[{"@context":"https:\/\/schema.org\/","@type":"BlogPosting","@id":"https:\/\/rkillen.ca\/how-to-save-money-on-recurring-expenses-with-the-cash-flow-cookbook\/#BlogPosting","mainEntityOfPage":"https:\/\/rkillen.ca\/how-to-save-money-on-recurring-expenses-with-the-cash-flow-cookbook\/","headline":"How To Save Money On Recurring Expenses With The Cash Flow Cookbook","name":"How To Save Money On Recurring Expenses With The Cash Flow Cookbook","description":"How To Save Money On Recurring Expenses With The Cash Flow CookbookWatch this video on YouTube In this episode of The Glass Is Half Full,\u00a0Richard Killen, a Licensed Insolvency Trustee interviews Gordon Stein, author of The Cash Flow Cookbook. Gordon is a keynote speaker and a writer with a passion for helping people build financial […]","datePublished":"2020-02-05","dateModified":"2023-04-13","author":{"@type":"Person","@id":"https:\/\/rkillen.ca\/author\/adrian\/#Person","name":"Adrian","url":"https:\/\/rkillen.ca\/author\/adrian\/","identifier":11,"image":{"@type":"ImageObject","@id":"https:\/\/secure.gravatar.com\/avatar\/83c9d81e4aa2dc5936e06b9059fd4e195f1f91bcd60ccfc5e28f98dd86bae8b8?s=96&d=mm&r=g","url":"https:\/\/secure.gravatar.com\/avatar\/83c9d81e4aa2dc5936e06b9059fd4e195f1f91bcd60ccfc5e28f98dd86bae8b8?s=96&d=mm&r=g","height":96,"width":96}},"publisher":{"@type":"Organization","name":"Richard Killen and Associates","logo":{"@type":"ImageObject","@id":"https:\/\/rkillen.ca\/wp-content\/uploads\/2016\/08\/landscape-logo-12345-for-web.png","url":"https:\/\/rkillen.ca\/wp-content\/uploads\/2016\/08\/landscape-logo-12345-for-web.png","width":600,"height":60}},"image":{"@type":"ImageObject","@id":"https:\/\/rkillen.ca\/wp-content\/uploads\/2020\/02\/how-to-save-money-on-recurring-e.jpg","url":"https:\/\/rkillen.ca\/wp-content\/uploads\/2020\/02\/how-to-save-money-on-recurring-e.jpg","height":720,"width":1280},"url":"https:\/\/rkillen.ca\/how-to-save-money-on-recurring-expenses-with-the-cash-flow-cookbook\/","video":{"@context":"http:\/\/schema.org\/","@type":"VideoObject","@id":"https:\/\/www.youtube.com\/watch?v=ZI8nsoTTqN4#VideoObject","contentUrl":"https:\/\/www.youtube.com\/watch?v=ZI8nsoTTqN4","name":"How To Save Money On Recurring Expenses With The Cash Flow Cookbook","description":"https:\/\/theglassishalffull.tv\/how-to-save-money-on-recurring-expenses-with-the-cash-flow-cookbook\/ In this episode of The Glass Is Half Full, Richard Killen, a Licensed Insolvency Trustee interviews Gordon Stein, author of The Cash Flow Cookbook. Gordon is a keynote speaker and a writer with a passion for helping people build financial wellness.\n\nIn this episode, Gordon outlines how to save money on recurring expenses such as car expenses, pet services, alarms, transportation and more. Forget about budgeting and concentrate on building wealth and net worth, even if you are living paycheck to paycheck. \n\nIn the interview they cover the following:\n\u2022 How A $13 Car Wash Started A Book\n\u2022 How to Save Money on Monthly Recurring Expenses\n\u2022 Budgeting Does Not Work, Tracking Wealth Does\n\u2022 Focus On The Positive\n\u2022 Changing To LED Lights Can Add 25K to Your Retirement\n\u2022 Strategies For Those Retired On A Fixed Income\n\u2022 Saving Money On Glasses and Pets\n\u2022 How To Save On Clothing\n\u2022 Saving To Pay Down Debt Or Invest\n\u2022 Saving Money With Minimal Sacrifice\n\u2022 From Zero Savings To 10K per Year\n\u2022 What Is the First Step To Take To Get Out Of Debt\n\nContacts:\n Gordon Stein\n gord@cashflowcookbook.com\n 416-276-8078\n https:\/\/cashflowcookbook.com\n\nSpeaker and author of \u201cThe Cashflow Cookbook\u201d\n\n\n Richard Killen & Associates Ltd Scarborough West\n https:\/\/www.g.page\/killenscarboroughwest\n Licensed Insolvency Trustee and Licensed Consumer Proposal Administrator\n 2130 Lawrence Ave, E  #402, Scarborough, ON M1R 3A6, Canada\n Tel: +1 416-285-9511\n https:\/\/rkillen.ca\n Personal bankruptcies, consumer proposals and debt counselling. \n Contact us for a fresh start (888) 545-5365\n This may be the most stress-relieving call you will ever make!\n\nRichard Killen and Associates have 10 locations across the Greater Toronto Area.