How to Save Money: The Definitive Guide

16 Ways to Save You Can Apply Today
Ramit Sethi

People often confuse my dislike of ultra-frugal advice and penny pinching lifestyles with a dislike of saving money — this couldn’t be further from the truth.

Saving is an essential cornerstone of living a Rich Life. It allows us to invest and help our money grow, as well as do the things we want in the future (e.g. college tuition for your kids, going into space with Jeff Bezos, a down payment on a home, wedding expenses, etc).

What I ACTUALLY dislike (read: hate with the white hot passion of a thousand suns) is the masochistic “advice” people often find when searching for money saving tactics in some listicle.

A few examples:

Yes. These are ACTUAL money saving tips that people have apparently implemented.

Aside from the fact that spending two hours a week separating toilet paper by hand might get you committed to a mental institution, there’s another inherent problem with advice like this — and it can be found in our psychology.

If you want more saving advice like this, I’ve put together a Saving Idea Vault with my top 16 biggest wins at the bottom of this guide.

The psychology of saving money

It’s easy to get bogged down by all of the noise from friends, family, blog posts, and pundits screaming at you to “keep a budget!” or “cut back on spending!”

Like this weirdo:

As much as they mean well, a lot of the advice is just downright awful. The way to recognize the scams like these is to remember one thing:

Bad money-saving advice relies purely on willpower.

What do I mean? Take for example, buying lattes; sweet, delicious $4 lattes crafted by the loving hands of a liberal arts major/actor.

Many frugality “experts” will tell you to stop buying lattes/espressos/coffee/whatever in the morning so you can save $3 or $4 a day — amounting to about $700 a year.

While this advice might seem like a good way to save money, it’s actually unmitigated bullshit.

For two reasons:

  1. We have to make this choice EVERY DAY. Consciously denying ourselves the delicious caramel latte we crave makes us feel stressed. Especially if we drive by the coffee shop on the way to work every day, we have to use our limited willpower first thing in the morning and on the way home, every day, forever. The result of which looks something like this:

  2. Even if we’re “successful,” we don’t invest the money we've saved. Congrats! You’ve skipped morning coffee every day for 365 days. You have 700 more dollars, right!? Probably not. $3/day is not significant enough that you’ll “see” the savings at the end of the month. Unless you consciously put aside the $3 every single day - adding more work and stress to your life.

Which brings us back to point #1. And even if you do save $3 a day, how do you invest it? What account do you put it in? It’s easy to see how this becomes much more complicated than putting grounds in your coffee maker.

The good news is, you can save money — much more than $700/year — without the guilt and daily frustration. And you can do this TODAY with Your Surrogate Asian Father’s complicated money saving system. Ready?

Step 1: Focus on the 2 big, easy wins.

Step 2: Focus on the 16 small, easy wins.

That’s it. Let’s start from the top, the 2 big, easy wins to help you save more money. They are:

  1. Creating a Conscious Spending Plan. Be able to spend your hard earned money GUILT-FREE each month.
  2. Automating your finances. Eliminate the stress of figuring out what to do with your savings so you can focus on other stuff.

Without a doubt, those are the two biggest game changers when it comes to saving money — not clipping coupons or driving across town to find a cheaper gas station or whatever.

When you create a spending plan and automate your finances you’ll see explosive growth in your savings and earnings almost instantly. And the best part: You can do all these things in a few hours and then you never have to think about them again.

Then, after we cover those, I’ll open up my Idea Vault so you can tackle all of the small, easy wins that fit into your life.

My promise: I will not ask you to sell your hair or whatever other awful tip those other sites give you. Ready? Let’s go.

Key Takeaway

Bad money-saving advice relies purely on willpower.

Big, Easy Win #1: Create a Conscious Spending Plan

After you’ve automated your finances, you’re now prepared to create something I like to call a Conscious Spending Plan.

The way it works is simple. You’ll be spending and saving your money into 4 major buckets:

  • Fixed costs
  • Savings
  • Guilt-free spending money
  • Investments (more on that later)

When you know how much you’re putting in each bucket, you’ll be able to get an exact idea of how much you can spend freely each month without worrying about inane tactics like daily budgeting or skipping lattes.

Step 1: Fixed Costs

Grab a piece of paper or download this ready-made spreadsheet and write down all of your fixed expenses. (Don’t worry we’re only doing this once to see where we stand. We’ll make this automatic in big, easy win #2)

In the spreadsheet I’ve pre-filled some common basic expenses:

  • Rent/mortgage
  • Utilities
  • Cell phone, landline
  • Medical insurance, bills
  • Car payment
  • Public transportation
  • Loans
  • Groceries
  • Clothes
  • Internet/cable

Notice I’ve left out “eating out” or “entertainment,” we’ll handle those later

Add or remove anything that’s relevant to you and fill in the actual dollar amount you spend on each category every month. (You might have to drag out a bank statement or credit card bill).

You should now have a list of all your fixed expenses and might already have an idea of a few targeted expense areas that you can cut down on to give yourself more money to save or spend. We’ll get to that.

The point isn’t to have a super-accurate number, because now that you have all your expenses you’re going to add 15% for expenditures you haven’t counted yet. Yes, really.

For example, you probably didn’t capture “car repair,” which can cost $400 each time (that’s $33/month). Or medical care or charitable donations. A flat 15% will cover you for things you haven’t figured in, and you can get more accurate as time goes on.

Take all the expenses, plus 15% added on top, and subtract it from your take-home pay (in the sample spreadsheet this will happen automatically).

Now you know how much you have left for saving and your guilt-free spending money.

Step 2: Savings

Your second bucket is Saving. We’ll split this bucket into sub-buckets: short term (like Christmas gifts and vacation), midterm (a wedding in few years) and larger, long-term goals (like down payment on a house).

  1. Write down what you need to be saving for
  2. Fill in how many months you’ll need to save for each thing on you list
  3. Divide those to get the monthly amount you’ll need to save in order to reach that saving goal
  4. Once you have each monthly amount, add them all together to get your monthly savings total

You’ll notice two thing while doing this:

  1. The earlier you start saving for an item, the more money is at your disposal every month
  2. You want to make sure you are setting realistic goals so all your extra money isn’t going to savings

Regardless of exactly what you’re saving for, a good rule of thumb is to save 5 to 10% of your take-home pay to meet your goals.

If you’re having problems jolting your imagination, here is some inspiration for you:

Gifts for family and friends

In 2016 Americans spent around $930 on Christmas gifts, according to the American Research Group. That’s a little over $75/month.

Your wedding (whether you’re engaged or not)

The average wedding costs about $28,000. Because we know the average wedding age is 27 for men and 26 for women, you can figure out exactly how much you need to be saving, assuming you want to pay for it without help or debt: If you’re 25 years old, you need to be saving more than $1,000/month for your wedding. If you’re 26, you should be saving more than $2,300/month.

Step 3: Guilt-free Spending Money

If you used my handy spreadsheet template you should see an amount under the bucket “Guilt-free spending money” by now. This is your fun money – the stuff you can use for anything you want, guilt-free. This covers restaurants, bars, taxis, movies, and vacations.

(If you’re not using the spreadsheet, just subtract fixed expenses and monthly savings from your take-home pay and the money left should be your Guilt-free Spending Money.)

Step 4: Optimize your spending

How does that feel? Relieved? Disappointed?

It’s pretty simple when you set it up like this. No need for fancy budgets.

Later I’ll teach you how to automate these buckets in your bank account so that the money gets sent to the correct accounts “automagically” without any work.

That way the only thing you need to worry about is spending the money in you Guilt-free Spending bucket.

If you followed all the steps you should have a pretty good picture of your financial situation, and you might not like what you’re seeing.

Maybe you want more money to spend on fun stuff, or maybe you don’t even have enough to meet your saving goals. Whatever your situation, relax, now you have an idea where you should focus your efforts — which is more that 90% of your friend can say.

How to optimize your spending

Optimizing your spending can seem overwhelming, but it doesn’t have to be. You can do an 80/20 analysis, which often reveals that 80% of what you overspend is used toward only 20% of your expenditures.

