[drinchev]

My father always says : "saving money is the beginning of being poor".

So I always try to save money by thinking how can I make more. These days money = time is a strong equation, so just don't loose your time and use it in a way to make money.

Stop thinking about saving money and spend your thoughts on revenue stream. That's why I rarely use services like that and don't count the pennies ( I'm neither rich nor bragging )

[kaolinite]

I used to use this excuse to justify ridiculous levels of spending. My time is valuable, etc. It's definitely true for some people but probably not most and certainly not me. Unless you actually are earning more (and saving it too, not just spending it) as a result of this mindset, I'd recommend reconsidering.

[drinchev]

I find it more like a mindset than an actual excuse.

E.g. I want to buy a Tesla and I don't have the money. I say to myself : "Now it's not the time." instead of "Let's save some money!".

If you have millions and you want to buy 10 cars, then I think you have a problem with your ego.

[uola]

I think the point is that it's very easy to convince yourself of the time is money concept when you really just don't want to care about money or want fancier things. While forgetting that money is also time.

[evm9]

Of the two (money coming in and money coming out), you can only restrict money going out so much.

You have your basic expenses you need to live (food, shelter, water), which cost most people at least tens of thousands per year.

If you live miserably only allowing money out to expense those needs, you're still only saving tens of thousands.

You have a lot more ability to increase money coming in than money going out.

I think this is the point OP's father was trying to make. Don't get stuck in a loop of allowing your employer to pay you $xx,xxx (or $1xx,xxx) for decades and restrict yourself for your whole life just to retire old and live an average lifestyle. Take control of your life and control your success.

[patmcc]

Certainly it's good to increase your revenue, but saving money is often much more valuable; a dollar saved is $1.4 earned, assuming you live somewhere with a high marginal tax rate.

[dwaltrip]

Also, frugality reaps increased benefits as the income rises. If one can maintain the same cost of living while earning more money, you end up with huge % increases in discretionary cash that can be used for all sorts of great things: investing, philanthropy, starting a business, saving for future personal projects, travel, etc.

Example: earn $100k, $35k goes to taxes, spend $50k a year = $15k discretionary. Increase income 50% to $150k, taxes become $52.5k, spend the same $50k = $47.5k discretionary. So total income only increased by 1.5, but discretionary increased by a factor of 3. Of course, this is a simplistic example -- tax rates aren't constant for one thing. But the principle is very powerful, and the effect strength grows as the income increases. Using the above numbers, 2x the initial salary results in a 5x increase in discretionary income.

Lastly, this strategy also provides great protection against a decrease in income.

[uola]

Agreed, but there's also a fine line between frugality and being cheap. You should optimize what you get for the money, not lower your quality of life in an unsustainable way.

[dwaltrip]

Of course, all things in healthy moderation. In the end it will come to what one is willing to do personally. But we shouldn't confuse "spending money like my coworkers or peers do" with "maintaining a good quality of life", even if there can be some correlation. I think most people will not have a problem becoming "cheap" (to me this word means: a person who expresses their frugality in a dickish manner)

[charlesdm]

Whenever I've had cashflow problems in the past, for me, spending less was never the solution. Having a good idea (and thus, making more money) always was.

[kranner]

Extrapolating from the past doesn't always work. In this case maybe you are not accounting for future illness or burnout.

[pjc50]

It's great that you can have profitable ideas whenever you need them.

[charlesdm]

The thought of running out of money can often be a great motivator.

[elsewhen]

this is true, but the most you can save is 100%, but earning potential is generally unbounded. if you do not have marketable skills, then saving may be the only way to go, but if you can develop a valuable skillset, you can earn significantly more than you can save.

[kamaal]

Firstly they are not mutually exclusive.

Secondly, though there is no upper limit to how much you can earn it rarely works that way in the real world. People who are not saving money are doing it for many psychological reasons, like being unable to resist the temptation to spend on things. And most of the times they don't like it after they do it.

[Lockyy]

Earning may be unbounded but so is spending. Unless you have a baseline lifestyle that you maintain then any increased earnings will just be eaten by increased spending since you'll already have convinced yourself that saving is pointless.

[fleitz]

The people who spend the least are the poorest. If you we're thinking about putting your money into something worthwhile you'd very likely get a tax credit, also here's the kicker, the most you can get your expenses down to is $0, what you can get your income to is limitless.

[tonyedgecombe]

If you are very poor then clearly doing something to increase your income makes a lot of sense.

For most people on HN I'm not so sure, most roles have a ceiling that is very difficult to get above without moving into upper management or starting your own business. The odds don't look so good then.