\n\nThe Glass Is Half Full\nTo be a guest on the show, please visit https:\/\/theglassishalffull.tv\/be-a-guest\/","thumbnailUrl":["https:\/\/i.ytimg.com\/vi\/ZI8nsoTTqN4\/default.jpg","https:\/\/i.ytimg.com\/vi\/ZI8nsoTTqN4\/mqdefault.jpg","https:\/\/i.ytimg.com\/vi\/ZI8nsoTTqN4\/hqdefault.jpg","https:\/\/i.ytimg.com\/vi\/ZI8nsoTTqN4\/sddefault.jpg","https:\/\/i.ytimg.com\/vi\/ZI8nsoTTqN4\/maxresdefault.jpg"],"uploadDate":"2020-02-05T17:35:10+00:00","duration":"PT28M43S","embedUrl":"https:\/\/www.youtube.com\/embed\/ZI8nsoTTqN4","publisher":{"@type":"Organization","@id":"https:\/\/www.youtube.com\/channel\/UCBnlR4W4vfP3HN-fTV8pH8g#Organization","url":"https:\/\/www.youtube.com\/channel\/UCBnlR4W4vfP3HN-fTV8pH8g","name":"The Glass is Half Full","description":"Richard Killen is a Licensed Insolvency Trustee who has seen first hand many people struggle with debt and the stress that financial problems generate. Many families are living paycheck to paycheck and this weekly show is all about helping people in this community with little or no money to do more with less.\n\nIn this show, Richard and his guests will share their expertise and share their stories. Some topics may include:\n\nHow to get out of debt\nHow to reduce stress caused by financial problems\nHow to buy products and services for less\nVarious ways to save money\nHow to enjoy life and have fun with little or no money.\nInexpensive vacations\nPeople sharing stories on how they overcome obstacles\n\u2026 and endless other topics\nThe show is an interview style talk show that is filmed locally in Toronto or via Webinar for guests that are from outside of Toronto.","logo":{"url":"https:\/\/yt3.ggpht.com\/ytc\/AIdro_nNWVcqPrZwGj4XwfnZ4zMT-Dm31Nb9WA0WhjYioTpT2A=s800-c-k-c0x00ffffff-no-rj","width":800,"height":800,"@type":"ImageObject","@id":"https:\/\/www.youtube.com\/watch?v=ZI8nsoTTqN4#VideoObject_publisher_logo_ImageObject"}},"potentialAction":{"@type":"SeekToAction","@id":"https:\/\/www.youtube.com\/watch?v=ZI8nsoTTqN4#VideoObject_potentialAction","target":"https:\/\/www.youtube.com\/watch?v=ZI8nsoTTqN4&t={seek_to_second_number}","startOffset-input":"required name=seek_to_second_number"},"interactionStatistic":[[{"@type":"InteractionCounter","@id":"https:\/\/www.youtube.com\/watch?v=ZI8nsoTTqN4#VideoObject_interactionStatistic_WatchAction","interactionType":{"@type":"WatchAction"},"userInteractionCount":21}]]},"about":["Financial Advice","Interviews","Videos"],"wordCount":5593,"articleBody":"How To Save Money On Recurring Expenses With The Cash Flow CookbookWatch this video on YouTubeIn this episode of The Glass Is Half Full,\u00a0Richard Killen, a Licensed Insolvency Trustee interviews Gordon Stein, author of The Cash Flow Cookbook. Gordon is a keynote speaker and a writer with a passion for helping people build financial wellness.In this episode, Gordon outlines how to save money on recurring expenses such as car expenses, pet services, alarms, transportation and more. Forget about budgeting and concentrate on building wealth and net worth, even if you are living paycheck to paycheck.RichardSo today we’re joined by Gordon Stein Gordon, and I’m going to read this to get it all right because there’s a lot here to talk about. Gordon is a keynote speaker and writer with a passion for helping people build financial success. Canadians are struggling with high levels of personal debt and higher levels of stress over money. In his book The Cash Flow Cookbook, he shares dozens of low effort and low sacrifice ideas that can free up cash for paying down debt, investments, savings. Applying these simple recipes can build millions of dollars worth of incremental wealth over a typical career, which I find pretty impressive. So, Gordon will share some of these strategies with us today. And I understand you should probably grab a pen and paper here so you could make notes. Welcome.GordonGood to be here. Thanks so much, Richard.RichardIn your in your book. It’s called Cash Flow Cookbook. I’ve got it right that you have 60 strategies, but like any other good book, you don’t call\u00a0them\u00a0strategies. You call\u00a0them\u00a0recipes, right?GordonRight.RichardAnd they’re all designed to save money in one form or another.\u00a0So\u00a0I understand this was written after a conversation you had with a friend about a $13 car wash, and I think I’ve run into that same car\u00a0wash.\u00a0I’m intrigued to know how this led\u00a0to your book.GordonWell, I had no intention of writing\u00a0a book until this incident happened. Like many things in\u00a0life\u00a0it sends\u00a0in a very different path. And I was driving a friend home from a barbecue, and he spotted a $13 car wash\u00a0receipt on the console of my car. And he, you know, berated me for it. So why would you spend $30 on a car wash? I said, Well, you know, I’m not going to wash\u00a0my car with my suit on. I said\u00a0you know, what do you recommend? Well, at the time\u00a0he said why don’t you go get an Esso extra points card? And you put that on the pump before you put in your credit card. And then you track your points online, you fill in a form and you take it\u00a0in and\u00a0you get a free car wash. So I thanked him for the idea, dropped him off, and I made sure I was down the road. I thought to myself, This is the silliest idea I’ve ever heard of to go through all this for $13. And in a couple weeks later, someone had one of the little Esso\u00a0speed past dongles. They touch it to the pump, easier than a credit card, automatically tracks their points and they get the free car wash.