That’s why I prefer to focus on one or two big problem areas and solve those instead of trying to cut 5% out of a bunch of smaller areas. Let’s take an example: Brian takes home $48,000 per year after taxes, or $4,000/month. According to his Conscious Spending Plan, here’s how his spending looks:

  • Fixed costs (60 percent): $2,400/month
  • Long-term investments (10 percent): $400/month
  • Savings goals (10 percent): $400/month
  • Guilt-free spending money (20 percent): $800/month

Brian’s problem is that $800 isn’t enough for his spending money. What should he do?

Bad answer: Brian can decrease his contributions to his long-term investments and savings goals. Sure, he could do that, but it will cost him down the line.

Good answer: Brian decides to pick his three biggest expenses and optimize them. As an example, he checks his subscriptions and realizes he’s been paying for a Netflix account and a Star Wars membership site, both of which he rarely uses.

He cancels them, saving $60/month and increasing his chances of getting a girlfriend. Next, he logs in to his money-management account at and realizes that he’s spending $350 eating out each month, plus $250 at bars, or $600 in total. (You can also do this by eyeballing a few of your credit card statements).

He decides that over the next three months, he’ll slowly ratchet that amount down to $400/month, saving him $200/month. Total amount saved: $266/month. By adjusting his spending, Brian is able to create a Conscious Spending Plan that works for him. Instead of promising that he’d stop spending money on Cokes every time he ate out, he picked the big wins that would really make an impact on his total dollar amount.

For most of my friends, these Big Wins are eating out and drinking.

Here are a few big ones to get you started:

To get more ideas, head on over to the next chapter to get my Saving Idea Vault. In it I’ve created a list of my 16 best Big Wins and detailed step-by-step explanations on how you can implement them, too.

Step 5: Automate it!

One reason we don't save money is the pain of putting money into our savings accounts each month.

Just like cutting back on lattes we may do it once or twice but if we have to make the decision EVERY paycheck, we're setting ourselves up to fail.

That's why automated finances work so well.

This can be done by setting up a simple system with your bank account. Which brings us to…

Big, Easy Win #2: Automate your finances

One reason we don’t regularly save money is due to the pain of putting our hard earned cash into our savings accounts each month. And that’s why I turn to my absolute favorite thing in the world (sorry mom and dad): automation.

Automation is the set-it-and-forget-it approach to your finances. It allows you to send all of your money exactly where you need it to go as soon as you receive your paycheck.

After all, if you had to track your spending and move money into savings every month it would be eventually be one of those “I’ll get to that later…” things and you’d NEVER get to it.

And so, just like cutting out luscious, perfectly foamed 12 Corners lattes, we might put away money for savings once or twice — but if we have to make the decision EVERY paycheck, we’re setting ourselves up to fail.

That’s why automated finances work so well. You can start to dominate your finances by having your system passively do the right thing for you. Instead of thinking about saving every day - set it and forget it.

To do this, you need just one hour today to follow these steps:

Step 1: Set up your bills so they’re sent to you on the 1st of the month

This is assuming you’re being paid on the 1st of the month. If not, just adjust the day accordingly.

Call your credit card, electric company, internet service provider, Netflix, whatever, and have them bill you on that date. This streamlines the process and allows you to know when exactly your bills need to be paid. There may be a couple of months of odd billing as your accounts adjust, but it will smooth itself out after that.

Step 2: Set up your 401k with employer match

Before your paycheck even arrives into your checking account, make sure that you have your 401k plan set up with your employer and that you’re at least putting in enough money to collect the employer match. It basically means that for every (pre-tax!) dollar you contribute your company will also throw in five cents, ten cents, etc.).

Step 3: Automate your checking account

Once your paycheck actually arrives into your checking account, the money will now go into the four major buckets:

  • Investments: I highly suggest you put your money into a Roth IRA. Like your 401k, you’re going to want to max it out as much as possible. The amount you are allowed to contribute goes up occasionally. Currently you can contribute up to $5,500 each year.
  • Savings: Here, you should use “sub-saving accounts” that you’ve created for your Conscious Spending Plan for long-term goals like your wedding, vacation, or down payment on your house. Many banks provide the option to create smaller sub-accounts in your normal savings account — perfect for goal setting.
  • Guilt-free spending: Make automatic payments for recurring services like Netflix, Birchbox, and gym memberships using your credit card. You’re going to have plenty of guilt-free spending money in here for things like the occasional night out or fun purchases you want to make.

    Be sure to log into your credit card’s website and set up automatic payments with your checking account so your credit card bill is paid off each month. You can rest assured that you will have enough money in your checking because you’ve already set up automatic payments with everything else.
  • Fixed costs: These are for bills that can’t be paid off with a credit card such as rent, electric, water, and gas.

Set it up so that your checking account automatically sends funds to these four areas on your bank’s website — or you can just call your bank and have them do it for you. Or you could go to the bank in person, sort out your accounts, and make a new friend.

For a more detailed explanation, you can check out my 12-minute video on how to automate your finances here.

Now that you know how to accomplish two of the biggest money saving wins, you can now implement savings tips from my Idea Vault that’ll help you save even MORE money each year. I’m not talking a few bucks each month. These tactics — if implemented correctly — can easily amount to THOUSANDS in savings each year.

Here’s how you can get started.

The 16 Best Ways to Save Money


Implement the A La Carte Method

Chances are, you’re WAY overpaying for subscription-based services like Netflix or even the gym. Instead, cancel those subscriptions and buy what you need a la carte. After a month, take stock to see what’s worth subscribing to and what isn’t. You’ll be surprised at what you don’t need.

Learn More
Money Saved
$240 to $1,200 a year
Time Spent
30 to 45 Min

Implement the A La Carte Method

Money Saved
$240 to $1,200 a year
Time Spent
30 to 45 Min

When you were in college, did you ever imagine you’d need $2,000, $3,000, or $6,000 a month just to run your life?

Of course not.

As we started making more and living richer lives, our expenses grew. And a lot of them are necessary, important, or just plain fun.

But other times, we’re paying for things we don’t use or get joy out of — and we don’t even realize it.

“But Ramit, I don’t have any subscriptions like these!”

I thought the same thing — until I went through this quick challenge. Hell, I wrote a New York Times bestseller on personal finance, and I still find stuff like this.

Because whether it’s the Netflix movie that’s been lying by the TV for months or a gym membership that isn’t getting used, we’ve all paid for things we aren’t enjoying.

How to start saving today

1. Cancel all of your subscriptions.

You’re looking for ANY subscriptions such as:

  • Cell phone
  • Land line telephone (yes, some people still have these)
  • Cable and internet
  • Pandora, Spotify, SiriusXM
  • Magazines and newspapers
  • Software subscriptions (apps, antivirus, etc.)
  • Netflix, Amazon Prime, Hulu
  • Game rental and online gaming
  • LinkedIn Premium

2. Purchase these services a la carte.

The basic idea of this system is to cancel all your discretionary subscriptions — magazines, Spotify, Netflix — and buy what you need a la carte.

  • Instead of paying for a ton of movies and shows you’ll never watch on Netflix, but only the shows you want to watch on Amazon or iTunes for $1.99.
  • Buy a day pass for the gym each time you go (around $5 - $10).
  • Buy individual songs from Amazon or iTunes for $0.99 each.

This FORCES you to be conscious with your spending — like my friend who spends $21,000 a year going out.

3. Wait two months and then take stock.

If after about two months, you find yourself spending enough money on these items to justify the subscription — or if you simply just missed having the subscription because it was something you enjoyed — by all means pick it up again. If not, then you’ve saved yourself some major cash.

You can use the chart below to help you out here.

What if I don’t use a subscription — but feel like I should?

I kept a gym membership I didn’t use because I thought paying would force me to take action. Instead, wasting money only made me feel guiltier.

If you aren’t using something, there’s no guilt in canceling and telling yourself, “This doesn’t fit into my life right now. I’ll come back to it later.”

Slash cable and internet costs

If canceling your cable sounds like a sacrifice, don’t worry. There are tons of better, cheaper alternatives. With my quick 4-step system, you can start saving up to $600/year today.

Learn More
Money Saved
$100 to $600 a year
Time Spent
45 to 60 min

Slash cable and internet costs

Money Saved
$100 to $600 a year
Time Spent
45 to 60 min

Here’s how to beat cable companies at their own game:

1. Decide whether you need cable — or if you’d be better off without it

If you love cable and can’t imagine living without it, skip directly to Step 2. This challenge is about saving money, not sacrificing.

