jar method, apps like Mvelopes are free to download.

Oh boy – do we love credit cards. They are convenient, reliable, and always ready to help us spend money we may or may NOT have. Don’t get it twisted, credit cards, if used properly, can be a useful financial tool. The issue here is that we are trying to reduce our spending and maximize savings!

So what’s the play here? First, don’t cancel all of your credit cards. They are a valuable tool for generating a positive credit score and for transacting business. What you SHOULD do is streamline and optimize.

First, pick your most important card – the one that has the lowest interest rate or most useful rewards program, and liquidate the rest. One card is plenty for most people.

Second, put this card in a safe place and use it ONLY for necessary purchases that:

• you can’t pay for in cash

• big-ticket items that will tangibly generate rewards on the card

• you plan to pay off IMMEDIATELY

• not kidding – some gurus suggest freezing your card in a block of ice to reduce the temptation to use it

Seriously. Do NOT carry a balance on your card. “Minimum Payments” are a trap. It is a common misconception that paying the minimum payment will build your credit rating. Sure, it won’t hurt your rating, but carrying a balance is massively expensive in the long term.

Here’s an example:

You’ve signed up for credit card from BestBuy (APR 21.21%) when you bought a new stove, microwave and refrigerator for $5,000. They DID give you a $25 gift card for signing up though, so, that’s pretty dang cool. Your plan? Make the minimum payment until it’s paid off. The minimum payment is 2% of the balance every month, which is mostly comprised of interest. Making minimum payments only, it would take you just over 30 years and $21,643.83 in interest pay off this debt. Oh, and this doesn't include any fees you might pay if you miss a payment. So, your $5,000 has cost you a tidy $26,643.83. That was pretty efficient, eh?

There is a time and place for making a minimum payment – not everyone can pay in full upfront. The message here is to be disciplined, budget for major expenses, and put yourself in a position to avoid expensive money via cards and loans.

In our previous example, I’d bet the cashier who signed you up said these exact words:

“Would you like to sign up for our free in-store loyalty card and get a gift card? You can use it for $25 of your purchase TODAY and cancel it at anytime. Yup, no interest if you pay off your card right away – it’s free money, might as well, right?”

Consider getting rid of high-interest store credit cards that you signed up for just for a promo, and for goodness’ sake, pay these off immediately if you have them!

I call bullshark. The store sells this debt to the third-party card for a nice percentage and the card company counts on the fact that SOME of those who sign up will forget to pay it off and end up grinding away with minimum payments. These store cards are MASSIVELY profitable for exactly this reason. They want you to buy things with money you don’t have so they can sell you credit you don’t need – Credit is a PRODUCT. Stay clear of this garbage, or be damn sure you follow through with paying off the card and cancelling it immediately. If you can’t commit to that, you’ll be just another chump paying thousands of dollars over decades for a $25 gift card. That’s like taking out a mortgage to buy a pizza.

Since when is it a requirement to provide your email address when buying anything from groceries to hair cuts? It might seem like a good idea to get on the mailing list of your favorite stores to keep in the know on upcoming sales, but this can be yet another trap for aspiring shark investors.

The reality of mailers and eblasts is that they are designed to sell. A creative sale by a store you like may be all it takes to push you over your spending limit by committing funds to items you didn’t budget for. If you are trying to reduce spending, simply remove the temptation entirely by unsubscribing from catalogues and emails.

When I went to buy my first (and last) NEW car, I naively asked the sales person, “Is there a sale going on?” He replied, “There’s ALWAYS a sale going on.” It was a good lesson to learn. Sales are created to generate urgency in buyers. Act now! Get it while supplies last! There will ALWAYS be another sale and if you miss a sale at one store, the one down the street will be just starting one. Never fails. Should you try to buy things on sale? Absolutely! But don’t let the sale influence your plan or your budget.

Another self-imposed barrier to spending is implementing a cool-off period before acting on any purchase decision. Let’s use 24 hours as a starting point for purchases over $60. Force yourself to wait and think on purchases for a day. For more expensive items, set longer wait periods – i.e., another day per $60.

Want to buy a new snowblower for $600? You’ll need to think it over for a least 10 days. New car? Let’s sit on it for several months. With rules like this in place, your more reasonable faculties will have plenty of time to surface and talk you out of an impulse purchase, ensuring that the item is really worth the spend. This delay will also give you time to shop around and ensure that you are paying the best price when you do move forward.

Gamification – creating fun out of learning, menial tasks, and SAVING! Great creative and make the saving game your favourite team sport as a family or a friendly competition with your roommate.

Here are a few to get you started:

• FIVER-SAVER: take every $5 bill you get from your all-cash management system and put it in a jam-jar. When you can’t fit any more in the jar, buy a share of your favourite stock

• Remember the SPENDLESS DAYS from earlier? Let’s see how many we can log in a single week, month, or year and calculate the amount of money saved as a result – tie this to an activity like running or learning the guitar (YouTube will teach you anything) for more excitement

• Coupon challenge! See how low you can get your grocery bill (without going hungry) but using coupons and price-matching

• Round up things you no longer use or need and sell them online. This “found money” can be used to fund something fun.