\u00a0That is ok,\u00a0that’s cool, because it’s actually easier to pay for the gas, so I haven’t actually paid for a car wash in four years. Not a huge thing, you know, $25 a month. I thought well\u00a0I wanted to get one for\u00a0my spouse. So now, it’s $50 a month. And then I heard the idea on a radio ad for one of these discounted home alarm monitoring systems. So I compared and it was\u00a0$25 a month cheaper. So now I’m up $75 which isn’t a huge amount of money, but none of this took any effort. I started to wonder what else is there and, you know, my background\u00a0in engineering and an MBA. You know, I got focused and made\u00a0a spreadsheet. Before I knew it I had 120 Ideas. I\u00a0set a minimum of $25 and in\u00a0total there’s $13,000 of monthly savings. So that’s really how it got started.RichardThat was an interesting car ride.GordonIt was\u00a0for sure.RichardI have one of those speed passes too. I’ve never been that smart about it yet. I think I’m gonna learn a lot here today.\u00a0The driving principle behind your book Gordon is that those, even those\u00a0living\u00a0paycheck to paycheck haven’t got what they think to be any spare money floating around can reduce their spending, but with minimal sacrifice. And they could use the money. Then, of course, to\u00a0do like you just described. All of a sudden there’s a $50 free hasn’t gone out. It’s still in your pocket kind of thing, right? Can you give us any other examples\u00a0and why this is possible?GordonWell, I think the thing is really what I learned in the book and doing the research. It’s all about recurring monthly expenses, and these are things that are coming out of your chequing\u00a0account every month, typically\u00a0there on pre-authorized\u00a0payments. You set something up. Maybe it’s a gym membership. It’s a storage locker, and these things just keep coming out. You sort of take that\u00a0as your new normal. And if you’re in a situation where you’re in debt or you’re headed for insolvency, you need some help. Certainly go see a professional such as yourself, Richard, but what can you do in the meantime, to prune down that monthly spend to get out of this thing where your\u00a0living paycheck to paycheck and you’re struggling, and most people are in that situation, but they really haven’t taken a good look at their expenses. So you know, some examples would be things like storage lockers. You drive\u00a0typically in the suburbs, and people have\u00a0their garage doors open and they’re filled with stuff. And the storage locker business as an example, is booming because people just won’t prune down the stuff that they’ve been saving. Their spending\u00a0$100, $200 or $300\u00a0a month on a storage locker somewhere. So pretty obvious point here is let’s go through Marie\u00a0Kondo style. Now let’s prune out\u00a0all that get the stuff back in our houses and save on the storage locker. So whether it’s in the book, the recipes, everything from thoughts on dining out and how do you\u00a0reduce\u00a0those costs. Ideas on housing, ideas on transportation. So 60 in total. There’s actually a little anecdote of the beginning, adds another 60. So actually towards 120 ideas that go from about $25 a month to $200 to $400 a month. And the idea is anyone can start today and start to free up that cash and apply it to paying down debt. If\u00a0debts your\u00a0issue. Or if you’ve got some savings, you’ve got some net worth. Let’s apply more to investment to build and grow that well. Also, we don’t have to worry about money.RichardIn your book.\u00a0 You very clearly don’t believe in budgeting, as such. Your approach is really,\u00a0They can do rather can’t do approach. Budgeting tends to be restrictive. Somehow you cut back with budgeting.\u00a0You have a tendency to think that way? What you’re doing really is talking about spending smarter. We’re getting a lot more for whatever it is that you are spending.\u00a0\u00a0So is it psychological?\u00a0Is this the intent behind this?GordonYeah. Well, first of all, I’m amiss. I didn’t give you cash\u00a0flow cookbook.\u00a0So my apologies.RichardYou came armed?GordonSo yeah, the budgeting is interesting. You know, if you think what you want to do, you’re driving your car.