But for more and more of us there are better, cheaper alternatives.

Major networks (ABC, CBS, NBC, etc.) broadcast in HD for free with an antenna. You can stream most channels from their websites. And Amazon Prime, HBO Go, Hulu Plus, iTunes, Sling, and Netflix cover pretty much everything else on-demand.

Lifehacker’s comparison chart makes it easy to find out which streaming service is best for you — and you can save $50+ every month.

If you want to learn more, check out the excellent “Ready To Cut the Cable TV Cord?” and “Your Guide to Cable TV Cord-Cutting” for easy-to-use calculators and more info on whether ditching cable is right for you.

2. Do your homework (5 minutes or less)

Back in the day, you’d have to spend a few hours calling to comparison shop. (God, am I that old? I even remember card files at the library.)

But now you can compare plans in minutes using these 2 sites and write down the best rates and plans:

3. Call your cable company to get a better rate (20 minutes)

IMPORTANT: You will NOT lose your cable and internet service just by telling them you want to quit. You will ONLY get disconnected after you tell them, “Yes, I want you to disconnect my service” — so you risk nothing by calling.

YOU: Open by telling them the five magic words: “I can’t afford my cable.” I’ve tried lots of other techniques, but this was the only one that worked almost every time.

THEM: “I’m sorry, I can’t help you.”

Regular reps don’t have as much power to give you a better rate — after all, their job is to tell people, “I’m sorry, but this is the best we can do” and wait for you to say, “Uh, okay, thanks for checking. I guess I’ll just suck it up and pay $1,500 a year.”

YOU: "That's fine. Can you get me someone on the line who can help me?"

THEM: “Okay, please hold."

THEM: “Hi, I’m __NAME__ in the retentions department. How can I help you?”

YOU: Repeat what you said before: “I can’t afford my cable.”

At this point, they’ll start making deals with you. The first deal won’t be their best, but it’s a starting point.

YOU: “If you knew that someone who hasn’t already been a loyal customer paid less than you, would you think that was fair?”

THEM: They’ll “ask their supervisor” — expect to wait on the line for a few minutes.

If you still don’t get what you want, ask to be transferred to the “Cancellations Department.” These people have the most power to get you the deal you want because the cable company knows you’re worth thousands of dollars to them — and it costs hundreds of dollars to acquire a new customer.

As an additional bargaining chip, you can ask for your new rate to include an additional channel — say, HBO, Showtime, or something similar.

Ask them what it’d cost if you didn’t have some of the channels you don’t watch or care about. (For me, this would be any sports channel.)

Have them explain “Limited Basic” — which can be downgraded almost instantly and often contains most of the channels you want ... for a fraction of the price.

Once you’re close to agreeing on an offer, say, “I think we’re close here. What can you do to improve my internet speed? That’d make this a better fit for me.”

They’ll share options, and then this will happen:

THEM: “Because I pulled some strings with my boss, I can give you 6 months at the new rate.”

YOU: “That isn’t quite long enough to make it worthwhile to me. If you can get me 12 months, then we have a deal.”

Remember, if they don't give you what you want, you don't have to cancel. Simply hang up and try again later. You have nothing to lose!

Phone numbers

Comcast: 1-800-934-6489
AT&T: 1-800-331-0500
Time Warner Cable: 1-800-892-4357
CenturyLink: 1-877-837-5738
Verizon: 1-800-837-4966
Suddenlink: 1-877-794-2724

Tips to keep in mind

First, be nice. These people spend 12-hour days dealing with assholes. Treat them well and you’ll be shocked how much nicer they are.

Remain patient. You might feel like you’re getting the runaround during the call. But if you stay focused, you’re chances of success will increase dramatically.

You’re in a much stronger position if you’re willing to walk away and switch to another provider

4. Get your own modem if you’re renting one (20 minutes)

If you have high-speed internet (I’m assuming you do), chances are good you’re being charged a monthly fee for the “privilege” of renting the cable company’s shitty modem.

How do you find out?

Just glance at your cable bill. You’re looking for a line that says something like “Modem rental” or “Cable modem.”

Usually, this is $5-$10 a month — $60-$120 EVERY year. It’s a huge profit center for them, considering the best cable modem (which they probably didn’t give you) can be yours for about 80 bucks.

Don’t know which cable modem to buy? The Wirecutter did a ton of research and testing so you don’t have to.

Once you buy your modem, just plug it in, unscrew the cable wire from your old modem, and screw it into your new one.

Then tell the cable company you installed your own modem. They’ll tell you how to return the old one, and you’ll save at least $60/year.

With just this quick system, you’ll save a combined total of up to $50 a month ($600 a year).

Get your bank fees waived in 15 minutes

Banks love to nickel and dime you for anything they can get away with. But if you’re willing to pick up the phone, a short 15-minute conversation can get your bank fees waived for good, saving you up to $120 every single year.

Learn More
Money Saved
$60 to $120 a year
Time Spent
15 min

Here’s how to get rid of bank fees

Money Saved
$60 to $120 a year
Time Spent
15 min

1. Log into your account to find the exact dates and amounts of your fees.

2. Call your bank.

YOU: “Well, I see the fee here and I’d really like to get it waived. What else can you do to help me?” (Repeat your complaint and ask them how to constructively fix it.)

BANK REP: “Hmm, one second, sir. I see that you’re a really good customer … I’m going to check with my supervisor. Can you hold for a second?”

If they say “no,” that’s the beginning of the conversation. You can ask to talk to their supervisor or tell them, “I appreciate that, but with these fees, I’m better off with another bank. What can you do to help?”

Soon, you’ll get here:

BANK REP: “Sir, I was able to check with my supervisor and waive the fee. Is there anything else I can help you with today?”

YOU: “No. Thanks, you’ve been great!”

Phone numbers

Bank of America: 800-622-8731
Chase: 800-432-3117
Schwab: 800-435-4000
Wells Fargo: 800-869-3557

Bad things to say when negotiating bank fees

“Are you sure?” Don’t make it easy for the rep to say no.

“Is there anything else I can do?” Again, imagine if you were a customer service rep and someone said this. It would make your life easier to just say “no.” Never make it easy for companies to say no.

“OK.” — No. Don’t give up.

REMEMBER: Always, always track your customer service calls (you can use this free spreadsheet).

Beat your cell phone company the fast way

Ready to cut your monthly cell phone bill in half, or more? With a few simple tweaks to your plan, you can save yourself hundreds of dollars per year. (I know one guy who saved himself $720/year … all while getting even MORE benefits from his cell phone company.)

Learn More
Money Saved
$50 to $600 a year
Time Spent
15 minutes to 45 minutes

Beat your cell phone company the fast way

Money Saved
$50 to $600 a year
Time Spent
15 minutes to 45 minutes

The average American spends $1,000 a year on their cell phone bill — and yours may be even higher now.

But there’s good news: you can use these simple steps to cut your monthly bill in half.

Cell phone companies spend a fortune on national advertising to get new customers, then treat them horribly and lose them.

But even they’re smart enough to know it’s cheaper to keep you around than to get a new customer.

1. Use this simple flowchart to boost your savings

The quickest way to save money on your phone bill is choosing the right plan and bundling services (for instance, cell phone and internet). For instance, one of my writers discovered he could get more data and UNLIMITED minutes at a savings of $720 a year — just by checking other plans available on his phone company’s website.

If you don’t need or want the latest technology, you can also save hundreds of dollars by waiting to upgrade your phone until the next big improvement (usually every 2-3 years).

This flowchart breaks down the simple steps to optimize your phone bill and save $50-$300 a year — in just 10-15 minutes.

2. Compare plans from other networks

This used to take an hour or two, but these sites help you do it in just 5 minutes:



Just write down the best prices, plan details, and carriers. That way you’ll have extra bargaining chips when you call your cell phone provider.

If you want to get even better deals with another phone company, check out these comprehensive reviews to find out how to get the best coverage and features:

If you’re thinking about getting out of your contract, don’t miss Lifehacker’s How to Get Out Of Your Cell Phone Contract Without Paying Termination Fees. Lifehacker’s article explains your options, including how to trade your contract, navigate customer service, and hack the system — and avoid the early termination fee.