There are things in life worth spending money on. There is also a lot of junk that people have convinced you is important. Do you have 500 copies of National Geographic kicking around? That’s dope. Do you own dozens of pairs of goofy socks that you wear once a year? Sick bro.

Here’s an opinion from a stranger – a shelf of toys in not decor.

Now here’s a thought – how about taking your favourite handful of Nat Geos and making frames for them and putting them on the wall? The rest of it can be sold to someone who hasn’t read this e-book or cares not for my opinion. The thing about collections, and COLLECTORS, is there is always another ‘thing’ to collect or dump your money into. For most people, their collections will never be worth the money they cost. I have inherited three different stamp collections that can back me up on this.

If you have 50 suit jackets for every occasion, implement a “one-in-TWO-out” policy for the next year. You can sell your used threads on Depop, ThredUp, eBay, and Facebook Marketplace.

If you collect movies on DVD, you’re nuts. Buying plastic and stacking it on shelves is over. Time to go digital, my friends. Download and print off the posters of your favorites, get some frames at a garage sale or dollar store, and show the world your love for movies at a fraction of the cost. Better yet, take your smartphone and shoot a zero-budget shot-for-shot remake of those movies. You’ll have fun and it won’t cost you a dime.

Can you collect things? Sure – you don’t need my blessing. This is a book about cutting your spending and building your wealth. Collecting objects, even if they are $25 baseball hats, adds up to a big pile of expensive crap quicker than you can say Go Yankees. Buy one hat. Treat it well. Put one on your birthday list if it’s getting ratty. If you must sport the gear of your favorite squad, how about buying a jacket at a vintage store and sticking a patch over existing embroidery/logos? Some of my favorite clothing was stuff I personalized – I turned a vest with an ugly trucking company logo into a sweeeet NASA vest with a $3 patch. Get creative.

I used to spend a lot of money on tools. Seriously. It got to the point that I had a fully stocked garage with tools I had never even used or had no idea HOW to use (my wife added this in editing. She’s clearly not over it).

Your ‘garage full of tools’ may be a closet full of clothes or a camera bag full of fancy lenses. Here’s how I broke the habit.

First, I did a full inventory of my garage. I listed every tool, bit, and blade. Then I made a list of all the projects I had either used them for or planned to use them for.

If anything clocked in at less than 5 projects in the next 12 months, I sold the tool. I also applied the same rule to new tools. No clear need? No new tool.

This model can be applied to any item and your threshold and timeline can be modified to address your particular spending issue.

Everyone looking for tips on reducing spending is familiar with the thrill of the occasional splurge. If you try to go cold-turkey and never spend again, your saving may meet an early demise.

Put in the work to save and also allow yourself the freedom to have the occasional spendy-day.

Set specific saving / investing goals and tie it to a specific (and frugal) expenditure. You could go in the reverse direction by committing a specific saving activity to every impulse spend. This method is a little more dangerous as it requires the discipline to follow through with the saving activity AFTER the spend… I would avoid at first until you get the hang of saving.

Motivating yourself to stick to your budget can get incredibly difficult when you’re going it alone. Not everyone has made the choice you have made to focus on saving and investing. They may spend money like water and this can be difficult to be around, especially on your own.

Find a friend or family member who is also focused on reducing their spending and plan activities that help both of you get more bang for your buck. Maybe instead of meeting at the coffee shop you decide to meet on the trail for a hike and bring coffee from home.

Be supportive and hold each other accountable. This doesn’t mean putting your friend on time-out for buying a pair of shoes out of their budget, but it DOES mean reminding them of how much you understand the temptation and how committed you are to both of your successes. Check in regularly and work through the anxiety the comes with changing a behavior like spending.

Even with this amazing e-book in hand, you are going to have challenges amping up your saving and buckling down your spending. This is a skill and you will need to put in work to get good at it. The more effort you put into tasks like budgeting and the more you apply your creativity to redirecting your spending urges, the more successful you are likely to be.

Build a support network of friends and family who understand your goals and the challenges of getting finances on track. Invest TIME in relationships by seeking low-cost activities to spend time together. You don’t need brand new clubs to go golfing or a top-of-the-line iMac to make home movies.

The most important step in this process is getting organized and committing to your goal.

From there, you can try some or all of these suggestions and see what works for you. Progress in saving is easy to see as simple changes in lifestyle and attitude can literally start paying dividends within weeks.

So, what’s next?

The information presented here is for informational and educational purposes only. It does not construe financial or tax advice, nor a suggestion to buy or sell any security at any time. Do not buy or sell the stocks discussed herein. . You assume the sole responsibility of relying on this information at your own risk and we do not endorse any companies or products offered.

The accuracy, completeness or timeliness of the information posted here is not guaranteed. There may be delays, omissions or inaccuracies. All readers should verify the information contained here by other independent sources. At the time this information was published, individuals, affiliates and/or entities associated with or related to management or owners of Shark Invest and accounts managed by them may or may not have held positions in stocks discussed, mentioned, and listed here. These holdings may change at any time for any reason and may be traded contrary or inconsistent with the discussion here. You should assume that we will always immediately sell long positions or close short positions as soon as possible.

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