\u00a0And you don’t want to go too fast, you look at the speedometer, you want to lose weight, you look at the scale. So if you want to build wealth and building wealth includes getting out of debt. You know, even if your goal is to get up to zero or to be less in debt. What are you trying to do? Well, you’re trying to\u00a0increase your wealth. Maybe it’s been going from negative $200,000 to negative $50,000 maybe going from 0 to $100,000. But what do you want to look at? You want to track your wealth, not your budget. Because if you think about it, you could set a budget. You can follow your budget every month for your entire life and retire.\u00a0And not have enough money. So far smarter, I think, is the whole core of Cash Flow\u00a0Cookbook. And let’s get\u00a0it out of the\u00a0closet. Let’s dig out the bills. Where you at right now? What is your actual wealth position? Some people call it net worth position, so let’s take everything that we own.\u00a0Let’s subtract everything that we owe, and let’s say, Hey, how much wealth do we have? And some people say well I can’t do that because it’s negative. I’ve got student loans, so whatever the number is, let’s actually understand that number.\u00a0And I want to see how we do month after month. I think that is a critical step for people because then they can see. Am I better off in September than I\u00a0was in August.\u00a0\u00a0And am I tracking\u00a0better in October than\u00a0I was in September? Are\u00a0you increasing that wealth by $50. Increasing it by $500 or $5000? Is it\u00a0moving in the right direction? So you’re building some wealth. I think with budgeting particularly in the case of a couple, It’s gonna lead to\u00a0arguing.\u00a0, Oh, you blew\u00a0you’re a part of the budget. Why’d you spend so much? But then things happen. The kids need new hockey gear. Well, that wasn’t in the budget. I think it’s an artificial approach. When you track your wealth, you start making smarter decisions about everything that you do in your life.RichardYour way of understanding it is you’re focusing on the positive rather than a negative.\u00a0Right? Coincidentally,\u00a0Let’s see your book again?GordonYeah, sure.RichardI’m going to show you my book too.\u00a0\u00a0But I think that in it we talk about a very similar type of thing. I’m talking about an approach, the mindset if you want. In mine, it’s called, The\u00a0Glass\u00a0Is\u00a0Half\u00a0Full, the positive side of debt relief.\u00a0And the person could\u00a0say, Well, what’s the negative side of debt relief? And I’m not sure that anybody knows the answer to that one\u00a0as such.\u00a0But what I meant by it was very similar to what you’re talking about. That the\u00a0people who get into trouble tend to allow the trouble to define them\u00a0and it tends to constrict\u00a0them and restrict them. My idea is that they should be taking with the right attitude,\u00a0they can take that and turn it into that opportunity. Okay, that starts thinking forward. And what you’re describing seems to be all about forward steps rather than looking\u00a0to see if there are negative steps.GordonWell, I think that’s it exactly. I’ll give you a really basic example from the book. One of the simple recipes really makes the point you can start today. So the average Canadian or\u00a0American they retire with about $200,000 of net worth. That’s the average, not a very big number, $200,000 a lot of money, but not if you have to live on it for 35 or 40 years with inflation. So here is\u00a0a very simple example. If\u00a0you\u00a0went to Home Depot everybody can do this. You buy a 10 pack of led light bulbs. You replace the 10 most\u00a0used\u00a0lamps\u00a0in your house. You’ll save about\u00a0$20 or $25 a month on electricity.\u00a0The side\u00a0benefit of being a little bit more green. Now, over a\u00a030-year\u00a0career, you’ll end up with $25,000 more net worth. So it’s about 1000 times a monthly amount, compounded over the period of time by the through debt reduction of investment. So there’s $25,000. That’s more than a 10% increase in the Net worth you retire with for the average Canadian or American with a 15 minute trip to Home Depot. So there’s a very simple example.And, yeah, you know, maybe, let’s say it’s 10 light\u00a0bulbs, so very simple. But what are all those other things to do? So we literally in a day or two, you know, taking a look at your cell phone bill, you know, taking a look at different things.\u00a0Clothing\u00a0expenditures. The book is chock full of these ideas, and would everyone use all $13,000 worth of monthly savings? No, because people don’t typically spend that much.\u00a0But could you get a handful of ideas to free up? Let’s say, $200 a month. If you could free up $200 a month and put that to good use. I.E.