A few things I’ve learned over the years about saving money

  • No matter how low something is on sale, buying nothing is cheaper. The quickest way to save money is not to spend it — to mostly buy what you need, and rarely/barely buy what you want.
  • Anything that is likely to depreciate in value over time is probably a bad investment (e.g., cars, electronics, furniture, etc.), and should be minimized.
  • Regularly using a credit card, only if you pay it off every month, seems to increase one’s credit rating. Leaving unused credit cards open with a $0 balance also seems to be good for one’s credit rating.
  • When considering whether to buy or rent a home, don’t forget to consider the costs of mortgage interest, property taxes, property insurance, condo/HOA fees or maintenance, improvements, and the time required to sell it (could be many months or years). There is often a net loss over time, when investing in a house or condo. Renting a small place may be cheaper than buying.
  • At least in the US, the stock market tends to outpace inflation over the long-term. Choosing some funds that invest in mainstream companies, and just letting the money sit there for years, usually beats inflation and offers much better capital appreciation than savings accounts or CDs at banks.
  • As Warren Buffett recently showed, usually the way to make the most in the stock market over the long-term is to invest in index funds, but the most profitable index funds require that one values profit over ethics (i.e., include investments in war, oil, animal testing, tobacco, etc.). Socially responsible investment (SRI) funds usually make less, but may be more ethical. Probably the most ethical thing is to continuously do your own research of, and investing in, individual companies, but few people have time for that. I wish there were Buddhist SRI funds available in the US (if you know of any, please let me know).
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