3. Call your current cell phone company to find cheaper, unlisted plans

First, be nice. These people spend 12-hour days dealing with assholes. Treat them well and you’ll be shocked at how much nicer they are.

Ask what better plans they have to offer you.

YOU: “Hi, I was looking at my plan and it’s getting pretty expensive. Could you tell me what other plans you have that would save me money?”

THEM: Blah blah same plans as on the website blah blah.

YOU: “What about any plans not listed on the website?”

THEM: “No, what we have is listed on the website. Plus, you’re on a contract and have an early cancellation fee of $XXX.”

YOU: “I understand that, but I’d be saving $XXX even with that cancellation fee. We both know times are tough, so I’m thinking of switching to [COMPETITOR COMPANY]. Unless there are any other plans you have … ? No? Ok, can you transfer me to your cancellation department, please?”

NOTE: Your goal here is to be switched to their “customer retention” department, which can give you better deals. Remember, they can ONLY cancel your service with your permission.

When you get to the customer-retention department, ask for the same thing.

Tell them your competitive intel. If Verizon offers something for, say, $15 less, let them know. That’s $180 a year in your pocket already. And you have another trick up your sleeve.

YOU: “I like you guys, but you know times are tough and I need to get a better deal to stick with you. You know and I know that your customer acquisition cost is hundreds of dollars, so it makes sense to keep me as a customer. But at these prices, I just can’t justify staying. What can you do to offer me this plan for less money?”

Notice what you didn’t say — “Can you give me a cheaper plan?”

Yes/no questions always get a “no” answer when speaking to wireless customer-service reps. Instead, ask them leading questions. You’ve invoked the customer-acquisition cost, which is meaningful to retention reps.

THEM: “I just checked, and I’m authorized to give you XYZ … ”

YOU: “It sounds like we’re getting closer. OK, so we have ___ that number.”

“What discounts do you offer for bundling services — say, cell phone and internet?”

“What about discounts for my employer?” (These discounts can often shave 15-25% off your cell phone bill.)

THEM: “OK, this is the best I can do … ”

YOU: “Alright, I authorize that. Would you mind sending me a confirmation email?”

One final thing: You’re in a much stronger position if you’re ready to walk away and switch to another carrier (or if they think you’re ready). They’ll never cancel your account without your approval, and you can always call again if they tell you no.

Phone numbers

AT&T: 1-800-331-0500
Sprint: 1-866-866-7509
TMobile: 1-800-T-MOBILE

Tips when negotiating

First, be nice. These people spend 12-hour days dealing with assholes. Treat them well and you’ll be shocked how much nicer they are.

You’re in a much stronger position if you’re willing to walk away and switch to another provider

Save money on car insurance

Most of us are spending hundreds of dollars on car insurance each year, when we could get the same coverage for much less. Discover the discounts your insurance company keeps secret by calling them up and asking these simple questions.

Learn More
Money Saved
$180 to $1,200 a year
Time Spent
20 to 50 min

Save money on car insurance

Money Saved
$180 to $1,200 a year
Time Spent
20 to 50 min

Most of us pick a rate once, then never go back again. But when we do that, we’re leaving hundreds of dollars on the table because insurance pricing changes, and we’ll never know about discounts and other offers.

So how do you cut your car insurance costs and still stay protected?

1. Ask these money-saving questions about your coverage

The fastest way to do this is usually calling your insurance company. (You can also check your insurance company’s discounts page — for instance, Geico’s discount policies.)

Here are some of their numbers:

AAA: 866-539-8033

Allstate: 866-704-9900

Geico: 1-800-861-8380

Progressive: 1-800-776-4737

State Farm: 1-855-733-7333

Ask them these money-saving questions:

  • “What is my deductible? What would my premium be if I raised my deductible? If I lowered it?” (A deductible is what you pay before your insurance policy kicks in, and higher deductibles can lower your costs dramatically. For example, increasing your deductible from $200 to $500 could reduce your bill 15 to 30 percent. Just be sure you set enough money aside to pay a claim if you raise your deductible.)
  • “Can you explain my options for additional or decreased coverage?”
  • “How much would I save if I insured both my car and house with you?”
  • “What about renewal discounts?”
  • “How long have I been a member with you? What can you offer me as a discount for long-term membership?”
  • If you’ve gone a long time without a moving violation or accident: “What accident-free or safe driver discounts do you offer?”
  • If there are other people in your household on the same insurance, “What sort of household discount to I qualify for?”
  • “How much can I save by pre-paying my entire year up front?”
  • “Let’s look at my car itself. I know other firms offer discounts for features like anti-lock brakes and security systems. What sort of discounts do you give?”
  • “What kind of low-mileage discounts do you offer?”
  • “If I enrolled in a defensive-driving course, what kind of discount would you offer? Which courses qualify?”
  • “What about discounts for my employer?” (Tell them the specific name of your employer.)
  • “Some insurance companies offer discounts for low-risk occupations (engineers, etc.). What kind of competitive rates do you offer?”
  • “Can you walk me through the deductible changes I could make to save money?”
  • (A deductible is what you pay before your insurance policy kicks in, and higher deductibles can lower your costs dramatically. For example, increasing your deductible from $200 to $500 could reduce your bill 15 to 30 percent. Just be sure you set enough money aside to pay a claim if you raise your deductible.)
  • “Am I paying for roadside assistance? What other additional ‘benefits’ am I paying for?”

NOTE: If you already pay for AAA, you don’t need roadside assistance through your car insurance. Also, check your credit card: They may offer roadside assistance, but be sure to call them and ask how much it really costs — AAA’s roadside assistance is included, but some offers mean “we’ll call someone for you and then charge you out the ass.”

2. If you want to save even more, shop around

You always have the most leverage when there are other offers on the table. That’s why I recommend checking with other reputable insurance companies to see what prices they can offer you.

Start by comparing rates at Nerdwallet.

Then, call up big insurers because reps are more likely to tell you about unlisted deals:

AAA: 866-539-8033

Allstate: 866-704-9900

Geico: 1-800-861-8380

Progressive: 1-800-776-4737

State Farm: 1-855-733-7333

They’ll walk you through policy options, and you can ask them the questions from Step 1.

When I compared prices a few years ago, the difference between the lowest quote (Geico) and the highest (Progressive) was $734 per year — a huge savings for a few phone calls.

3. Look for other insurance discounts

I was shocked to find out that AAA, Costco, credit cards, large employers, associations (AARP, teachers’ unions, etc.) often offer car insurance discounts.

Just log onto their websites and browse to “perks.”

REMEMBER: Saving money is great, but if you pick a fly-by-night operation to save a few bucks, don’t be surprised when they don’t fulfill your claim. Check reviews at Consumersearch or Consumer Reports (if you have a subscription).

Since “negotiating” your car insurance is mostly about checking out changing rates and maximizing every benefit of your policy, set a calendar reminder to do this once a year.

Find hidden discounts from your workplace, insurance company, bank and gym

If you know where to look, you can get substantial discounts on airline tickets, cell phone bills, your bank, the gym, and more. Here’s exactly who to call, and what to ask for, to save hundreds of dollars year after year. This is money you deserve to be using how YOU want.

Learn More
Money Saved
$150 to $600 a year
Time Spent
10 to 60 min

Find hidden discounts from your workplace, insurance company, bank and gym

Money Saved
$150 to $600 a year
Time Spent
10 to 60 min

Most of us have thousands of dollars in benefits hiding in our cards — reimbursements, travel discounts, special pricing on everything from laptops to memberships and cars.

Yes, you can get substantial discounts on tickets, cell phone bills, and more ... if you know where to look.

But we don’t always get these lists of discounts. And when we do, they’re usually buried inside 100 pages of introductory paperwork.

It’s time to uncover them — fast.

Which hidden discounts do you want to find?

  • Your employer (discount cell phone plans, cheaper insurance, and more) »
  • Car insurance (discount tickets, free roadside assistance, and more) »
  • Healthcare (free annual checkup, gym discounts, etc.) »
  • Credit cards (extended warranties, rental insurance, trip cancellation, and more) »
  • Banks (fee-free accounts and little-known discounts) »
  • Gym (free personal training sessions, discounted rates) »

Your Employer

Our jobs can be a huge source of discounts, but most of us don’t consider this because it’s been years since we were hired (or nobody ever told us).