\u00a0paying down debt or investing it wisely\u00a0in\u00a0blue-chip\u00a0kinds of things. You’re gonna retire with another $200,000. You’re gonna double the average Canadian or American. So, you know, to me, that’s what it’s all about. These are simple, simple steps.RichardOver what period of time are you seeing this?GordonI’m using the example of 30 years. People go for 30 years? Well, you know what, when you\u00a0think about it. You know, I worked in the corporate world for 35 years. I still have lots of energy to go. Hopefully, statistically,\u00a0I’ll\u00a0live another 30 years. So I’ve got the same opportunity in the whole road ahead of me. Sometimes I have people who say, Well, I’m retired\u00a0I’m\u00a071. How does this help me? Well, it helps because they probably have a fixed amount of money that they’re working with. So now it’s not about producing debt. It’s probably not about building wealth. It’s about lowering that monthly burn rate, still beneficial for them to make them more comfortable about making ends meet.RichardYou mentioned the age factor\u00a0in\u00a0all this. In my business, I see\u00a0more and more\u00a0I suppose, because my generation, the baby boom generation. There’s not a lot of people out there who have gone through the working period and now of course their in\u00a0retirement. But things haven’t changed\u00a0for them in\u00a0the way they live their lifestyle. If you want\u00a0and all that. So,\u00a0if you take what you’re talking about, having these positive approaches is to doing something more efficient with this and more effective with that and so on. When you get into this period here now there, they find themselves in a position where there’s not that much leeway anymore. So\u00a0they\u00a0find\u00a0themselves\u00a0much more\u00a0restrictive. What do you tell these people?GordonWell, again, I think it’s just about being a little smarter and not giving up anything at all. So,\u00a0I’ll give you an example. \u00a0I needed a new pair of glasses, so I went to the optometrist in the neighbourhood and, you know, sized it all out in a few different pairs price range was about\u00a0$600 to $800.\u00a0For a pair of glasses. Progressives, you know,\u00a0coated lense,\u00a0whatever. It’s kind of a lot\u00a0of money so, you know, I could have just bought them,\u00a0\u00a0not that big of a deal, but it’s\u00a0a chunk of money.RichardThat would’ve been the easy thing.GordonThere’s\u00a0Bob’s\u00a0optometrist, There just down\u00a0the mall. I’ve driven by them 100 times. So I did a little bit of online research. How long did I spend? Maybe an hour. So then I looked at some of these online glasses places, so I already had my detailed prescription from my\u00a0optometrist. So ended up with a great pair of glasses from one of the online providers. $109\u00a0I spent\u00a0and there fabulous.\u00a0 The lenses are great. They’re exactly the prescription that came in the mail. I didn’t have to get leave my house. I didn’t get in the car,\u00a0they delivered right to my door. So you might not have\u00a0thought about that.\u00a0I give you another one.\u00a0Our dog needed to get spayed.\u00a0A 15-pound dog.RichardDid you ask his opinion?GordonNo, I didn’t, hers. So anyway, you know, we looked at the neighbourhood veterinarian $1500, no problem they can\u00a0spay the dog. And that’s great. So it’s the dog getting spayed, you know? And so I thought\u00a0just\u00a0before we do this for $1500,\u00a0 I called a\u00a0friend. What did you pay for your dog’s\u00a0spaying?\u00a0He said about $800,\u00a0 and\u00a0a different\u00a0neighbourhood and in a way,\u00a0I thought that’s pretty interesting. Half the price to get the dog spayed. Call the second friend. One more phone call, another 10 minutes and\u00a0he says well, actually had mine, I spent about $800 but a friend of mine had it done at the Humane Society. I thought, Well, that’s interesting. So I called them up.\u00a0Yep. We do the spaying. How much? $150.\u00a0So you had to call in on the second Thursday of the month. It’s\u00a0like a phone lottery. Um, and you know, you burn\u00a0an hour\u00a0on the phone call, but who makes $1500 an hour, right?\u00a0$1350\u00a0or whatever. Anyway,\u00a0the dog gets\u00a0spayed. So just those two things. Nothing changed in the lifestyle,\u00a0the dog still got spayed. Dogs perfectly healthy. He’s fine.