Ask HN: What's your favorite way to save money?

Re:Ask HN: What's your favorite way to save money? by dwaltrip on Wednesday July 13, 2016 @03:10AM (#12084403)

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.

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Re:Ask HN: What's your favorite way to save money? by uola on Wednesday July 13, 2016 @06:59AM (#12085241)

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.

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Re:Ask HN: What's your favorite way to save money? by dwaltrip on Wednesday July 13, 2016 @11:27AM (#12086916)

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)

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