Just ask HR, “What sort of benefits or discounts do I get working here? For instance, can I get a discounted rate on cell phone plans?”

Especially if you work for a bigger company, you’ll be shocked by how many discounts you can get. You’re likely to get 15-25% off your entire cell phone bill, plus cheaper insurance and other benefits.

Car Insurance

Because of their size, car insurance companies negotiate deep-discount benefits for their customers. You might get discount tickets, free roadside assistance, even discounts on travel and retail purchases. Ask for a brochure or email with a full list of discounts and benefits.

All you have to do is call them and ask, "What benefits do I get from being a member?"

Here are the big players’ phone numbers to save you time:

AAA: 866-539-8033

Allstate: 866-704-9900

Geico: 800-861-8380

Progressive: 800-776-4737

State Farm: 855-733-7333

Health Insurance

Last time I called my health insurance company, I got a $40 credit toward contact lenses every year, along with a free annual check-up and gym membership discount.

All you have to do is ask, "What benefits do I get as a member? For example, do I get a discount on contacts? Does my membership include one annual checkup?"

They’ll list off benefits you can start taking advantage of right away, and you can get a full list of discounts and benefits you qualify for.

Common phone numbers:

Aetna: 888-250-2309

Blue Cross/Blue Shield: here is a link to find your local BCBS company

Kaiser: here is a link that lists the appropriate number by region

Credit Cards

I’m still amazed by how many benefits good credit cards offer:

  • Automatic extended warranties up to 1 year — for free
  • Instant car rental insurance and collision insurance (you’d normally pay a rental company at least $20 a day)
  • Trip-cancellation insurance if you get sick
  • Dedicated concierge staff
  • Price protection and matching
  • Lost luggage coverage
  • Roadside assistance

Just call up your credit card company and ask for a list of perks you get for being a member.

Common phone numbers:

Bank of America: 800-732-9194

Capital One: 800-955-7070

Citibank: 800-347-4934


Call your bank and ask, "What kind of perks do you offer account holders?"

Don't let them con you into "perks" like "better accounts" (which just mean more fees). You’ll often be able to pay less for accounts, waive fees, get discount tickets, and uncover little-known discounts.

Common phone numbers include:

Bank of America: 800-622-8731

Chase: 800-432-3117


Schwab: 800-435-4000

Wells Fargo: 800-869-3557


Turnover is the fitness industry’s #1 enemy.

So call your gym and say, "You know, times are tough and I want to know what kind of benefits I get as a member. Could I try a personal training session for free?"

You’ll often get benefits like membership discounts, too.

Use a buying checklist to get the best products at 5% to 60% off

With a few minutes extra effort, not only can you get your favorite products for 50% off or more, you can start getting paid cash whenever you spend money online. Just check out these websites before your next purchase.

Learn More
Money Saved
+$400 a year
Time Spent
15 to 60 min

Use a buying checklist to get the best products at 5% to 60% off

Money Saved
+$400 a year
Time Spent
15 to 60 min

Getting a great deal doesn’t have to be difficult. Here’s my favorite way to get great deals while shopping — fast.

1. Find the best product for your needs (1-5 minutes)

Before the internet, we had to trust salespeople and well-meaning friends and family when it came to shopping.

Now, we can instantly access thousands of reviews without doing the hard work ourselves.

For most household goods, everything from TVs and cell phones to bikes, cars, tables, and vacuums, check out The Wirecutter and The Sweet Home. I can’t recommend these sites enough.

2. Check for bargains (5 minutes)

You can save 5% - 50% on every purchase with a minute or two of shopping around — and that’s before cashback discounts in Step 3. Even on a small purchase, that could easily translate into $50-$100 an hour.

Just search these sites for the specific product you picked in Step 1:



Google Shopping

Amazon (be sure to check out their warehouse deals for your product; you can often save 10-30% on a brand-new or factory refurbished model)

eBay is a great source of deeply-discounted items, including electronics

And if you’re willing to make a few phone calls and drive, you can save hundreds or even thousands by buying bigger-ticket items like high-end bikes or furniture on Craigslist.

For prescriptions, visit to instantly find the lowest prescription prices in your area. You’ll save anywhere up to 90% on your prescriptions in under a minute.

3. Get cash back on top of your credit card benefits (30 seconds after it’s set up)

It’s possible to get 3-20% back on almost everything you buy.

Many sites get a commission when you click their link to buy something and this commission doesn’t cost you anything.

And with a few minutes’ work, YOU can get the discount or “commission” on almost everything you buy. You’ll get a check or PayPal deposit with a certain percentage of what you spent.

Once you’ve found where you’re going to buy your product, visit these 2 sites to see where you’ll get the biggest cash back bonuses for the site you’re shopping at:

You’ll have to set up a cashback account (which usually takes 2-5 minutes), and then your savings are almost automatic for years to come.

4. Get coupon codes (20 seconds)

Many online companies constantly offer discounts to their customers. And you can get them — anywhere from 5-40% off — in seconds.

Just visit Retailmenot and type in the company’s name.

If you’re feeling ambitious or can’t find a discount code there, you can google your shopping site’s name + “coupon code.” You’ll save 5 - 60% off most purchases.

Create a “no spending day” once a week

For some of you, this single tip could save you thousands of dollars per year. What do you do? Simple. Pick one day per week when you don’t spend a single dollar. Try it and the results may surprise you.

Learn More
Money Saved
$600 to $2000 a year
Time Spent
1 day a week

Create a “no spending day” once a week

Money Saved
$600 to $2000 a year
Time Spent
1 day a week

This tip is to set at least one day per week on your calendar when you don’t spend one dollar.

Do you think you could do it? Technically, even if you don’t open your wallet, you’re still spending money on things like rent/mortgage, car insurance, subscriptions, and Christmas gifts — you just didn’t count them.

But that’s even more of a reason to create a “No spending day” on the money in your wallet: because you can actively control it.

Today’s tip was submitted by Alexandra, from Wilmington, NC, who writes:

We do a week with NO spending. We fill the car with gas and hit the grocery store on Sunday. Starting Monday, we cannot spend a CENT. Sort of a fun little challenge. And it is only for a week. So, if I see something I need or want, I can get it next week. No cheating. AMAZING results. The first time I did it, I was flabbergasted to have the same $20 bill in my wallet. I got very used to it and so it is a nice little “shot in the arm” technique. Kind of like a fast to begin a diet regime.

Alexandra’s tip is excellent because she uses the idea of time constraints to make the “no spending” idea more palatable. If you force yourself to do this only one day per week, you’ll look back the next week and realize it wasn’t so bad. (Notice she does it for a week, which you can work your way up to.) I remember a friend of mine once decided he wasn’t going to go out all weekend, and he donated the money to charity. You can do the same thing — but the key is adding to your calendar so you make it a consistent system, not an ad hoc whim.

What I love the most about this tip though is the fact that you can easily combine it with the A La Carte Method. In fact, I suggest you use this day to take stock of what exactly you can do without for a day and not even think about it. Was it a breeze to skip buying lunch at that sandwich shop near work? Great!

Only buy new things when replacing something old

This tip is to keep an “Item Budget” in your house. It works like this: Before you buy something new, you must get rid of something old.

Learn More
Money Saved
$10 to God Knows!?
Time Spent

Only buy new things when replacing something old

Money Saved
$10 to God Knows!?
Time Spent

This tip was submitted by Evert from London, UK, who writes:

When buying things like clothes, set a rule for yourself that you can only buy something new, to replace something you already have. For example, from a practical point of view, let’s say you need to have 15 business shirts. Set a ‘budget’ of having 15 shirts, and then when you want to buy one, first throw away (or give to charity) the worst of the other. Can’t make a choice which one to throw out? Guess what: you won’t need a new shirt.

Before buying anything, think ‘how many of those do I need?’ and ‘how many do I already have?’, then think again if you really need a new one. The same applies to electronics and all sorts of other stuff (want a Playstation 3? Sell the Wii / blueray player / old laptop / etc. )

Applying the rule will have two benefits: less drawers and closets of stuff you still want to keep but never use, and spending less money because you’re more conscious about what you already have.