\u00a0Got a great pair of glasses, but the total of all that was, you know,\u00a0$250 versus what would have been, you know, $2300. What was it? Half an hour’s worth of calling around. So just getting a little bit smarter for a retiree getting a little bit smarter on each thing they do. A\u00a0little bit of calling around a little bit of research.RichardSo when you\u00a0speak to large groups. I don’t know why this is common to large groups, but when you do speak\u00a0to\u00a0large groups, the subject of clothing comes up when you’re talking about managing the household expenses. I’m intrigued by that, why\u00a0clothing?GordonWell, it’s been fascinating. It was\u00a0one of the things I learned as I did the research on the book. I started with a few ideas of things I saw then\u00a0really dug in to find out what the other ways of people can free up some cash flow for investing\u00a0or debt repayment. And the clothing\u00a0one is fascinating because the research shows over and over again.\u00a0People only ever wear\u00a020% of the clothing that they buy and when you\u00a0serve that up to people\u00a0they go, no no,\u00a0that’s not the case at all. But I’ll tell you, when you go if you watch\u00a0Marie Kondo with her tidying up show. And you\u00a0see her on TV and she’s on\u00a0Netflix\u00a0pulling these huge garbage bags of stuff out of people’s homes to give away to charities and what have you. And the bulk of\u00a0this is\u00a0clothing. And what happens is, you know, people sort of tend to go shopping and they see a blue sweater. Oh, it’s on sale, and so they quickly grab it. And off they go when they get home and not realizing they have four other blue sweaters because they weren’t, you know, shopping mindfully, there were just shopping. So they found this. Please, let’s say the blue sweater is a little bit baggy, so, you know, you go in the closet when you’re gonna be on an interview, you’re gonna go have an important meeting. You don’t get the ugliest thing out of your closet. You don’t get the baggy sweater, you don’t get the pants that are too short or the one with the sleeves\u00a0that are too long. You always\u00a0put on your best stuff. This\u00a0means the other 80% which we shop for not mindfully, tend to sit in the back of the closet. So if you combine that, you take a look at the average. Canadian\u00a0expenditure on clothing tends to be\u00a0around\u00a06% of the gross income. So someone, let’s take someone making, say, $70,000 a year. 6% is $4200. Call it $4000 but they’re only gonna wear $800.20%,\u00a0$800 which means $3200 a year of after-tax incomeRichardSits in the closet.GordonIt sits in the closet, and then it gets sold in the yard sale for about five cents on the dollar. If you’re lucky before the hagglers come.RichardOr given away to Value VillageGordonOr given away to Value Village, which is great from a charity perspective.\u00a0But, you know, maybe you want to get a tax receipt for your $3200 contributions. If you think about that person, so let’s just change that up a little bit. Let’s shop a little bit more mindfully. You know, you’re\u00a0brown belt buckle breaks. Maybe get it repaired. Maybe you want to go buy a new brown belt to replace the one that you lost. So that’s great. So now you’re shopping much more mindfully, but you could double you’re spending on the clothing\u00a0that you’re actually gonna wear going from\u00a0$800 to $1600. That now\u00a0frees up your going to have $2400 a year freed up now. So twice as much clothes and $2400 freed up. What do you do with it? You pay down debt if you’ve got debt to pay down instead of paying interest on it or maybe getting invested in an exchange traded fund.RichardYou’re not the first person who’s been on our show talking about paying down debt.\u00a0Truth is, I do a lot of talking about that too with my customers. But,\u00a0talk about that if you would please. The idea of paying down debt. Maybe you can quantify or make it a little bit more real to people. How much this really helps.\u00a0What’s the advantage?GordonYeah, I think what happens is again. We’re not mindful. So we tend to just go when we buy and we go to restaurants and actually think about what’s happening. But if you’re in a situation where you\u00a0owe some debt, I think the first thing is to get it out on the table. How much do you owe? And people tend to have 3, 4, 5\u00a0credit cards. They’ve got Banana Republic,\u00a0Canadian Tire. This one has a discount on that. So they get talked\u00a0into these things and they might have five of them. And some\u00a0cards\u00a0have a couple $1000 balance on each. And then there’s sort of insidious. They just keep creeping upon us. So if he owed that $10,000 that’s about $200 a month in interest. Easily, if not more so that $200 now is pushing us back. So we gotta make our payments on it, and they got this\u00a0headwind of another $200 a month. It’s no value to you. In fact, it’s\u00a0pulling you\u00a0backwards, and so what happens that\u00a0debt starts to grow? There’s something that you