The Single Most Important Money Saving Tip

Editor’s note: over the next few weeks I’ve invited Jason Steele, friend and freelance writer, to contribute some of his ideas for handling your finances, making the most of your travel, as well as some advanced credit card rewards strategies. Here’s Jason…

Money Saving TipIf you have read many personal finance articles, you have probably seen no shortage of lists.

Grabby titles like “10 Ways To Save Money Right Now!,” and “16 Things Your Are Wasting Money On” are the staple of this genre.

I should know. As a freelance writer, I have written well over 1,000 articles on this subject for many of the top personal finance sites on the Internet.

Yet for all the great tips and tricks I discover, there is still a single personal finance strategy that I apply to nearly every decision that I make: Cut my monthly expenses by thinking long term.

The Idea Behind This Money Saving Tip

Within the field of personal finance, my specialty is in credit cards. Every time you receive a credit card statement, you have the choice to pay it in full or to pay some lesser amount that is at least the minimum balance.

When you choose to pay anything other than the entire balance, you are deciding to spend more money in the long run in order to pay less immediately. So important is this decision, that I can usually learn everything I need to know about how someone manages their finances just by asking if they always pay their credit card statement in full.

Yet the benefit of paying more now so that you pay less in the end is not just a reduction in costs – you also gain an incredible degree of flexibility. Each time that you commit to making payments each month on anything, you are committing your discretionary income long before you have earned it.

Not only will these decisions be devastating to your budget, but they will destroy your ability to adapt to unforeseen circumstances such as injuries, illnesses, and job loss. In fact, the only things that I will pay interest on are appreciating assets where my interest payments are tax deductible. This includes my mortgage, student loans, and nothing else.

How To Apply This Money Saving Tip

Always paying your credit card balances in full is Personal Finance 101, but how can you apply this philosophy to other areas of your finances? Allow me to revert back to the standard format and offer you “The 3 Best Ways To Cut Your Monthly Expenses By Thinking Long Term.”

1. Maximize energy efficiency. Buy compact florescent light bulbs, upgrade your home insulation, and install a programmable thermostat. All of these steps will cost a little now, but cut your monthly expenses in the future.

2. Don’t take a car loan. Like incurring credit card interest, paying a car loan is just another way to pre-commit your future income to a monthly payment. Quality used cars can be found at nearly any price level, and when you eliminate your monthly payment, you can use that money to save for your next vehicle.

3. Slash telecommunication costs. Cut your cable and go with Internet services and over-the-air digital TV. Get a Voice Over IP (VOIP) landline. Go in on a family plan for your mobile phone, and downgrade your Internet service to the least expensive tier (you won’t notice the difference). And for heaven’s sake, don’t rent a broadband modem for $7 a month when you can buy one on E-bay for $20!


These are three good examples of ways to cut monthly expenses by thinking long term, but it is the principle that is important. Every financial decision you make should be in conjunction with this philosophy.

By taking the time to consider the ultimate costs of every decision and reducing your perpetual monthly payments, you can save money while ensuring a less painful recovery when the unexpected occurs.

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About Jason Steele

Jason Steele is a travel and credit card expert. He contributes regularly to The Points Guy and a variety of notable travel and finance publications. Jason lives in Denver and enjoys traveling with his family and cycling. Follow Jason on Twitter @realjasonsteele.


  1. JakeAThompson says

    Great comment. Its true that if you don’t pay it off now, your already allocating those dollars to something in the future, and more of it. Thanks!

  2. pay off debt says

    Very effective if we applied in our regular life.Money Saving I use coupons, tv on the net, DVDs from red box.. nothing to special. I do buy food in bigger bulks then package them for later use such as meat I buy the family pack but their are only 2 adults in my family so I wrap the meat in wax paper in 1lb packages and freeze them.I make my own baby food (for her health rather then price even though it is cheaper) I shop at farmers markets because the food is a LOT fresher and a LOT cheaper.

  3. I see what you mean about thinking long term, but sometimes thinking long term means doing the opposite. For example, I did take on a car loan, very recently. My old car (a 1996 Oldsmobile) had finally died, and it was time for a new one. Despite saving, I only had $2500 saved up for a replacement car. But I was able to get 1.99% financing for a new-to-me used car.
    The key is not to go nuts. I could have bought a brand new or flashy car and given myself a car payment I couldn’t afford. Instead I bought a 2004 Toyota, that’s in great shape, and used all the money I had saved for a down payment, so that I have a reasonable monthly payment on the car. And you really can’t beat that 1.99% interest rate.

    • CheckAdvantage says

       @stephonee Good point. Because buying a super-cheap used car could be a pretty big risk, right? What if it bites the dust in a year and you’re out your savings? IMHO, there could be other times when you can justify a reasonable monthly payment for a short term.
      For instance, If you’re confident a purchase will help you MAKE money, it might be a good idea. But any money you make as a result of that purchase should be used to pay down your debt first.