Ok, there are 2 things to note about this tip:

  1. First, this is the kind of tip that’s easy to gloss over (”yeah, yeah”) and not do anything about. But I think about this as an active barrier (learn more about barriers) — something you consciously add as a roadblock before you can buy something new. The psychology of having to open up your closet, decide what to give away, and get it to the nearest charity (or garbage can) is enough to stop many of us from buying something new. Plus, it just keeps things neater around the house.
  2. Second, this tip is starting to focus us more on being goal-driven: If you have a goal (”Save $1,000′′ or “Only have 15 business shirts at any given time”), your decisions become a lot easier. ‘Should I get that shirt? Hmm … let me check my goals. Nope, if I buy that, I can’t save $1,000 this month, so forget about it.’ When you’re not goal oriented, it’s like a neanderthal walking into a crystal shop. Everything is shiny and you’ll buy anything indiscriminately. When you have a simple overarching goal, you have a rubric to measure your decisions against. (You should share this with anyone else in your family so they’re on board, too.)

Personally, I had to buy a new coat last week to go to Chicago. As a result of this tip, I’ve taken out three old shirts from my closet to give away to charity.

Forget going to a bar — ask people over for dinner

What’s the real reason most of us go out to eat? Answer: To hang out with friends. Well, why not save yourself the tips, taxes, cabs, and overpriced drinks … and invite people over to your house instead of meeting at a bar or a restaurant. Your wallet will thank you.

Learn More
Money Saved
$1000 to $1500 per year
Time Spent

Forget going to a bar — ask people over for dinner

Money Saved
$1000 to $1500 per year
Time Spent

When I thought of this tip, the first thing I thought was, “Oh god, my mom is going to lecture me about how she’s been doing this for years.” But most people in their 30s who I know don’t have dinner parties. There’s not enough space, not enough furniture, and not enough dishes — not to mention that I don’t know how to cook worth a damn. But that’s when the haunting echo of my mom came into my mind, as she wordlessly forced me to ask myself one question: WWAID?

What Would An Indian Do?

This is one of the most cost-effective things you can do this month — even if you only do it once or twice. Let’s assume you spent $50 each time you go out, including gas, drinks, food, tips, tax, misc (valet / lending money you’ll forget to get back / buying gum). Changing your spending pattern for just one of those can save you hundreds per year.

When you go out, the point is to hang out with your friends. Think back to just a few years ago, when you would drink out of a decomposing milk bottle and live in a 75-square-foot box with another human being. I’m sure you can suck it up and sit on a folding chair. But we have a bunch of excuses in our head as to why we can’t invite people over, so I thought I’d highlight something I read that opened my eyes.

Here’s an excerpt on hosting people at your house from Never Eat Alone (the best book on building relationships and staying in touch with friends and business contacts):

If you like to eat and you enjoy the company of others, you can pull off your own version of a dinner party that will work beautifully whatever the setting. My friend Jim Brehm is one of the most elegant designers in New York. He had a beautiful studio apartment downtown where he used to host a party every other Thursday. By the way, Thursdays are wonderful days for dinner parties. It doesn’t cut into people’s weekend plans and yet folks are willing to go a little late knowing that they have only one day left in the workweek. I marveled at Jim’s ability to make simplicity so elegant. I found the same quality in Jim’s architecture and designs. His studio had a long bench covered in velvet along one wall and a few black leather cubes to sit on. We’d be served champagne. Light jazz music would play in the background. The dinner guests tended to be a fascinating mix of artists and writers and musicians. To eat, we’d walk five steps to a small simple wooden table with no tablecloth, adorned with two silver candles. The chairs were foldout. Each plate had a big bowl of homemade chili on it and a torn-off piece of fresh bread. For dessert, Jim would serve ice cream and more champagne. It was simply perfect, and perfectly simple. Anyone can throw a dinner party.

Keith Ferrazzi, from his book Never Eat Alone.

The author goes on to offer some great tips for having a few people over (check out the book).

It can be a potluck. It can be a dinner party. It can be ordering pizza. But by staying home, you’ll avoid the ravages of tips, taxes, cabs, and marked-up drinks.

One last thing to make your life easy: If you’re supplying the food, don’t try to be Mario Batali. Just buy some pre-packaged foods and take it one step at a time. On your fourth or fifth event, you can try cooking. Also, if you have a Trader Joe’s near your house and want see what kind of stuff you can make with their ingredients, go here:

Reader tips on saving money on eating out with friends:

Pre-eat. Before going to out to dinner with friends, I eat from what I already have at home. Then, when I go out with friends for dinner, I order soup or an appetizer. This way I’m still being social, and I get my fill, but I’m not blowing my budget. Or, instead of making dinner plans w/friends, make dessert plans. You’re still going out and being social, but again, not spending $14 + on dinner.

–Natalie Bradley, Washington DC

As an office, we decided that we were all spending too much on eating out, so we have been taking turns making things like casseroles and soups, and crock pot dishes to share. We have been doing this one to two times per week, which keeps us from eating out on those days, as well as this being an awesome opportunity to get new recipes and sample all different foods. There are 6 of us in the office, so we rotate, and it works out well. We even have recipes now that people look forward to because they are so delicious.

–Ashley Witmyer, Toledo, OH

Pay for quality where it matters — and buy generic for the rest

For the vast majority of our purchases — like shampoo or prescriptions — generic options are the same quality as “high end” alternatives. You’ll be amazed how much you can save when you stop buying these brand name items.

Learn More
Money Saved
$600 to $6000 a year
Time Spent
30 to 60 min

Pay for quality where it matters — and buy generic for the rest

Money Saved
$600 to $6000 a year
Time Spent
30 to 60 min

I run IWT from my laptop, so I’m happy to invest heavily in a high-end computer.

And if you love something or use it often, I encourage you to spend lavishly on it because high-quality products generally:

  • Last much longer (they’re better-made, so total lifetime cost is lower)
  • Retain their value longer
  • Work better than low-end products
  • Make you feel amazing — the leap from, say, a crappy mattress to comfy one is huge

But when you don’t care or notice the difference, buying generic is a perfect way to save. That’s why I buy $2 shampoo — but gladly pay $15 for a jar of salsa.

You can even save 10-50% more by buying things you use frequently in bulk — meat, cheese or beer, for example.

And generic products are often identical. That’s why pharmaceutical companies spend billions convincing people that drugs like Aspirin are better than their generic equivalents, even though they’re chemically identical.

Nowhere is the price hike for brand-name goods higher than in the prescription drug industry. Here are the cheapest prices for Lipitor brand-name versus generic in NYC:

Prepay your debt to save thousands

By paying just a small amount extra on your loans each month, you will save thousands of dollars in the long run on interest payments.

Learn More
Money Saved
$2000 to $4000
Time Spent

Prepay your debt to save thousands

Money Saved
$2000 to $4000
Time Spent

If you have student loans, you can actually save thousands of dollars each year — by spending more each month.

“Uh, Ramit. How can I possibly save more by spending more?”

Well let’s say you have a $10,000 student loan, at a 6.8% interest rate and a 10-year repayment period.

If you go with the standard monthly payment, you’ll pay around $115/month.

But check out how much you can save per year if you paid just $100 more each month:

Even prepaying $20 more per month can save you HUGE amounts of money.

If you can prepay even a small amount more per month, the benefits can be significant. See for yourself by calculating your savings using this calculator.

Cut your commute expenses by 40%

Cut your commute expenses by 40% using two techniques: Carpooling and working from home.

Learn More
Money Saved
$1200 to $2400 a year
Time Spent
40 to 60 min

Cut your commute expenses by 40%

Money Saved
$1200 to $2400 a year
Time Spent
40 to 60 min

Tip #1: Carpool

Carpooling is a sacred cow for Americans, which is exactly the kind of expense I love to cut. We spend incredible amounts of money and time commuting. As Gallup reports, the average American spends 46 minutes commuting to/from work each day. But any advice that suggests you sell your car and exchange it for a bike is totally irrelevant for the vast majority of people. Instead, I propose something much more modest.

Forget carpooling 5 days per week. Try carpooling 1 day per week. That’s hardly inconvenient, yet you’ll accumulate about 50 days of carpooling per year. At the peak of gas prices, I spent about $65/week on gas. If I carpooled just 1 day per week, that would equal about $465 in savings over 1 year. (Note: Here’s how I save more money on gas.)