want\u00a0and your adding more credit cards. So paying it down is the first step to really starting to get the money working for you. So instead of working for the money and you know, I always feel like you’re like this and\u00a0which bills to pay,\u00a0if you\u00a0can just start by getting a little bit smarter? Get that debt paid down. Now, you don’t have this headwind hitting you. You get to a zero point and then you can actually start to build some wealth by building some of these great habits. Minimal effort, minimal sacrifice. But now, once you’ve got some money, that money can start growing for you and you start to get a nice portfolio built.RichardAnd you’ve described something that I certainly wouldn’t call it a sacrifice. Paying down debt is not\u00a0a sacrifice.GordonNot at all.RichardNot in itself yet. Now you may have to forego something else in order to do it this month. But then I suspect that for most people, but they would have to forego would be very, very low on the sacrifice totem pole.GordonI think.RichardYou’re\u00a0not going to\u00a0sacrifice important stuff,GordonRight? I think initially when writing\u00a0Cash\u00a0Flow\u00a0Cookbook,\u00a0it was really focused on Hey, what’s the minimal effort? Minimal sacrifice, things that people can do. And if you think about that and there is, you know, $13,000 of ideas that I’ve built into the book. People can use some or maybe even all those. But all of the book and cash flow\u00a0cookbook was written without actually giving up anything. But there’s this whole movement now about frugality and, you know, living with less. And I think what happens is that actually leads to more happiness. So if you saw the movie the Fight Club, they have a great quote in there and they say\u00a0“the things you own end up owning you”. Which is very true because they think about a car, it needs maintenance and car washes. And you need new mats\u00a0for it\u00a0and so on. And you want to get a motorcycle as well. But it has the whole service schedule that goes along with it\u00a0and a cottage. It needs work.RichardOr you could just start your own business.\u00a0It ends up\u00a0owning\u00a0you. One example of that we’ve mentioned before off the\u00a0air\u00a0about an American fellow that\u00a0I guess was\u00a0responding to your blog\u00a0or something like this, and you showed him how he could save something like $10,000.GordonWell,\u00a0it actually ended up to be a lot more than that. What happened was this gentleman from Kansas. He had sent me\u00a0an\u00a0email and it was one of my favourite ones. And he said, you know, I’ve read the book and he says, I’m really excited about all this and, you know, here’s my situation. He is\u00a046 years old and he had zero wealth, was\u00a0earning six figures a year.\u00a0All of\u00a0this hard work, gets to 46 years old, he actually has no wealth\u00a0because he read about the concept of what your net wealth. And so he sent me a note and that led to a phone call, had a great chat, and so his situation was you know, what he owned, which was pretty modest, was effectively cancelled out, by\u00a0what he owed\u00a0on it and he hadn’t put much thought into\u00a0money. This is not at all unusual with people. And so I said,\u00a0well,\u00a0what about your (he\u00a0in the U. S.)\u00a0401k from your company? Which is like a company\u00a0RRSP\u00a0in Canada And I said,\u00a0do you have one of those?\u00a0He said,\u00a0well, the company offers\u00a0one. I said oh, great. What’s the balance? How much do you have in?\u00a0And he says none.\u00a0\u00a0Well,\u00a0what do you mean none? He says\u00a0I don’t have any cash. It’s the usual problem he has no cash to invest in there. And I said,\u00a0well, is the company contribute?\u00a0He said they will contribute up to $5000, a $5000 a year matching plan. $5000 of free money, no strings attached. And I said, Well, why wouldn’t you put in\u00a0it?\u00a0He said because\u00a0I don’t have the cash. So we did the\u00a0math\u00a0it was\u00a0about $400 a month, which would give him $5000 a year. So if he could free up $400 a month, his company matches that with another roughly $400 a month, so they’d be $10,000 year contribution. And of course, that can grow over time. So we use some of the concepts in\u00a0Cash Flow Cookbook somewhere in the book, and there’s others available at CashFlowCookbook\u00a0.com. And we applied that to free up the $400 from simple changes to his lifestyle.\u00a0He made those changes signed up for the full amount of the 401K,\u00a0$400 a month. And then we did the math on it. Um, that retirement, I think you would have an incremental of about 350,000 or\u00a0$400,000 of incremental wealth of retirement. It was things that he didn’t miss any way. So. That, I think, is the beauty of this cash flow cookbook approach. One of these simple things that you can free up.