On the other hand having some FU money will improve your quality of life significantly. Just being able to say no to that morally questionable feature your boss is asking you to implement or turning down a weekends work when you want to go to a friends wedding has a strong impact on your well being.

Having savings and investments means having choices, having debts imprisons people.

[mseebach]

There's a distinction between "saving money", as in putting it in a savings account, having a nest egg. That is clearly a good thing. The other, which is what the OP is about, is "saving money", as in paying less for things. This is rarely a good investment in terms of the time/happiness/convenience/actual money saved trade-off. A somewhat extreme example is clipping coupons - the cognitive load of planning around saving a few cents on butter is simply not worth it for most people (and also, there's the subtle bias in altering your behaviour to take advantage of an offer). Another saying in the same vein is "penny-wise, pound-foolish".

I know someone who carefully plans and then spreads the weekly shopping trip between up to five different grocery stores -- and also complains that they have too little time. I and several others have tried connecting the dots for them, but it's clearly become an obsession (and needless to say, it's not like they track their spending and saving on this -- just assumes that they are saving loads).

Obviously, there are things that make sense. Of course you should shop around and negotiate for big-ticket items. It might well make sense to alternate weekly shopping trips between two different stores with different strengths (one might be good for fresh produce, but expensive for staples and household goods etc).

> For most people on HN I'm not so sure, most roles have a ceiling that is very difficult to get above without [...] starting your own business

Hacking on a side project is one of the things you could do once you stop spending hours saving dollars.

But, the point is, time is a strictly limited resource. Money has steeply diminishing returns around those ceilings. Stop wasting time saving small amounts of money and spend it getting the most out of your time (whether that's working on your revenue streams, or doing any of a number of activities that makes you happy).

[uola]

"Hacking on a side project is one of the things you could do once you stop spending hours saving dollars."

Hacking on ever recurring side project can also be a huge time sink, especially since projects tend to have a disproportionate reward at the end.

[blfr]

most roles have a ceiling that is very difficult to get above without moving into upper management or starting your own business

Considering we're on a Site Formerly Known as Startup News, starting your own business should definitely be a real option.

[31reasons]

Its been said many times that you should never start startup to make money. The opportunity cost and uncertainty makes its a very risky way to make money.

[mancerayder]

The other one I like is, "You can always make money back, but time you can never get back." My dad said that, and he was poor for a period of time in his youth. He later was an entrepreneur (but not of the tech kind, and not of the rich kind, more the independent kind that had $0 and no job, and later a staff of around 20, in the span of a few years).

I cannot relate to the extreme savings world that isn't necessary. For example, I had a friend who made much more than me but quite enjoyed the 'optimization' or 'life hacks' mentality including reducing his electrical expenses throughout his house, living in a studio, being vegan and finding tricks to spending no money on stuff. He had a system where the farm would deliver (in NYC) organic produce based on what was available seasonally, for a subscription fee, making his food experience cheap. He would sign up to those free loans the banks would give, the ones where they'd send a check and you had no interest for 8 months, and he'd put it in a CD for exactly 8 months to pocket the interest and pay it back. etc. And he made a lot more money than me (and still does).

I can't live like that. On the other hand, I'm not the impulsive/blind spender that needs a wife/husband/'life hacks'/software to keep his spending under control. I'm also a privileged tech worker with a comfortable (but not braggable) income.

[myroon5]

Where can one find these free bank loans? Seems like a good opportunity.

[charlesdm]

Saving money is the beginning of being poor. Investing it, however, is not. You don't actually need a ton of capital to make decent income off of compound interest (capital gains), which is taxed at a lower tax rate (or not taxed at all in some countries). If your money is working for you, you shouldn't have to worry too much about saving on purchases.

That said, a lot of people are completely stupid with money. Some people will try to save money by cutting expenses everywhere and then, for example, proceed to overpay €10-20-50k on a house. Or not negotiate high random fees, ever.

[scotu]

Investing is also not as easy as saving. How does someone goes from no-invesment-knowledge to not-loosing-money in investment (and possibly "decent income off of compound interest")? Just trusting the bank guy?

[charlesdm]

Rule 1: Never trust the bank guy. With the exception of perhaps private banking (though fees are high there), if those people really knew how to make money, they wouldn't be working at a (consumer) bank. They'd raise a $10-20-50m fund and make a killing for their clients and themselves. It's that simple.

Either you go with low fee index funds (i.e. Vanguard S&P500, which tracks the market and will require the least amount of effort) or you learn about investing by putting in the time to understand things properly (which might lead to higher returns but can take a lifetime).

[superdog683]

one can spend end less amounts of time on "investing"

i like macro-economics and treat it as a hobby.

others that may have little interest in the subject could take a simple route.