The key: Start small. Don’t try to turn into Al Gore on day #1. Set a smaller goal so it’s sustainable: Try 1 day per week. That’s it.

First start, then optimize

Yes, technically you have to factor in the costs of driving your carpool buddies once every few weeks, but for the sake of simplicity, we’ll just exclude that. In fact, forget all barriers. As usual, it’s easier to ramp up once you’ve started:

During this past summer I spent as much as $300 per month on fuel not to mention wear and tear on my vehicle. I am currently paying $45.00 per month to ride the Van Pool. An instant savings of $255.00 per month on fuel. Take that OPEC!

–Marcos Martinez, Katy, TX

Use these sites to start:

(If you don’t live in USA check this list of carpooling sites.)

Tip #2: Work from home

Consider asking your boss to work from home. In The 4 Hour Workweek, Tim Ferriss outlines how to ask your boss to work from home.

Sherwood: Hi, Bill. Do you have a quick second?

Bill: Sure. What’s up?

Sherwood: I just wanted to bounce an idea off of you that’s been on my mind. Two minutes should be plenty.

Bill: OK. Shoot.

Sherwood: Last week, as you know, I was sick. Long story short, I decided to work at home despite feeling terrible. So here’s the funny part. I thought I would get nothing done, but ended up finishing three more designs than usual on both days. Plus, I put in three more billable hours than usual without the commute, office noise, distractions, etc. OK, so here’s where I’m going. Just as a trial, I’d like to propose working from home Mondays and Tuesdays for just two weeks. You can veto it whenever you want, and I’ll come in if we need to do meetings, but I’d like to try it for just two weeks and review the results. I’m 100% confident that I’ll get twice as much done. Does that seem reasonable?

Bill: Hmm … what if we need to share client designs?

Sherwood: There’s a program called GoToMyPC that I used to access the office computer when I was sick. I can view everything remotely, and I’ll have my cell phone on me 24/7. Sooooo … what do you think? Test it out starting next Monday and see how much more I get done?

Bill: Ummm … OK, fine. But it’s just a test. I have a meeting in five and have to run, but let’s talk soon.

Sherwood: Great. Thanks for the time. I’ll keep you posted on it all. I’m sure you’ll be pleasantly surprised.

Read more of Tim’s script in the section called “Disappearing Act: How to Escape the Office” of The 4-Hour Workweek.

The point is, during times when we’re all supposed to be doing more with less, if you can be more productive while working from home, your boss may seriously consider it. Most people never ask, so they never have the chance to trial a work-from-home strategy … even one day per week. (At PBwiki, the company I co-founded, we actively encouraged people to work from home once a week.) What’s the worst he could say — no?

Just remember, your boss doesn’t care about you — he cares about how much you can (1) help the company and (2) make him look good. Frame your request accordingly.

Use barriers to prevent yourself from spending money

If there’s something you want to stop doing, find a way to make it harder to keep up that behavior. You can use this same strategy — active and passive barriers — to save money. Here are three specific ways to save on everything from your cable bill to your grocery bill.

Learn More
Money Saved
$120 to $2400 a year
Time Spent
10 to 15 min

Use barriers to prevent yourself from spending money

Money Saved
$120 to $2400 a year
Time Spent
10 to 15 min

It comes from Liz Steihart of Los Angeles, CA:

With regard to all emails from retailers or etailers: remove yourself from their daily or weekly email lists. I don’t care if you love the emails, or the updates from Old Navy. Remove yourself and you won’t be tempted to internet shop impulsively because there is a new collection out, it is a new season, there is a sale.

Liz’s key insight is to use barriers to prevent yourself from spending money.

In my original article on barriers, I defined them in two ways:

Active barriers, the kind that stop you from doing something, and passive barriers, whose absence actually stops you from getting things done.

  • Active barriers are physical things like the plastic wrap on my food, or someone telling me that it’ll never work, etc. These are hard to identify, but easy to fix. I usually just make them go away.
  • Passive barriers are things that don’t exist, so they make your job harder. A trivial example is not having a stapler at your desk; imagine how many times a day that gets frustrating. For me, these are harder to identify and also harder to fix. I might rearrange my room to be more productive, or get myself a better pen to write with, etc.

Read the entire article and check out some examples of barriers.

How to apply barriers to your personal finances

  • When I wrote about how I track credit card receipts, I mentioned that I keep a folder on my desk that I check once a week. This is incredibly useful when it comes to actually managing my receipts. If I kept the receipts all around my house — or even in a folder in the next room — I wouldn’t bother checking the receipts. The barrier and activation energy to locate, gather, and sort the receipts would be too high.
  • Lots of people talk about freezing their credit card in a block of ice, or hiding it with a friend. If you have a problem with self-control, make something as difficult as possible to reach. Watch too much TV? Smash your remote control with a hammer (send me the video, I’ll post it). Eat out too much? Stock your fridge with perishable goods and force yourself to eat at least 50% of them before they go rotten. Your food goes rotten too fast? As soon as you get home, cut everything up and put it into bags that are ready to consume (more about packing lunches here).
  • Liz’s specific point is great: If you find yourself spending too much on shopping, make it harder for yourself to shop! Unsubscribe from all magazines and email lists you’re on. The simple fact is, if things are automatic, you will do them. And as the excellent book Nudge demonstrates, you can engineer whether these automatic things are good or bad.

Key point: Don’t just look for where you’re spending today. That’s surface-level. Look deeper to see what’s causing you to spend, and if you decide you don’t want to continue, then eliminate those causes.

Negotiate a lower rent

Your rent is NOT fixed and beyond negotiation. Like your bills, rent can be negotiated and lowered too. This is one of the biggest misconceptions there is to renting.

Learn More
Money Saved
$1000 to $2400 a year
Time Spent
2 to 3 hours

Negotiate a lower rent

Money Saved
$1000 to $2400 a year
Time Spent
2 to 3 hours

Are you ready to save hundreds of dollars every month on your biggest expense?

Get started with the proven scripts below.

Email Script #1 - Are you paying above market rates?

If you’ve done your research on rental rates in your area — on, Craigslist, or another rental rates site — and it looks like you’re paying more than you should, you can easily convince your landlord to reduce your rent. And many time, you can do it just by pointing out the data in an email.

The basic structure of your email would follow these four steps:

  1. Start off with praise for where you live. Say you like living in your apartment, and you want to stay there.
  2. Remind your landlord of how good of a tenant you’ve been. You’re going to bring up the fact that you’ve been a great, reliable tenant month after month. You pay your rent on time, no maintenance issues, etc.
  3. Bring up your research. Mention that you’ve been looking at similar apartments in the area. And, while you were looking, you discovered that you’re paying a higher rate than others in the same area.
  4. End with a call to action. Finally, you’re going to ask if she’s open to discussing a rate adjustment.

These 4 steps give you the basic framework for how an email like this works. But I want to show you a real-life example of this 4-step process in action.

Here’s an actual email one of my students, Susan, used on her landlord, Jim:

Hi Jim,

I hope you’re enjoying the start of summer in the Bay. Since our 1 year lease is almost up, I’d like to chat about re-signing.

As you know, I love the apartment. I’ve gotten to know the neighbors and feel truly at home in the neighborhood. I hope to be able to stay here for a while yet.

I’ve been looking at rental prices around the area, and would like to talk with you about adjusting the rent to match what I’m seeing around town.

I’d also be more than happy to help out around the property —taking out the trash and recycling, clearing and cleaning the backyard, or any other duties that might need some attention. I love living here and hope that the relationship with you and the property is just beginning.

I can chat on the phone any time you’re free today or this weekend.

Talk to you soon,


My analysis

What’s especially clever about this email is that Susan used something that I call The Sandwich Technique.

The Sandwich Technique goes like this: Tell him something good, tell him something bad, tell him something good again.

The bad news is “sandwiched” between the two good things. This works because it makes the bad news a little less abrasive to hear.

Another reason Susan’s email is so effective is that she does not ask for the price she wants right away. That’s a classic mistake made by rookie negotiators.

Also notice that when Susan does ask, she doesn’t do it in a confrontational way. She says she “would like to talk with [Jim] about adjusting the rent to match what [she’s] seeing around town.”