\u00a0And then get that working for you. In particular, if you have something like a company matching deal, that’s way too good to give up, that’s free money.RichardAnd he was satisfied that he wasn’t making any serious sacrifices?GordonNo, they were simple things. We looked at things like his clothing. There were some things around storage lockers. We had a couple of changes in his transportation. Just generally getting smarter, more mindful about his money. He had the identical lifestyle he had before. But\u00a0now he was going to retire and take that financial pressure off and stop worrying about living paycheck to paycheck.RichardGordon, The question may be, and perhaps I assume it would be on the tip of most people’s tongues\u00a0after watching this. I hope there’s somebody watching us. Would be, especially the ones who are living paycheck to paycheck and you know, are like you say, just barely\u00a0nose out of the water. Any little wave that comes along\u00a0and all of a sudden they have trouble breathing and things like that. But they’re gonna\u00a0perhaps be skeptical about the whole idea of building wealth for themselves and wealth, whats that. We’re actually looking at from the other end of the telescope? But you disagree with that, and it’s quite obvious to disagree with that. That’s what your book is about. But just to be practical for these people, what would be the first step in changing direction moving that way?GordonYeah, I think it’s a great question. I really think it sounds a bit unusual. I think the first step is to calculate your current wealth, which\u00a0I mentioned before could be negative. So you know, what do you own? And maybe all you own is\u00a0a couch in your rented living area. That’s the only asset that you have. You’ve got student debts and credit card and everything else.\u00a0\u00a0But there’s still a number there. So what is that number right now and set up, you could do it on a cocktail napkin or a spreadsheet. What’s your net worth? You know, we sit here in September. What’s your net worth in September? You’ve got a couch\u00a0and you’ve got all these student debts. And then can you free up some cash and start to focus on it? It may be hard to look at that number because it might be negative.\u00a0And you can say we’ll\u00a0I’ll never have any wealth because I’m strung into this debt. Well, I’ll disagree. I think there’s an opportunity here. So what can you free\u00a0up\u00a0using the ideas in\u00a0Cash Flow Cookbook or other ideas?\u00a0So you’re sitting there in this negative number, and then, you know, in October can you just increase that wealth from zero? Moving it up, here is the zero line. Just keep doing that, and I think you’d be surprised how quickly it goes.\u00a0 Because it tends to accelerate. As you get out of that, you don’t have those interests slowing you down. Now it can start to get more rapidly up to zero. Once you get to zero. Now you’ve got some things working\u00a0for you. Maybe\u00a0you have\u00a0investments, paying out dividends, and then it also tends to accelerate. So there was a great piece that I’d read about a janitor,\u00a0in the Eastern coast of the U. S. And he retired with it was about $5-6 million\u00a0dollars. He was\u00a0a janitor,\u00a0a career janitor.\u00a0He was just smart about his money. He didn’t even have to live that frugally. But he actually saved something, and then it just kept building and building. He donated the money in his retirement, right, So fabulous story. I think it really proves the point that anyone can get out of these financial handcuffs\u00a0and enjoy\u00a0a happier, more comfortable life. Go on the website as well, there are\u00a0some other goodies. They’re all free, and you can\u00a0subscribe, blog\u00a0posts. There’s things called utensils, which are tools to help with your planning. There’s ingredients so ideas, little things that you could buy that actually save you money. And then the blog posts\u00a0will give you some incremental ideas. The book itself, $25, I think is the\u00a0first great investment you could make. Because it’s going to show you some ways to really start freeing up the money and its the\u00a0sort of\u00a0thing that you can actually start today."},{"@context":"https:\/\/schema.org\/","@type":"BreadcrumbList","itemListElement":[{"@type":"ListItem","position":1,"name":"How To Save Money On Recurring Expenses With The Cash Flow Cookbook","item":"https:\/\/rkillen.ca\/how-to-save-money-on-recurring-expenses-with-the-cash-flow-cookbook\/#breadcrumbitem"}]}]