25% gold/silver 25% blue chip dividend or index fund 25% property or rental 25% in your business or hobby, if you spend/invest in what you know and like will usually do well same with work do what you have passion and ability=success

if #3 and 4 dont apply just put 20% gold/silver and 80% in 10 different good dividend paying blue chip. why gold and silver?? because inflation protection against fiat currency. another note now not the time to by stocks, now is time to sell. buy after next correction.

[scotu]

bank guy: I somehow suspected that

thanks

[markdog12]

This is a great book, Four Pillars of Investing - https://www.amazon.com/Four-Pillars-Investing-Building-Portf...

[scotu]

thanks

[lukego]

You could consider the Bogleheads investing start-up kit: https://www.bogleheads.org/wiki/Bogleheads%C2%AE_investing_s...

[tamana]

I see you are in Europe. In USA it's overpaying $100K-$500K for a house.

[vthallam]

I believe this too and most of the tech people do that i guess, since they their skills are in demand. But there are millions of people who have standard revenue streams and not everyone can be entrepreneurial in finding new ways to make money than worry about pennies. These apps are aimed at those, showing people who they are wasting money and also ways to save it.

[kamaal]

With all due respect to your father but that is seriously very bad advice.

It's almost impossible to fill a container leaking all the time.

Also make note a lot of people have gotten rich by saving and investing than have people who went into doing start ups or 'revenue stream' or such.

[UK-AL]

It's good advice, but it can be misinterpreted. You either spend 3 hours cutting coupons every few days or you can spend three hours learning new tech or gaining a qualification or going to meetups. Spending some money on books/taxi's etc to do so.

The best payoff is spending the money. However there is a "poverty" mentality where people would be scared of spending that money. You need to avoid that.

On the other hand you could buy a gimmicky fancy tv or keep your decent old one. Obviously just keep your old one.

Just optimise for the best expected payoff. For that you require a mix of saving, and spending.

[superdog683]

i think its a good point too much time spent saving money is wasted time. my rule of thumb is can i save more that i get paid at work?? so if you get paid $100/hr. you can clip coupons 3 hours and save 20 bucks or stay at work 3 hours and make $300 i am a dyi person but if i can pay someone to do the job less than my pay i just work extra hours and hire that person.

[shoo]

I think a good distinction is hinted at in your last line "optimise for the best expected payoff". This form of spending is perhaps better termed investment.

[Havoc]

A mix is the optimal approach. Investing some time into cutting the low hanging fruit on the expense side is certainly worthwhile.

People just take it to far...you can only cut thing so far before it screws up your lifestyle so yeah after cutting the obvious its about more revenue as you say.

[d4mi3n]

100% agree with this, though I've seen it worded differently.

Rather than worrying about optimizing spending I find it much easier to maximize my earning potential. Negotiating a better salary will often net one more money over time than chasing coupons.

[readme]

I'm sure your dad has a lot of money and all, but saving money works pretty well for most people.

[iofj]

Look at the interest rate. Now look at inflation (not "core" inflation, the one you pay). Saving, money in bank, is not a good investment atm. Or put differently, it's at best as good as gold bars under the bed.

[readme]

So yes, you not only have to save the money. You need to invest it.

I was not going into explicit detail, but pontificating on the idea of saving as opposed to spending.

With that said, one of my banks offered me a 3.00% APY on a CD the other day. Still not really enough for me. I would prefer to throw the money in index funds and wait longer.

[nstart]

I like to approach this from a perspective of if I save y many hours by buying some service or product, then if my time is valued at x per hour, am I making a profit? Once that is considered I also consider if I can make that money back. So instead of cleaning the house myself, I might hire a team to come do it. During the time they are cleaning my goal is to do some kind of work that helps me earn that money back ideally.

There was a time I bought a Mac book pro. I felt it would save me developer time and focus compared to my old HP laptop. So I set out to earn that money back in 6 months (did it in 4). I feel like this complete approach helps.

[duckingtest]

That would be a very bad advice to Michael Tyson or every other athlete who went bankrupt after spending hundreds of millions.

[the_watcher]

Great. The question was "what is the your favorite way to save money?", not "what's the best way to increase my net". The two ideas of increasing income and saving money are by no means mutually exclusive, you should answer the side that he asks for.

[hacknat]

I agree, I have a set amount of money that comes out of my accounts to go to my retirement account (well over 10% of my income), but it is my only abstract use of money. I really don't care where my money goes after that. I obviously use some of the rest to shelter, feed, and clothe myself, but the surplus gets spent (I have a 3 month savings reserve that I will replenish if I ever have to tap into it), other than that, what should I be saving money for exactly?

[SixSigma]

Why not both?

A penny saved is a penny earned.