With an offer this generous, she gave her landlord, Jim, no reason to argue back.

Finally, she throws in a very clever offer to help out with errands and chores. Now, she is prepared to do this, but Susan knows that in the vast majority of cases, landlords will not take you up on this offer. Instead, this serves as a “buffer” to make the landlord feel good about the question being asked. Remember, when your rent goes down, that means your landlord is making less money — so you don’t want to be unnecessarily aggressive.

Now, let’s look at how Jim responded to Susan’s email.

Jim’s response:


I understand. I hope we can come to some agreement as I too am very pleased with the relationships that have developed. I have not looked at rental prices in the area for a year and I understand that they have changed. What amount of adjustment are you asking for?

I can chat on the phone any time you’re free today or this weekend.



My analysis

Note that he explicitly mentions “the relationships that they’ve developed.” That means Susan has successfully turned this negotiation away from something that’s simply about money and into a discussion. And a discussion is not confrontation at all. This is critical.

Jim clearly wants an amicable solution here. If Susan leaves, that means higher turnover in his property. And it’s much harder for him to get new tenants than it is to simply maintain the ones he already has.

In his email, he admits he that doesn’t have data on comparables at hand, but it does sound like he’s willing to at least see if this is true.

He wants Susan to name a price. Here’s her response.

Susan’s response

Hi Jim,

Thanks for your response, and for putting your energy and attention to this. I’ve saved some listings for 2 bedrooms ranging from $X to $X that I’ve found in the Castro/Dolores Park area over the past month. I don’t think they’re currently live on Craigslist anymore, but I saved them as PDFs.

I’ve seen 1 bedrooms starting from $X, and I would love it if we could meet somewhere in this range.

Talk to you soon!


Key takeaways from Susan’s response:

  • She shows appreciation that Jim is open to further discussion
  • She proves that she’s done her own research and even has the data saved to backup her claims
  • She answers his question by naming a price range, without locking herself into an exact figure

Jim’s response:


OK. After looking around, I think that $1,750 would be fair. Your thoughts?


Boom. She got exactly what she wanted: a lower rent. And that simple interaction directly translated into an extra $2,400 for her over next year.

That’s the power that a simple negotiation can have. But what if you aren’t paying above market rates? Do you still have room to knock down the price?

The answer: yes. And here’s how …

Email Script #2 - Are you paying at or below market rates? You can still save hundreds every month

If you’re paying at or below market price, you’ll probably need to offer a concession to your landlord. Otherwise, what’s going to entice him to reduce your rent.

Here are a few things many landlords will happily lower rents for:

  • Prepay months in advance
  • Sign an extended lease
  • Offer to extend the termination notice from 30 days to 60 or 90 days
  • Offer to give up your parking space if you don’t have a car (The landlord could charge another tenant for an extra space.)
  • Promise not to smoke in the apartment (This will save the landlord money when you move out.)
  • Promise not to keep cats even if they’re allowed (Another cleaning expense for the landlord.)
  • Make a deal for referrals if they have low occupancy

The email you write in this circumstance will be very similar to the 4 steps I outlined above. The only difference comes in step 3, where you’re going to make an offer.

Here’s a quick glimpse of the major parts of your email:

  1. Start off with praise for where you live. Say you like living in your apartment, and you want to stay there.
  2. Remind your landlord of how good of a tenant you’ve been. You’re going to bring up the fact that you’ve been a great, reliable tenant month after month. You pay your rent on time, no maintenance issues, etc.
  3. Make an offer. Mention that you really want to lower your rent. And you’re willing to offer them something valuable in exchange for a deal.
  4. End with a call to action. Finally, you’re going to ask if she’s open to discussing a rate adjustment.

And here’s a sample of an actual email you could send:


Since my lease is almost up, I’d like to chat with you for a bit about re-signing.

I really like living here, and I hope I can continue to do so. I think you’ll agree that I’ve been consistent with paying the rent on time, and that I’m an all around good tenant. So I wanted to propose something:

I’d like to offer to pay you for (X months) of rent up front. This will give you immediate cash flow and the peace of mind that I’ll be here for at least that long. I know how important those can be to any business owner.

In exchange, would you be comfortable talking about a monthly discount?



You’ll have to adapt these scripts to your specific situation, of course, but they should be a good starting point for you 90% of the time. Note that by using phrases like “cash flow” — which are always present in landlord’s mind — you are speaking to them on their terms, not only yours.

Now, email can work, but sometimes picking up the phone is the best way to get fast results.

But don’t worry, with my scripts, you don’t have to worry about any conflict.

The Easy Phone Script To Save Thousands

Sometimes you’ll need to have this discussion over the phone or in-person. Maybe your landlord is old-fashioned or just prefers having this kind of conversation offline.

So here’s a phone script that will make this easy and non-confrontation:

YOU: Hi, how are you? It’s Jeff from apartment #7. I had a couple questions. Do you have a minute?

LANDLORD: Sure, we can talk.

YOU: First thing, I wanted to let you know that I noticed the bathroom sink was leaking, but I was able to fix it last night. I just used my wrench and it took 5 minutes, so things are great now.

LANDLORD: Oh, that’s good to hear. Thanks for letting me know.

YOU: So I was looking at rent prices in the neighborhood and I noticed they’ve dropped. As you know, I really like living here and would love to stick around. But after seeing lower rents for comparable places, I was wondering if we could talk about adjusting my rent to match the rates around town?

LANDLORD: Well, I haven’t seen any major price drops, but what do you have in mind?

YOU: Well, I’ve seen [comparable unit] for [lower price], which I think is reasonable. What do you think would be fair?

The first bit about the sink is just an example, but when you start negotiate, you’ll want to include something similarly positive to get things started. If you didn’t just fix your sink, don’t use that example. Be honest.

But you should have recently done something positive for the property. Maybe it was raking the leaves, or fixing the broken hose, or whatever. This kind of helpfulness goes a long way.

Remember, your landlord is your ally in this. They are not an adversary.

Unlike conversations with customer service reps at your credit card company or bank, your landlord probably won’t be following a standard script, and, in most cases, there’s no set of rules governing the allowances they can or can’t give.

With all this in mind, know that you CAN lead the negotiation call in your favor by remembering 4 key phrases from the script:

  • I really like living here, and I want to stay.
  • I’ve been noticing lower rents in the neighborhood. For example X, Y, and Z.
  • Can WE talk about a possible rent adjustment?
  • What do YOU think that would be fair?

How to prepare for your phone call

Going into negotiation can be tough. That’s why I encourage to spend a few hours practicing these 5 steps before you ever pick up the phone. By front-loading the work, you’ll ensure the conversation goes as smoothly as possible.

  1. Practice speaking your personalized Key Phrases at least 10 times before the call. Get someone to do this with you, or just talk at the wall or mirror. DO NOT SKIP THIS STEP. When you first try this, you will likely sound stilted and insecure. That is natural — but you want to practice first, instead of sounding like that with your landlord.
  2. The delivery you should aim for should be confident and friendly, not nervous and scared.
  3. Observe basic call etiquette: a quiet place, no distractions (or talking to other people), an appropriate time (business hours if yours is a professional property manager, evenings if your landlord is a single proprietor).
  4. If follow-up is needed, get an agreement for a specific day and time now.
  5. Send a follow-up email to confirm and include any data you’ve collected.

This will ensure that you not only get the best rate possible, but it will make things easier on you because you’ll be well-prepared.

Want more money saving tips?

If you’re looking for even MORE proven money saving techniques (let’s face it, you’re already reading this so you do), be sure to check out these ways to save money from IWT that’ll help you earn Big Wins.

  • Pack your own lunches for the rest of the week. No, I’m not saying you should go cold turkey on buying lunch. I’m talking about packing a few lunches this week to see if buying lunch is something you can go without. You’d be surprised at how easy it is.
  • Turn your thermostat down 3 degrees. At the risk of sounding like your cheap dad nagging at you about the heat bill, three degrees is incredibly negligible and can actually save you save cash this month.
  • Go cash only for 15 to 30 days. Though credit cards are the best way to maximize returns on your purchases, paying with cash forces you to be a conscious spender. Rather than blindly paying with your credit card, you’ll know exactly how much you’re spending each day.

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